We are all aware that the entire world is reeling under severe pandemic, COVID 2019 or Corona virus and India too has been badly affected causing social disruption, economic shut down and health concerns. The economy is at a virtual standstill and entire nation is under lockdown since 25th March, 2020 resulting in shutdown of all offices, shops, showrooms, factories and everything. All individuals are confined to their homes. This has resulted in inability to fulfill statutory obligations in relation to payment of taxes and filings, besides other corporate and other responsibilities.
In the given situation, CESTAT, like any other tribunal or court is not functioning since 16 March, 2020, i.e., though the date from which lock down had been notified in India is 25th March, 2020. As of now, lockdown shall be in force till 31st May, 2020 and is likely to be extended, at least in majority of towns where Cestat has benches. Headquartered at New Delhi, Tribunal has its regional benches at Mumbai, Kolkata, Chennai, Bangalore, Ahmedabad, Allahabad, Chandigarh and Hyderabad.
Owing to loss of working days at Tribunal, a substantially large number of appeals could, not be heard causing day in disposal of appeals. With GST in force w.e.f. 1st July, 2017. The Cestat is engaged in disposal of appeals pertaining to old indirect tax regime, mainly covering central excise and service tax matters. Of course, there are other matters too in relation to Customs, Anti-dumping etc.
There has been tremendous loss to all stakeholders during the current lockdown in terms of business in revenue. Cestat has therefore, taken a stand that there will be no summer vacation in 2020 in view of days lost in lockdown.
Cestat functioning is governed by section 129 C of the Customs Act, 1962 read with the Customs, Excise and Service Tax (Appellate Tribunal Procedure) Rules, 1982.
Amendments in Rules
In order to provide for ease in functioning of Tribunal and address Covid 2019 like situations leading to shut down of activities, Cestat has issued Notification No. 1/2020 dated 11.05.2020 providing for certain important amendments in Procedures Rules with immediate effect and allows for –
1) Filing of appeals in soft version (Pen drive)
2) Seeking mobile phone number and email id of appellant and respondent
3) Appeals and cross objections to be filed alongwith soft copy in pen drives
4) Paper book shall also be stored / filed alongwith pen drives
5) Allowing for hearing of appeals through appropriate video conferencing platform
6) Soft copy of stay application and impugned orders shall also be filed ion pen drives alongwith the application.
Vide Notification dated 23.05.2020, changes made in Rule 9, 16 and 28A have been put in abeyance till further orders.
Procedure for Cestat Appeals – Amendments at a Glance
Notification dated 23.05.2020 also clarifies that the submission of pen drives alongwith appeal memorandum or application or the paper book, as the case may be, is optional, and not mandatory.
The various amendments in terms of said Notification (as amended) are discussed hereunder:
Memorandum of appeal [Rule 8]
Rule 8 deals with contents of memorandum of appeal. Accordingly, every Memorandum of Appeal shall set forth concisely and under distinct heads, the grounds of appeals and such grounds shall be numbered consecutively and shall be typed in double space of the paper. Every memorandum of appeal, cross-objections, reference applications, stay applications or any other miscellaneous applications shall also be typed neatly in double spacing on the A4 size paper and the same shall be duly paged, indexed and tagged firmly with each paper book put in a separate folder.
Amended provision of sub rule(1) provides that “every Memorandum of Appeal or Cross Objection shall set forth concisely and under distinct heads, the Statement of Facts and Grounds of Appeal or Grounds of Cross Objection, as the case may be, consecutively numbered and typed in double space of the paper. They shall also contain a valid mobile number and e-mail address of both the Appellant(s) and the Respondent(s).
Thus, appeal and cross objection shall henceforth also contain :
a) Void mobile number of appellant and respondent
b) E-mail address of appellant and respondent
New sub-rule (4) in Rule 8
New Rule 8 (4) now provides that the verification of every Memorandum of Appeal or Cross Objection or Miscellaneous Application filed on or alter the date of publication of this Notification shall stale dial the soil copy of the Appeal Memorandum or the Cross Objection or the Miscellaneous Application and the Documents filed therewith are the true copies of the original.
Thus, verification part of appeal / cross objection / application shall also verify that the soft copies thereof alongwith documents filed are true copies of original documents. It may be noted that physical filing has not been done away with but additionally, two pen drives are also to be submitted with paper filings.
What to a accompany memorandum of appeal [Rule 9]
Rule 9 deals with what all should accompany the memorandum of appeal.
It provides that every Memorandum of appeal required to heard by a two-Member Bench shall be filed in quadruplicate and shall be accompanied by four copies, one of which shall be a certified copy of the order appealed against in the case of an appeal against the original order passed by the additional Commissioner or Commissioner of Excise or Customs and where such an order has been passed it appeal or revision, four copies (one of which shall be a certified copy) of the order passed in appeal or in revision and four copies of the order of the original authority.
