1. What is meant by adjudication?
1.1 When show cause notices are issued under provisions of the Finance Act, 1994 charging any person for contravention of any provisions of the said Act and rules and/or notifications issued thereunder and penal action is proposed, the competent officers of the Department adjudge the case and issue orders. This process is called adjudication.
1.2 Often notices are issued under section 73 of the Finance Act, 1994 for determination of tax, and the matter is decided by a competent officer. This is also referred to as adjudication in common parlance.
2. Who are competent officers for adjudication?
2.1 The Central Board of Excise and Customs has issued notification No. 48/2010- Service Tax dated 08.09.2010 to amend the Notification No.30/2005-Service Tax dated 10.08.2005, as amended by Not. No. 16/2008-Service Tax dated 11.03.2008 specifying monetary limit of each adjudicating authority, which is as follows,-
Amount of service tax or CENVAT credit specified in a notice for the purpose of adjudication under section 83A
1 Superintendent of Central Excise :- Not exceeding Rs. One lakh (excluding the cases relating to taxability of services or valuation of services and cases involving extended period of limitation.)
2 Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise:- Not exceeding Rs. 5 lakhs (except cases where Superintendents are empowered to adjudicate.)
3 Joint Commissioner of Central Excise:- Above Rs. 5 lakhs but not exceeding Rs. 50 lakhs
4 Additional Commissioner of Central Excise :- Above Rs. 20 lakhs but not exceeding Rs. 50 lakhs
5 Commissioner of Central Excise :- Without limit.
2.2 The monetary limits for the purpose of adjudication [determination of tax] under section 73 are as specified in the Table below (Based on C.B.E.C. Circular No. 97/8/2007-S.T., dated 23.08.2007).
Amount of service tax or CENVAT credit specified in a notice for the purpose of adjudication
1 Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise:- Not exceeding Rs. 5 lakhs
2 Joint Commissioner of Central Excise:- Above Rs.5 lakhs but not exceeding Rs. 20 lakhs
3 Additional Commissioner of Central Excise:- Above Rs. 20 lakhs but not exceeding Rs. 50 lakhs lakhs
4 Commissioner of Central Excise:- Without limit.
3. Is the presence of a Chartered Accountant or lawyer necessary for adjudication?
No. The noticees can defend their case themselves. However, they may also engage any person, duly authorized to defend their case before an adjudicating officer.
Appellate Remedies
4. Who should be approached when an assessee is aggrieved by an order/decision of the Adjudicating authority subordinate to the Commissioner of Central Excise/Service Tax in respect of Service Tax? What is the procedure for filing the Appeal?
i. An assessee aggrieved by such order / decision may file an Appeal to the Commissioner (Appeals), in Form ST-4, in duplicate.
ii. A copy of the order / decision appealed against should be enclosed.
iii. The Appeal should be filed within 3 months from the date of receipt of the order/decision.
iv. There is no fee for filing an Appeal before the Commissioner of Central Excise (Appeals) [Section 85 of the Act and Rule 8 of the STR, 1994].
5. Can the time limit of three months for filing the appeal to the Commissioner (Appeals) be extended? If yes, under what circumstances?
Yes. If the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from presenting the Appeal within the statutory period of three months, he may allow the Appeal to be presented within a further period of three months. The law does not provide for further extension of time. [Proviso to Section 85(3) of the Act].
6. Can an Appeal be filed against the order / decision of the Commissioner of Central Excise or Commissioner (Appeals)? If so, what is the procedure for that?
Yes. The procedure is as follows:-
i. The Appeal against the order of the Commissioner of Central Excise or Commissioner (Appeals) can be filed before the Customs, Excise and Service Tax Appellate Tribunal (in short, CESTAT). The Appeal should be filed within three months of the date of receipt of the order sought to be appealed against.
ii. It should be filed in the prescribed Form (ST-5) in quadruplicate.
iii. It should be accompanied by a certified copy of the order appealed against.
iv. The Appeal should be accompanied by the prescribed fee based on the amount of Service Tax and interest demanded and penalty levied i.e. Rs.1000/- if the amount involved is Rs.5 lakhs or less, Rs.5000/- if the amount involved is more than Rs.5 lakhs but not exceeding Rs.50 lakhs and Rs.10,000/- if the amount involved is more than Rs.50 lakhs. [Section 86 of the Act and Rule 9 of the STR, 1994].
