Appeals before the Commissioner (Appeals)

Updated as on 14.09.2015

[Training Material for Departmental Use]

E-BOOK
On

Appeals
Before the Commissioner (Appeals)
in
Central Excise /Customs/Service Tax

NACEN, RTI, KANPUR

 Appeals before the Commissioner (Appeals)

Note:

1. In this E-book, attempts have been made to explain about filing of Appeals
before the Commissioner (Appeals) in Central Excise, Customs & Service Tax. It
is expected that it will help departmental officers in their day to day work.
2. Though all efforts have been made to make this document error free, but it is
possible that some errors might have crept into the document. If you notice any errors,
the same may be brought to the notice to the NACEN, RTI, Kanpur on the Email
addresses: [email protected] or [email protected]. This may not be a
perfect E-book. If you have any suggestion to improve this book, you are requested to
forward the same to us.
3. This e-book has been prepared with active assistance and contribution by Shri
Sanjay Kumar Agarwal, Superintendent, Commissionerate of Central Excise,
Lucknow and Shri S.A. Khan, Assistant Director, NACEN, RTI, Kanpur. I
appreciate their participation and willingness to prepare e-books and to help fellow
departmental officers in capacity building and upgrading their knowledge.
4. If any other officer is interested in preparing E-book on any topic relating to
Customs, Central Excise or Service Tax, he may forward the E-book prepared by him to
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(C. P. Goyal)
Additional Director General
NACEN, RTI, Kanpur
Email: [email protected]

NACEN, RTI, KANPUR

 Appeals before the Commissioner (Appeals)

INDEX

1. Introduction ..................................................................................................... 1

2. Statutory Provisions for Appeals before Commissioner (Appeals)..................... 3

3. Other Important points .................................................................................... 5

4. Applications (Appeals) by the Department before Commissioner (Appeals) ..... 6

5. Procedures at the Stage of Commissioner (Appeals) ......................................... 7

6. Other Important Issues ..................................................................................... 8

(A) Service of Copy of Appeal to the Respondent Adjudicating Authority is mandatory. .......... 8
(B) Production of Additional Evidence before Commissioner (Appeals) .................................... 8
(C) Remand of Cases by Commissioner (Appeals)- Not allowed .................................................. 9
(D) Mandatory pre-deposit for filing Appeal by the Appellant before the Commissioner
(Appeals) ............................................................................................................................... 10
(E) Principle of Natural Justice ................................................................................................... 11
7. Text of Relevant Statutory Provisions/Circulars/Instructions .......................... 11

7.1 Text of Relevant Sections/Rules of Customs/Central Excise/Service Tax laws ................... 11

7.2 Text of Relevant Circulars ..................................................................................................... 12
ANNEXURE ..................................................................................................................................... 13
8. Form and Formats .......................................................................................... 14

FORM NO. E.A. 1 ............................................................................................................................ 14

FORM NO. E.A.-2 ............................................................................................................................ 15
FORM NO. C.A.-1 ............................................................................................................................ 16
FORM NO. C.A.-2 ............................................................................................................................ 17
FORM ST-4 ..................................................................................................................................... 18

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 Appeals before the Commissioner (Appeals)

1. Introduction

1.1 Under Central Excise/Customs/Service Tax laws, the officers of Customs &
Central Excise have been empowered to act as a quasi-judicial authority and decide
as to whether an infringement or contravention has taken place and whether penal
action is called for. The adjudication proceedings are quasi-judicial proceedings,
ultimately resulting into issuance of a speaking order, which is appealable to the next
higher forum.
1.2 In the Indirect Taxation, both assessee and department have been conferred with a
right of two or three stage appellate remedies. Against the orders passed by the
officers who are lower than the rank of Principal Commissioner of Central
Excise/Customs/Service Tax or Commissioner of Central Excise/ Customs
/Service Tax, the first appeal lies to the Commissioner (Appeals) and there
from to the Customs, Excise & Service Tax Appellate Tribunal (i.e. CESTAT) and
finally to the High Court/ Supreme Court, as the case may be. But where the order
of the Tribunal does not relate to determination of rate of duty or value of goods,
an appeal to the High Court lies under Sections 35G of Central Excise Act /
Section-130 of Customs Act & reference application under 35H of Central Excise
Act / Section-130 of Customs Act, instead of Appeal to Supreme Court.
1.3 In certain specified categories of cases, the appeal against the order of
Commissioner (appeals) lies before Joint Secretary (Revision Application). To know
about the concept of Revision Application in indirect taxes, refer to e-book
on revision Application at
http://nacenkanpur.gov.in/admin/media_images/Concept%20of%20Revision%20Application.pdf .

