2. Certificate Course on Indirect Taxes
This Presentation covers
Appellate Procedures
Advance Rulings
Settlement Provisions
2
3. Appeal
What is Appeal
No absolutely fixed and definite meaning
Creature of statute, not a fundamental right
Appeal is-
• Complaint or a petition
• to a superior court or authority
• against an order / judgment / injustice / error
• done by a competent court or authority of a lower authority
• with a request / prayer
• seeking to remove
• grievance / injustice done by such lower authority
• involving reconsideration or review
• of facts or law or both.
Continuation of original proceedings and power of first appellate authority
are co- extensive with those of original authority [Hastmatrai v.
Raghunath Prasad AIR (1981) SC 1711]
3
4. Appeal before Commissioner (Appeals)
Commissioner (Appeals) is a Quasi (as if judicial, analogous
to) Judicial Authority
By Department (Section 84) (w.e.f. 19.8.2009)
By Assessee /Aggrieved person (Section 85)
4
5. Appeal before Commissioner (Appeals)
Appeal u/s 84
Prior to 19.8.2009, Commissioner had power to review orders
Commissioner can satisfy himself about legality/ propriety of any order
passed by subordinate adjudicating authority
Direct such authority to apply to Commissioner (Appeal) by an order.
Order giving such direction to be issued within 3 months of date of
communication of order of adjudicating authority
Adjudicating authority to apply within one month to Commissioner
(Appeal)
Such application to be considered as appeal.
5
6. Appeal before Commissioner (Appeals)
Appeal u/s 85
Who can appeal - Any person aggrieved, other than revenue
(somebody affected)
Against what - Any decision or order passed
Against which order - Orders passed by adjudicating authority subordinate
to Commissioner (Appeals) [ Assistant / Deputy/
Joint/ Additional Commissioner]
Date of filing - Date on which papers are received by the office of
CCE(A). Date of posting or signing is not relevant
Appeal u/s 85 only to Commissioner (Appeal) and not to Tribunal
6
7. Appeal before Commissioner (Appeals)
Decision / order appealed against must relate to following
under Chapter V
Service Tax
Interest
Penalty
Such order could be in relation to
Assessment order u/s 73
Denying of refund
Limitation period
Imposing penalty under various Sections viz, sections 76,77 or 78
Independent conclusion, not bound by CBEC instructions
7
8. Appeal before Commissioner (Appeals)
Form of Appeal
• Appeals to be made as per prescribed rules (Rule 8)
• No fee payable at first appeal stage
• Prescribed form – Form No ST.4
• To be filed in duplicate
• Accompanied by copy of order appealed against
8
9. Appeal before Commissioner (Appeals)
Filling Form Service Tax 4
Mandatory Hints
To be filed in duplicate
Accompanied by order of adjudicating authority being appealed (original
or attested copy)
Form to be verified in prescribed manner
To be accompanied by statement of facts and grounds of appeal
To be signed by appellant or his authorized representative.
To be dated
Other points to be considered
Attach power of attorney
Prepare a index of papers / documents submitted
Number the pages annexed.
List out cases referred to / relied upon
9
10. Appeal before Commissioner (Appeals)
FORM ST-4
Under Section 85 of the Finance Act, 1994 (32 of 1994)
Form of Appeal to the Commissioner of Central Excise (Appeals)
1. No. of 20 ...............
2. Name and address of the appellant.
3. Designation and address of the officer passing the decision or order
appealed against and the date of decision or order.
4. Date of communication of the decision or order appealed against to the appellant.
5. Address to which notice may be sent to appellant.
5(A) (i) Period of dispute
(ii) Amount of service tax, if any. demanded for the period mentioned in Col. (i).
(iii) Amount of refund. if any. claimed for the period mentioned in Col. (i)
(iv) Amount of interest
(v) Amount of penalty
(vi) Value of the taxable service for the period mentioned in Co!. (i).
Cont…..
10
11. Appeal before Commissioner (Appeals)
6. Whether service tax or penalty or interest or all the three have been deposited?
6(A) Whether the appellant wishes to be heard in person?
7. Refund claimed in appeal.
Statements of Facts
Grounds of Appeal
Signature of the authorised Signature of the appellant
representative, if any appellant
Verification
I,------------------------------------------------------------- the appellant, do hereby declare that what is
stated above is true to the best of my information and belief.
verified today, the --------------------day of ---------------------
Place :
Date :
Signature of the authorised Signature of the appellant
Representative, if any or his authorised representative
11
12. Appeal before Commissioner (Appeals)
Steps involved in Appeal
Study order -in -original passed by adjudicating authority
Amount
Issues involved – classification / valuation etc.
Limitation
Penalties
Specific issues – export / import etc.
Examine the background
Revenue intelligence
Investigation / search
Audit paras
Show cause notice (SCN)
Reply to SCN
Cont…….