In the case of an appeal which can be heard by a single Member, Memorandum of appeal shall be filed in triplicate and number of copies of the order shall be three instead of four.
The amendment in Rule 9 is by way of insertion of new sub rule (5) which provides that every Memorandum of Appeal or Cross Objection and the documents filed along with such Appeal or Cross Objection shall be accompanied by its soft copy stored in two pen drives.
The amendment seeks to provide that henceforth all appeals / cross objections / documents filed shall also be filed in soft copy which is stored in two pen drives. It may be noted that physical filing has not been done away with but additionally, two pen drives are also to be submitted with paper filings.
However, vide Notification dated 23.05.2020, this amendment has been kept in abeyance till further orders.
Preparation of Paper Book [Rule 16]
Rule 16 deals with how to prepare and submit a paper book in relation to an appeal. Accordingly, the appellant shall, along with the appeal or within one month of filing of the appeal, submit in such number of copies as of the memorandum of appeal, as per book containing copies of the documents, statements of witnesses and other papers on the file of, or referred to in the orders of, the departmental authorities, which he proposes to rely upon at the hearing of the appeal. The respondent may also file a paper book containing such documents, which he proposes to rely upon at the time of hearing of the appeal, in such number of copies as of the memorandum of appeal, within one month of the service of the notice of the filing of the appeal on him, or within two weeks of the service of the notice of the filing of the appeal on him, or within two weeks of the service of the paper book, whichever is later. All paper books shall contain clearly legible documents duly paged, indexed and be tagged firmly.
The new amendment is by way of insertion of new sub-rule (8) which provides that the soft copies of the Paper Book shall also be stored in two pen drives and filed along with such Paper Book.
Thus, apart from physical filing of paper book, henceforth paper book being filed shall also be stored in two pen drives and filed along with such paper book. It may be noted that physical filing has not been done away with but additionally, two pen drives are also to be submitted with paper filings.
However, vide Notification dated 23.05.2020, this amendment has been kept in abeyance till further orders.
Hearing of Appeal [Rule 19]
Rule 19 deals with hearing of appeals before Tribunal. Accordingly, on the day fixed, or on any other day to which the hearing may be adjourned, the appellant shall be heard in support of the appeal. The Tribunal shall then, if necessary, hear the respondent against the appeal and in such a case the appellant shall be entitled to reply.
A new sub-rule (3) has been, inserted in Rule 19 to provide that notwithstanding anything contained in Sub Rule (1) of this Rule, the President may, by a separate Notification, allow the hearing of Appeal or Cross Objection through appropriate video conferencing platform in the manner as may be notified.
Thus, it has now been provided that hence forth hearing of appeal /cross objection may be held by way of appropriate video conferencing platform in a prescribed manner.
It may be noted that this rule is a non obstante clause and shall over-ride sub rule (1) which provides for personal hearing on the appointed day. In this regard, two notifications shall have to be issued for:
a) Allowing hearing of appeal or cross objections through video conferencing, and
b) Manner of hearing through appropriate video conferencing platform
Since the notification amending rules comes into effect w.e.f. 11.05.2020 itself, it appears that such provision may apply to existing appeals / cross objections etc pending before the Tribunal.
Procedure for filing and disposal of stay petitions [Rule 28A]
Rule 28A provides for the procedure for filing and disposal of stay petitions. According to existing sub-rule 5, every application for stay shall be accompanied by three copies of the relevant orders of the authorities of the department concerned, including the appellate orders, if any, against which the appeal is filed to the Tribunal by the appellant and other documents, if any. It shall not be necessary for the application to file copies of the documents which have already been filed with the related appeal.
This sub-rule (5) has now been substituted to provide that every application for stay shall be accompanied by three copies of the relevant orders of the authorities of the department concerned, including the appellate orders, if any, against which the appeal is filed to the Tribunal by the Appellant and other documents, if any. The soft copies of the stay application, the relevant orders and the documents, shall also be stored in two pen drives and filed along with such application.
Thus, in addition to what was required till now, the soft copy of stay application, relevant orders and documents shall now also be required to be stored in two pen drives and filed along with stay application. However, vide Notification dated 23.05.2020, this amendment has been kept in abeyance till further orders.
To conclude, it can be said that the above amendments are a welcome move, though belatedly but should now be looked as an opportunity arising out of present Covid 2019 situation where social distancing and other precautions ought to be the need of hour. However, the present amendments do not reduce any burden of the appellant / respondent but casts upon additional responsibility of submitting pen drives (not by email or transfer of data under digital signature). The threat of loss of pen drives and secured platform for video conferencing as well as connectively will always be there.
Meanwhile, Cestat has initiated procurements to facilitate the e-hearings of appeals through appropriate video conference platform in term of infrastructure (desktop, internet connection etc).
It will be now desirable to act upon these amendments and look forward to a scenario where paper filing and physical hearing can be completely dispensed with. It is also needed that some clarifications be issued by way of Frequently Asked Questions (FAQ’s) before implementation.