12
13. Appeal before Commissioner (Appeals)
Prepare a broad sketch / strategy for appeal
Chronology of events / important dates
Legal issues / interpretation involved
Prepare
Statement of facts
Grounds of appeal
Complete Form S T-4 (no fee for first appeal)
File full set of papers / documents
Stay application
Personal hearing
Evidences / written submissions
Order
13
14. Appeal before Commissioner (Appeals)
Statement of Facts
Identify important facts of case assessee
Arrange them in chronological order of happening
Highlight only relevant points
Name, address, type of assessee
Registration details
Taxable services covered
Nature of services / activities undertaken
Background of order in original
o Audit
o Investigation
o Revenue intelligence
o SCN
Reply to SCN – brief points
Order in original - brief points (whether principle of natural justice followed, evidences
considered, speaking order etc)
Reasons for appeal
Annexures / work sheets
14
15. Appeal before Commissioner (Appeals)
Grounds of Appeal
Contains various grounds for appeal filing
Lists issues on which order is being contested
Particulars of order by which person is aggrieved
Issues where relied upon facts are factually incorrect
Issues where wrong classification has been done
Issues where incorrect valuation is determined
Issues involving legal interpretation and appellant / CCE not accepting the same
Areas where adjudicating authority has erred in facts / law
Adjudicating authority has not been just and fair
Reasonable opportunity not given (principles of natural justice not followed)
Speaking order / reasoned order not in place
Judicial discipline not observed
Precedents
15
16. Appeal before Commissioner (Appeals)
Time Period for Appeal
Prior to 28.5.2012 (sub-section 3)
To appeal within there months from date of communication of order
appealed against
Period of 3 months can be extended by further 3 months (total 6
months) by Commissioner (Appeals)
Condonation of delay/ extension beyond 3 months is beyond the power
of Commissioner (Appeal)
to be contd……….
16
17. Appeal before Commissioner (Appeals)
w.e.f. 28.5.2012 (sub-section 3A)
To appeal within two months from date of communication of order
passed after 28.05.2012
Period of 2 months can be extended by further 1 month (total 3
months) by Commissioner (Appeals)
Condonation of delay/ extension beyond 1 month is beyond the power
of Commissioner (Appeal)
17
18. Appeal before Commissioner (Appeals)
Extension up to 3 months (1 month w.e.f. 28.5.2012) will be
allowed only if Commissioner (Appeals) is satisfied about
appellant being prevented by sufficient cause from presenting
the appeal within 3 months (2 months w.e.f. 28.5.2012)
( condonation of delay )
Sufficient cause would depend upon circumstances of each
case / merit.
Sufficient cause :Some thing adequate or enough- can not be a
straight jacket formula for accepting/ rejecting the explanation.
(contd..)
18
19. Appeal before Commissioner (Appeals)
• Condonation of delay has to be sought with clean hands and mentioning
correct facts [Singh Enterprises v CCE (2008) 221 ELT 163 (SC); Bhilwara Zila Ex
Service ……v Dy CCE, Bhilwara (2011) 24 STR 651 (Raj)].
• Service of copy of order to advocate being a mandatory requirement of natural
justice, its non compliance resulted on 260 days condonation of delay. Quality
Constructions v CST, Bangalore (2011) 201 STR 713 (Cestat, Bangalore )].
• No power to condone delay beyond 3 months [Sr. Suptd. of Post Office v. Union of
India (2012) 34 STT 84 (Gujarat); Director of Mines & Geology v. CCE (Appeal)
(2012) 34 STT 203 (Karnataka)]
• Section 85 overrides provisions of Limitation Act 1963 in view of specific
provision of 3 months.
• Section 86 does not contain any express provisions for condoning delay and as
such section 5 of Limitation Act would apply.
19
20. Appeal before Commissioner (Appeals)
Condonation of Delay Allowed
+ Delay (within condonable limit ) not condoned by Commissioner
(Appeals) holding poor health not a sufficient cause. Tribunal held the
reasons of proprietress being pregnant as sufficient cause and delay
condoned.
[Bobby Tours & Travels Pvt Ltd v CCE (Appeals) Jalandhar (2011) 24
STR 371 (Cestat, New Delhi)].
+ Marginal delay of 2-20 days could have been condoned on existence of
sufficient reasons [Hindustan Zinc Ltd v CCE (Appeals), Visakhapatnam
(2006) 199 ELT 360 (Cestat, Bangalore)].
+ Delay of 2 days not to be held against substantive right of appellant to file
appeal [ Birla Corporation Ltd v CCE, Bhopal (2007) 8 STJ 399 (Cestat,
New Delhi]
20
21. Appeal before Commissioner (Appeals)
+ Delay to be condoned only if there is good case for the delay [Hindustan Devdut Tools Ltd. v. Union of
India (1981) ELT 13 (Delhi)]
+ Refusal to admit appeal on the ground that it is barred by limitation is appealable
+ For limitation, time taken for obtaining certified copy to be excluded
+ Time taken by court in winding up process held to be a sufficient cause
+ ‘Sufficient cause’ must receive a liberal construction and justice oriented approach so as to advance
substantial justice. Generally delay to be condoned in interest of justice where no gross negligence or
deliberate inaction is not found – (2007) 11 STJ 186 (Madras)
+ Delay of 30 days condoned on account of appellant’s sickness
+ Delay due to change of standing counsel condonable by tribunal [CCE v. Rajendra Narain (2012) 281 ELT
38 (Delhi)]
+ Failure of consultant should not result in denying to appellant remeady of hearing when delay was of only
30 days and Tribunal had powers to condone – Shaiekh Shahnawaz Ali v. CCE (2012) 26 STR 490
(Bombay)
21
22. Appeal before Commissioner (Appeals)
+ Delay of 26 days condoned when officer left the organization without handing over papers.
+ Delay of 130 days not condoned by CCE (A) in appeal filed by revenue but condoned by Cestat so as to
afford opportunity to petitioner government to pursue appeal.
Condonation Denied
_ Application not disclosing number of days delay; no cogent reason given for delay ; reasons given for
delay flimsy – Delay not condoned by Tribunal [CST, Delhi v. Gautam Auto (2011) 24 STR 314 (Cestat,
Delhi)]
_ Closure of factory, lack of experience, order given to consultant etc not sufficient cause [ Singh Enterprises
Ltd. v. CCE (2008) 121 ELT 163 (SC)]
_ Inefficiency in organization (lower staff not informing) is not a sufficient cause.
_ Delay of 10 months for the reason of incorrect advise by consultant not condoned [Space Exim Pvt. Ltd v
CCE Rajkot (2010) 25 STR 60 (Cestat, A’bad)].
_ Service on daughter in law in same address is a proper service, delay not condoned- [Dhan Lashmi Steels v
Cestat, Chennai (2012) 25 STR 126 (Madras)]
22
23. Appeal before Commissioner (Appeals)
Hearing / Order
Commissioner (Appeal ) to hear the appeals, determine the
appeal and pass orders, as he thinks fit
Hearing is a statutory right – can not be denied
Order includes order enhancing the amount of service tax /
interest / penalty
Service tax/ interest/ penalty to be enhanced only after
provision of reasonable opportunity of showing cause against
proposed enhancement
23
24. Appeal before Commissioner (Appeals)
Remand by Commissioner (Appeal)
Section 35A (3)- Central Excise Act, 1944
CCE (A) has no powers to remand cases for fresh adjudication to
original adjudication authority ( withdrawn in 2010)
CCE (A) to-
- make further enquiry, as may be necessary
- pass such order
- as he thinks just and proper
Confirming
Modifying
Annulling
the original order / decision
Cont……
24
25. Appeal before Commissioner (Appeals)
CCE (A) continues to exercise power of adjudicating authority in assessment
matters- order treated as order of assessment [MIL India Ltd (2007) 210 ELT 188
(SC); Enkay (India) Rubber Co Pvt Ltd; CCE Jallandhar v B.C. Kataria (2008)
221 ELT 508 ( P & H)]
CBEC Circular No 275 /34/2006-CX 8 A dated 25.7.2008 and 21.8.2010
CCE (A) to exercise same proves and follow same procedure as he exercises in
hearing appeals [section 85(5)] Remand Order dismissed [CST Kolkatta v Bahubali
International Ltd (2011) 24 STR 473 (Cestat, Kolkata ); CCE v Automotive
Manufacture Pvt Ltd (2012) 25 STR 70 (Cestat, Mumbai)]
Circular No 275 /34/2006-CX 8A dated 18.2.2010-CCE (A) divested of power to
remand case back to adjudicating authority in terms of section 35A (3) of Central
Excise Act.
Remand by CCE (A) justified when adjudicating authority violated principles of
natural justice and assessee not given opportunity of SCN reply and hearing [CST
Delhi v World Vision (2011) 24 STR 650 (Delhi)].
25
26. Appeal
New Plea in Appeal
New ground / plea at hearing stage generally not allowed.
The High Courts, being the second appellate authority, generally do not allow new
plea to be raised before the High Courts and have rejected the same. In the High
Court, only question of law is decided. As such, new plea is not allowed before the
High Court.
The Tribunals have held that question of law, as a new plea, can be raised at any
stage of appeal and allowed new plea on such ground.
The stand of the Department for raising new plea for changing the category of
service is not allowed by the Tribunal.
New plea cannot be raised in the revisionary proceedings.
If new plea is admitted, the other party should be given a reasonable opportunity of
being heard.
If new plea is admitted, the Tribunal generally remands the matter back to the
lower authority for deciding the case afresh after taking into consideration the new
issues raised before it, if any.
26
27. Appeal
Interpretation Issues
Settled law on interpretation of scope of taxing – constitutional power under article
246.
Tax is on event of taxation or object
Nature of tax levied (subject of tax) is different from measure of tax.
Beneficial provision is to be interpreted and applied liberally but within the scope
of provision
Benefit of doubt must be given to assessee
Dictionary meanings are helpful but not final. Once a phrase / expression is defined
in statute, that definition alone will apply. It may or may not coincide with
ordinary or natural meaning
Cont….
27
28. Appeal
If statutory provision on its plain reading leads to clear meaning, only that should
be inferred out of it without any external aid
Principle of strict interpretation applies to taxing statutes. One has to look merely at
what is clearly said. There is no consideration for equity or presumption
Purpose for which provision was made should also be seen – legislative intention
Primacy to notifications over rules and rules over section need not be given
Charging section can not be brought by notification
Taxing statute can not be interpreted on any presumption or assumption. Purpose of
provision must be kept in mind. It should give effect to legislative purpose
Interpretation must depend on text and context.
28
29. Appeal
Judicial Discipline / Precedent
Order can not be passed which is inconsistent with judgment of apex court
Tribunal’s decision have overriding effect over departmental clarification
Larger bench decisions to be followed by smaller bench.
Stay orders can be varied or vacated and are not precedents
Decision delivered on peculiar set of facts can not be applied to situation in
different set of facts
One can not pick a sentence from here and there in judgment and
characterize it to be ratio of case.
Judicial propriety demands that coordinate bench to follow decision of
another coordinate bench of same Tribunal [Gammon India Ltd v CCE
(2011) 269 ELT 289 (SC)].
29
30. Appeal
Natural Justice Principle
not capable of a definition
root of judicial process
to check arbitrary exercise of power
duty to act fairly
to secure justice or to prevent miscarriage of justice
No person should be condemned or held guilty unheard or an
opportunity should be given for being heard
Orders without giving adjournment sought
Denial of cross examination
Non- return of RUDs
30
31. Appeal
Reasoned / Speaking order
Countering grounds / defense
Order should give reason for arriving at conclusion showing proper
application of mind
Order should be supported by reasons of rationality
Out come of observance of principles of natural justice
Orders without assigning any valid reason and without discussion are not-
speaking orders
Mere reproduction of submissions in the body of order is not enough.
Findings of deciding authority on those submissions is necessary.
Order must give specific findings on submission, judgments relied upon
and distinguishing features pointed out by both parties
Cryptic orders not bringing out reason why assessee faced demand set
aside.
31
32. Appeal
Stay/ Waiver of Pre-deposit
Section 35 F Central Excise Act 1944
Pre-deposit : means deposit of duty (Service tax) and penalty pending the
disposal of appeal.
Any person desirous of appealing against the order shall pending the
appeal, deposit the duty demanded or penalty levied thereon
Right to appeal by itself does not waive requirement of payment of pre-
deposit.
To be paid unless it is waived or stayed.
Duty demanded include –
duty / service tax
erroneous cenvat credit taken
interest payable
32
33. Appeal
Principles of Pre-deposit
• Prima facie case, balance of convenience and irreparable loss has to be
considered
• On merely establishing a prima facie case, interim order of protection
should not be passed.
• When denial of interim relief may lead to public mischief, grave
irreparable private injury or shake citizen’s faith in impartiality of public
administration, pre-deposit could be waived.
• ‘undue’ add some thing more to hardship, excessive hardship
• Pre-deposit can not waived in every case of undue hardship, interest of
revenue have also to be protected.
• Balance of convenience must be clearly in favor of making an interim
order with no indication of likely prejudice to revenue.
• Twin considerations of undue hardship and conditions to safeguards
interest of revenue must be kept in view.
33
34. Appeal
When can pre- deposit be waived / stayed
Opinion of CCE (A) or CESTAT
Duty / penalty would cause undue hardship to appellant
Deposit can be dispensed with / without conditions
Conditions may be imposed as deemed fit to safeguard interest of revenue
Pre deposit application to be considered by CCE (A) within 30 days from date of its
filing (Circular No. 396 dated 2.6.1998); No time limit for tribunal.
Pre deposit neither an absolute right nor ingredient of natural justice
Appeal to be considered only on fulfillment of conditions of pre-deposit.
Statutory right subject to conditions of grant
Mere filing appeal does not amount to grant of stay
Pre deposit of only duty and penalty are required
Where demands are huge, advisable to simultaneously seek grant of stay / waiver
of pre deposit.
Cont…….
34
35. Appeal
When can pre- deposit be waived / stayed
Separate application to be made alongwith appeal (not after filing appeal)
Application to request for stay of recovery of demand till appeal is decided
Fee payable with stay application -
before Commissioner (Appeal) - Nil
before Tribunal - Rs. 500
by Department - Nil
Pre deposit to be waived only if its non – waiver would result in undue
hardship
Undue hardship – depends upon facts and circumstances of each case
Cont…….
35
36. Appeal
When can pre- deposit be waived / stayed
Principles followed –
prima-facie case in favour of assessee
balance of convenience qua deposit
irreparable loss if any to be caused,if stay not granted
discourage frivolous appeals
safeguarding of public interest
No automatic stay / waiver
Order for stay / waiver of recovery to be specifically
passed, not assumed
Sole discretion of appellate authority
36
37. Appeal
Disposal of Pre -deposit
Payment of amount as required for pre-
deposit,
Stay of pre-deposit, or
Waiver of requirement of pre-deposit.
37
38. Appeal
Out come of pre- deposit
If stay granted – interim stay on demand till appeal is decided /
180 days
If stay granted and appeal fails – demand becomes payable
forth with
If stay granted and appeal succeeds - pre deposit becomes
refundable unless stayed by higher court
Pre-deposit to be refunded within 3 months of communication
of order to adjudicating authority
After expiry of 3 months, interest on delayed refund is payable
as per rate in section 11BB . Presently, (@ 6%p.a)
During pendency of stay application, generally coercive steps
are not taken for recovery; no interest can be claimed
38
39. Appeal
Documents required for refund of pre-deposit
Following documents should filed for claiming refund of
pre-
deposits made under section 35 F of the Central Excise Act, 1944
Application in plain form.
Copy of order of Appellate Authority consequent to which the
deposit made becomes returnable.
Copy of Challan evidencing payment of pre-deposit (in
original).
Any other document in support of the refund claim.
39
40. Appeal
Pre deposit – some instances from Judicial pronouncements
Retired appellant- pre deposit of Rs. 6 lakhs ordered in 12 instatements
Partial pre deposit
Pre deposit by way of bank guarantee allowed
Mere financial hardship is not undue hardship- to be substantiate with evidence
BIFR cases
Even prima facie case is not enough but if it appear that demand raised has no leg to stand, it
would be undesirable to require assessee to pay full / substantive part of demand [(2009) 237
ELT 3 (SC)]
Order should be sustained on touch stone of fairness, legality and public interest. Where denial
of interim relief may lead to public mischief, grave irreparable private injury or shake citizen’s
faith in the impartiality of pubic administration, interim relief can be given [(2009) 23 STT
400 (Delhi)]
Order rejecting appeal for want of pre-deposit on one hand and also rejecting the same on
merits not sustainable [( Timeline Ship Management Pvt Ltd v CST, Mumbai (2011) 24 STR
312 (Cestat, Mumbai)]
Discretion vested with appellate authority to dispense with pre-deposit. Enhancement not
sustainable- [Hussnain International (2012) 25 STR 191 (SC)]
40
41. Appeal Before Tribunal
- Section 86 Finance Act, 1994
- Second stage Appellate Platform
- Appeal against order of Commissioner or
Commissioner (Appeal)
- Appealable order passed under section-
- 73 Recovery of Service tax
- 83 A Adjudication
- 85 First stage appeal orders
- Appellate Tribunal is called CESTAT
(Customs, Excise & Service tax Appellate Tribunal )
41
42. Appeal Before Tribunal
• Last court of appeal on facts
• Bound to take note of all possible issues arising out of dispute including
legal issues
• Appeal before Tribunal to be preferred within 3 months from the date of
communication of order by assessee
• 90 days period can be extended on show of sufficient cause (period not
specified ).
• W.e.f. 28.5.2012, Department can file appeal within four months from date
on which order to be appealed is received by Committee of CCCEs / CCEs
• Both parties are entitled to file memorandum of cross objection within 45
days of receipt of notice.
• Tribunal order are binding in nature unless it is set aside by superior
authority
• Procedures at CESTAT as per Cestat (Procedure) Rules, 1982.
42
43. Appeal Before Tribunal
Cestat Benches (6 in all)
Principal bench at New Delhi
Coordinate benches at
Kolkata
Mumbai
Chennai
Bangalore
Ahmedabad
43
44. Appeal Before Tribunal
Limitations of CESTAT
CESTAT functions with the following limitations as it cannot –
grant compensation owing to unlawful action of revenue authorities.
review its own order as any quasi judicial authority cannot review its own
order.
exercise powers beyond statute as it is a creature of statute only. It cannot issue
writs or grant relief which ought to be granted by high court.
comment on legitimacy of statute and has to presume legal validity of the
provisions of Act and Rules.
punish for its own contempt but has to forward it to high court for its
consideration.
act as a court as it is a tribunal and cannot be equated to a court. Members of
tribunal are not judges and their decisions are orders, not judgments.
over rule any high court judgment and are bound by judgments of high courts
and Supreme Court.
44
45. Appeal Before Tribunal
Fee payable to Tribunal (w.e.f. 1.11.2004)
Vide Notification No 31/2004-ST dated 25.10.2004
Amount of Service Tax/Interest/Penalty Involved Prescribed Fee
Rs. five lakh or less Rs 1,000
More than Rs five lakh but not exceeding Rs fifty lakh Rs 5,000
More than Rs fifty lakh Rs 10,000
Fee for Application for Rs 500
Grant of stay
Rectification of mistake
Restoration of appeal or application, or
For any other purpose (clubbing of appeals, early hearing etc)
No fee for
- Filing memorandum of cross objection
- Filing appeal by Department
- Adjournment
45
46. Appeal Before Tribunal
Forms of appeal to Tribunal (Rule 9)
u/s 86 (1) Form ST 5
u/s 86 (2) Form ST 7
u/s 86 (2A) Form ST 7
u/s 86 (4) Form ST 6
(Memorandum of cross objections)
46
47. Appeal Before Tribunal
Form ST-5
- Filed by aggrieved assessee against order of CCE or CCE (A)
- Within 3 months of communication of order
- Filed in quadruplicate
- Accompanied by four copies order appealed against, one of
which shall be certified copy (certified by departmental
officer)
- Statement of facts
- Grounds of appeal
- Verified in prescribed manner
- Dated & signed
- Stay application to be filed simultaneously
47
48. Appeal Before Tribunal
Form ST-6
Filed by assessee/ department
Four copies of memorandum of cross-objections must be filed,
duly signed and verified.
Contain relief claimed in memorandum of cross objection
Ground of cross objection – concise , under distinct heads
without any argument or narrative, numbered consecutively
Form ST-6 should be preferably typed in English or Hindi.
It should be filed within 45 days of the notice.
It has to be submitted to Appellate Tribunal.
To be verified in prescribed manner
Fill number any year of appeal as per notice
48
49. Appeal Before Tribunal
Form ST-7
Used for appeal u/s 86 (2) and 86 (2A)
Form ST-7 should be used for appeal to Appellate Tribunal under Section 86(2) or
86(2A) against orders under Section 85.
Appeal should be filed in four copies.
Four copies of order or decision appealed against should be attached (at least one
such copy should be a certified copy).
The form should be verified in the prescribed manner.
Memorandum of cross objections should be made in Form ST-6 within 45 days of
the receipt of notice.
Appeal should be preferred within 3 months of the date on which the order sought
to be appealed against is received by the Board or Commissioner.
No fee is payable on filing of appeals under Section 86(2) or 86(2A) by the
Department.
Appeal under Section 86(2A) should be accompanied by copy of order of the
Commissioner (Appeals) and copy of the order passed by the Commissioner
directing the Deputy/Assistant Commissioner to apply to the Appellate Tribunal.
49
50. Appeal Before Tribunal
Appeals before CESTAT – Some points
Appeals decided on merit / ex-partie if appellant / respondent fails to
appear on appointed date or fails to seek adjournment
If appellant does not wish to appear in person or through AR, he may
intimate that matter be decided on merit
Clubbing of similar appeals can be sought
Before main appeal is taken up, compliance of stay order to be advised
Main appeal can be dismissed for non-compliance
Certified Copy – Original copy of order received by party or copy duly
authenticated by department
Can be sent by registered post.
Cont…..
50
51. Appeal Before Tribunal
Appeals before CESTAT – Some points
One appeal for each Order-in-Original.
Each aggrieved person to file a separate appeal
Date of presentation
Typed in double space
Tribunal in deciding appeal shall not be confined to grounds in appeal.
Commissioner shall be made respondent. If appeal filed by department,
assessee should be made respondent.
Document authorizing representative to be attached to appeal memo.
Same bench to hear application for rectification of mistake.
51
52. Appeal Before Tribunal
Appellant should prepare the appeal in proper paper book form
To be submitted within one month of appeal
4 copies to be submitted
copies of documents
statements of witness
other papers referred in order
RUD’s etc
Respondent can also file paper book
Duly paged, indexed, taged, foldered
Documents produced with appeal to be attested as true copy .
At least 7 days before hearing, following may be submitted-
List of important events concerning dispute with respective dates
List of decisions of Tribunal, other authorities and judgments of high court/
Supreme court proposed to be relied upon during hearing .
52
53. Appeal Before Tribunal
CESTAT orders
Common order in group of appeals is permissible
Division bench decision precedes the judicial
authority over single bench decision. Law laid by DB
to be followed by SB.
Tribunal empowered to remand matters
Tribunal can refer the matters to larger bench by way
of reasoned orders, not just desire.
Proceedings in open court.
53
54. Appeal Before Tribunal
Monetary limits for filing appeal before Tribunal by
Department
Rs. 5,00,000 (w.e.f. 1.9.2011)
Determinative element – Duty / tax under dispute alone
Interest or penalty not be clubbed
Where penalty is disputed – Further litigation only if amount
exceeds Rs. 5 lakh
No monetary limit for –
Challenge of constitutional validity
Notification / order / circular held illegal or ultra vires
Same limit to apply to refund.
54
55. Appeal Before Tribunal
Representation before CESTAT
- POA/ Vakalatnama to be filed with appeal memo
- A C.A. is allowed to represent his client’s case before
CESTAT
- Others eligible are
• Cost accountant
• Company Secretary
• Advocate
• Commerce graduate (H)/ post graduate
• Post graduate in business administration / MBA
• Retired employee of CBEC with > 10 years experience
55
56. Appeal Before Tribunal
Appeal to Court (High Court, Supreme Court)
Section 35 G of Central Excise Act, 1942
Against Cestat order
Only when substantial question of law arises
Within 180 days of receipt of order sought to be appealed
against
Prescribed fee
Order of high court appealable in Supreme Court if high court
certifies it to be fit for appeal.
56
57. Appeal Before Tribunal
Monetary Limits for appeals by department (CBEC)
(Instruction No 390/ Misc/ 163/2010-JC dated 17.8.2011)
Monetary limit
Before CESTAT > Rs 5 lakh
Before High Courts > Rs 10 lakh
Before Supreme Court > Rs 25 lakh
Determinative element would be duty / tax under dispute
If penalty or interest is under dispute and amount exceeds the limits,
further litigation can follow.
Same limits to apply in refund cases.
Adverse judgments to be contested irrespective of amount if-
- Constitutional validity is under challenge
- Notification / Circular has been held ultra vires / illegal
57
58. Revision Mechanism
Introduced by Finance Act, 2012
Section 35EE of Central Excise Act, 1944 made
applicable to Service Tax w.e.f. 28.05.2012
All appeals against Commissioner (Appeals) orders
lied before Tribunal prior to 28.05.2012.
Like Excise, in Service Tax also, revision authority
shall hear matters relating to –
Cenvat Credit
Rebate of Exports
to be contd……..
58
59. Revision Mechanism
Revision by Central Government (Joint Secretary in MOF)
Revision application to be heard and order passed
Order may be annulled or modified
Minimum amount of dispute Rs. 5000
To be filed within 3 months of communication of order
Revision can be sought by CCE/ assessee
Central Government can also suo moto revise
No provisions for appeal against revisionary order.
Only remeady is writ Jurisdiction
Quasi judicial proceedings
59
60. ADVANCE RULING IN SERVICE
TAX
Statutory provisions in Chapter VA of Finance Act,
1944 (Introduced by Finance Act, 2003)
Section 96A to 96J
Service Tax (Advance Ruling) Rules, 2003
The authority for Advance Ruling (Customs, Central
Excise and Service Tax) Procedure Regulations, 2005
60
61. ADVANCE RULING IN SERVICE
TAX
Pronounced by AAR (CE, C & ST), New Delhi
Quasi judicial body
Chaired by retired judge of Supreme Court
To obtain in advance a ruling from AAR
Rulings are final and binding in nature.
Facilitate determination of a question of law or fact
on liability to pay Service Tax
Taxability of proposed service business activity to be
provided
Saves time consuming and costly litigation.
61
62. Who can seek Advance Ruling
a non-resident setting up a joint venture in India in
collaboration with resident or non-resident, or
a resident setting up a joint venture in India in collaboration
with a non-resident, or
a wholly owned subsidiary Indian company, whose holding
company is a foreign company.
an existing joint venture in India,
a resident under any class of service, as the Central
Government may notify (public sector companies notified vide
Notification No 27/2009-ST dated 20.8.2009)
a resident as an applicant who proposes to import any goods
from the Republic of Singapore under Comprehensive
Economic Co-operation Agreement (CECA).
62
63. Conditions to be satisfied for seeking
Advance Ruling by non-resident
There must be existence of a joint venture or a
proposal to set up a joint venture.
Joint venture must be set up in India.
Joint venture must be in collaboration with a
resident or a non-resident.
Atleast one person to be non resident
Joint venture – participation by both parties
Collaboration – financing / managerial /
technical
63
64. What is Advance Ruling
Advance ruling is -
a process of determination
by the prescribed authority only
of a question of law or fact
relating to liability of service tax
on proposed service
to be provided by an applicant
64
65. Benefits of Advance Ruling
Clarity and certainty of tax liability or activities
proposed to be undertaken
Finality of issue and avoidance of litigation
Speedy decisions (within 90 days)
Inexpensive process
Transparency and simple procedure (natural justice
followed)
Binding on applicant / Department
No appeals against ruling
65
66. Matters on which Advance Ruling
can be sought
Any subject touching upon question of fact or law
relating to proposed service and its taxability
Scope of service regarding taxability
Classification of service into a particular category of service
Valuation of a service for charging service tax including valuation
principles
Availability of exemption or any abatement
Applicability of notifications (not circulars)
Availability of Cenvat credit of duty or tax as per rules
Determination of liability to pay service tax.
Any matter relating to law in respect of above
66
67. Who can be applicant (Section 96A)
(i) (a) a non-resident setting up a joint venture in India in
collaboration with a non-resident or resident; or
(b) a resident setting up a joint venture in India in
collaboration with a non-resident; or
(c) a wholly owned subsidiary Indian company, of which the
holding company is a foreign company,
who or which as the case may be, proposes to undertake
any business activity in India;
(ii) a joint venture in India; or
(iii) a resident falling within any such class or category of
persons, as the Central Government may, by notification in
the Official Gazette, specify in the behalf
(iv) Public sector company can be applicant
67
68. Advance Ruling binding on
the applicant
transaction on which ruling is sought, and
the departmental officers concerned.
writ jurisdiction is invokable against advance
ruling
if there is change in law, AR will not be binding
68
69. Binding nature of Advance Ruling
leads to
Assessing officers (Commissioner or Officers subordinate to
him) shall be bound to follow the advance ruling pronounced.
Commissioner will not be able to exercise his revisionary
powers to deviate from the ruling.
No appeal is permissible against the advance ruling by
anyone; i.e., applicant or the Commissioner.
Once pronounced, advance ruling cannot be revoked, revised
or altered.
Advance ruling is binding on the applicant only and no one
else.
Advance ruling shall be in force so long as there is no change
in law or rules and fact of the question.
69
70. Application for Advance Ruling
(Section 96C)
Prescribed form and manner [Form AAR (ST)]
Fee Rs. 2500 (non-refundable)
Form to be duly singed and verified
Contains Statement of Facts and Applicant’s Interpretation
Can be withdrawn within a period of 30 days from date of application
AR not to be given on pending/already decided questions
To be rejected if matter already pending before assessing officer/ Tribunal/
Court
Opportunity of being heard to be provided if sought in writing
Copy of application also forwarded to Department
Application can be allowed and Ruling pronounced if not rejected
70
71. Conditions for rejection
Opportunity of being heard should be granted to the
applicant.
Reasons for rejection of application shall be recorded
and given in order
Copy of order should be sent to both, Applicant and
Commissioner of Central Excise.
71
72. If allowed, AAR can
Seek and examine further material placed before it by the applicant or
obtained by the authority
Provide an opportunity of being heard to the applicant before pronouncing
the ruling, if, requested by the applicant, either personally or through
authorized representative
Pronounce its advance ruling on the question specified in the application.
Advance ruling is to be pronounced in writing
Advance ruling should be given within ninety days of the receipt of valid
application
Order of advance ruling should be signed by the members of the authority.
Certified copies of the order should be sent to -
(a) Applicant, and
(b) Commissioner of Central Excise
soon after the pronouncement of the advance ruling
72
73. Applicability of Ruling (Section 96E)
on the applicant himself
on the Jurisdictional Commissioner and Assessing
Officers pertaining to the applicant
on the question of law or facts only on which advance
ruling was sought
can not be applied generally to all assessee
73
74. Advance Ruling will be void if
There is change in law
There is change of facts
Ruling was obtained by fraud or mis-
representation of facts
To be declared void by order in writing
Copy of order to be sent to applicant /
department
74
75. Powers of Authority (section 96G)
Discovery and inspection
Enforcing the attendance of any person (applicant,
officers, etc.)
Examination on oath of any persons
Issuing commissions, and
Compelling production of books of account and other
records
Vested with power of civil court
Proceedings to be judicial proceedings
75
76. Procedures of AAR (section 96H)
free to regulate its own procedure and functioning
AAR (C, CE & ST) Procedure Regulations, 2005
Ruling procedures
application filed in form AAR (ST) in four copies
can be submitted in person / by post
all annexures to be numbered and signed
evidence that authorised person has signed
on A-4 size paper
date of filing is the date of receipt in office of AAR
to be contd. ….
76
77. Procedures of AAR (section 96H)
in case of non-residents, postal address and
email of representative in India / abroad
scrutiny of application and intimation of
deficiency
serial number to be allotted
notice for rejection
order to be pronounced in open court
77
78. Settlement Provisions in Service Tax
Introduced by Finance Act, 2012 w.e.f. 28.5.2012
Sections 31, 32 and 32A to 32P of Central Excise
Act, 1944 made applicable to Service Tax (section 83
of Finance Act, 1994)
Service Tax (Settlement of Cases) Rules, 2012
notified (N.No. 16/2012-ST dated 28.05.2012)
Objective to encourage quick settlement of disputes
and save business from prosecution / penalties
Principal bench at Delhi (benches at Mumbai,
Calcutta, Chennai)
78
79. Benefits of Settlement
Quick settlement of disputes to avoid prolonged
litigation
A one time tax evader or an un-intending defaulter
can make clean his affairs through Settlement
Any defaulting person can admit his guilt, pay taxes
with applicable interest and avoid further liabilities
Settlement Commission can grant waiver/ reduction
of penalty, fine or interest
Settlement Commission can grant immunity from
prosecution to assessee, its directors and partners
79
80. Settlement of Cases
Any assessee can approach the Settlement
Commission
The proceedings / cases should be pending with
aggregate amount of more than Rs 3 lakh involved
Application to Settlement Commission should be
made with prescribed fee and in prescribed form
Application once made, can not be withdrawn
Application can be made by any assessee including
directors or partners of firms
Application can also be filed by two or more
assessees and joint / co - noticees
proceedings or case must be pending before the
adjudicating authority on the date of application.
A show cause notice should have been issued
80
81. Settlement of Cases
Application must make full and true disclosures
before the Settlement Commission which is the very
basis of settlement.
Issues relating to recovery of Cenvat credit can also
be taken up before the Settlement Commission
Cases involving only penalty or cases which are
pending before court or Appellate Tribunal shall not
be entertained by the Settlement Commission.
Cases involving interpretation of classification and
valuation can not be taken up by Settlement
Commission .
81
82. Settlement Procedures
Form SC (ST)-1 to be used
Application in four copies
Prescribed fee Rs. 1000
Accompanied by attested copies of all
documents
Duly signed and verified
82
83. Information to be furnished in Form
Details of show cause notice including period of dispute and
service tax demanded in the notice
Dispute in connection with which the application for
settlement is made
Adjudicating Authority before whom the notice is pending
adjudication
Details of service tax returns filed for the period of the dispute
and the invoices of taxable services entered in the books of
accounts
Self attested copies of relevant service tax returns and extracts
from books of accounts/register is to be enclosed along with
the application
to be contd……
83
84. Information to be furnished in Form
Brief facts of the case and particulars of the issues to be settled
and terms of settlement sought by the applicant
Detailed calculations for the accepted service tax as payable
for settlement and interest on the said admitted service tax
Payment of the service tax along with interest arrived at as
above
Details of any application for settlement filed before the
Settlement Commission, if any
Details of the order debarring the applicant from making
further application for settlement by any bench of the
Settlement Commission
Details of order of Settlement Commission making the order
as void by any Benches of the Settlement Commission
84
85. Settlement Procedures
Forwarding application to jurisdictional
Commissioner
Report from jurisdictional Commissioner
Copy of report can be supplied on fee (Rs. 5 per
page)
Attachment of property through jurisdictional
Commissioner
85