1.4 In cases where the Order-in-Original is passed by a Principal Commissioner or

Commissioner of Central Excise/Customs/Service Tax, first appeal lies directly to
the Appellate Tribunal.
1.5 The provisions for appeals are contained in Chapter VI-A of the Central Excise
Act, 1944 and Chapter XV of the Customs Act, 1962. In case of Service Tax,
these provisions are contained in Sections 84, 85, and 86 of the Finance Act, 1994.
Further, certain sections of the Central Excise Act, 1944, contained in Chapter VI-
A, namely 35EE, 35F, 35FF to 35O, 35Q, 35R and 36 Sections have also been made
applicable to Service Tax matters Vide section 83 of the Finance Act, 1994.
1.6 The Rules pertaining to Appeal i.e. Central Excise (Appeals) Rules, 2001 have been
notified w.e.f. 01.07.2001. Similarly, the provisions relating to appeals in Customs
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 Appeals before the Commissioner (Appeals)

matters are contained in Customs (Appeals) Rules, 1982 which have been notified
w.e.f. 10.09.1982. In case of Service Tax, the provisions are contained in Rule 8 and
9 of the Service Tax Rules, 1994.
1.7 The provisions relating to appeals, as contained in Central Excise Act, 1944 and
rules made thereunder are also applicable to cases under Produce Cess Act, 1966,
and for Handloom Cess leviable under Khadi and other Handloom Industries
Development (Additional Excise Duty on Cloth) Act, 1953.
1.8 The appellate remedy available for orders passed by different authorities may be
summarised as given in Table-I below :-

TABLE-1

Sl. Order Passed by Appellate Authority

1 All officers upto & including Commissioner (Appeals)
Additional Commissioner
2 Principal Commissioner of CESTAT
Central Excise/ Commissioner
of Central Excise/
Commissioner (Adjudication)
of DGCEI/ DRI/
Commissioner (Appeals)
3. Commissioner (Appeals) CESTAT
However, in following cases, Appeals against order of
Commissioner (Appeals) shall lies before the Joint Secretary
(Revision Application)

(A) In Central Excise cases

(a) a case of loss of goods, where the loss occurs in transit from
a factory to a warehouse or to another factory, or from one
warehouse to another, or during the course of processing of the
goods in a warehouse or in storage, whether in a factory or in a
warehouse;
(b) a rebate of duty of excise on goods exported to any country
or territory outside India or on excisable materials used in the
manufacture of goods which are exported to any country or
territory outside India;
(c) goods exported outside India (except to Nepal or Bhutan)
without payment of duty;
(d) credit of any duty allowed to be utilized towards payment of
excise duty on final products under the provisions of the Central
Excise Act or the rules made thereunder and such order is

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 Appeals before the Commissioner (Appeals)

passed by the Commissioner (Appeals) on or after the date

appointed under section 109 of the Finance (No.2) Act, 1998]
(Date for this clause not yet notified by the Central
Government).
(B) In Customs cases
(a) any goods imported as baggage;
(b) any goods loaded in a conveyance for importation into India,
but which are not unloaded at their place of destination in India,
or so much of the quantity of such goods as has not been
unloaded at any such destination if goods unloaded at such
destination are short of the quantity required to be unloaded at
that destination;
(c) payment of drawback as provided in Chapter X, and the rules
made thereunder.
(C) In Service Tax cases
If the matter relates to grant of rebate of service tax on input
services, or rebate of duty paid on inputs, used in providing such
service.

4 CESTAT Supreme Court (Classification and Valuation cases)

5 CESTAT High Court (Other than classification and valuation matters)
6 High Court Supreme Court

1.9 This e-book is limited to the subject matter of filing appeal before
Commissioner (Appeals) and matter relating thereto. For appeals before Tribunal,
High Court and Supreme Court, separate e-Books are being prepared and will soon be
available for reading.

2. Statutory Provisions for Appeals before Commissioner (Appeals)

2.1 The provisions relating to appeals before the Commissioner (Appeals) are
contained in Section 35 & 35A of the Central Excise Act, 1944, Section 128 &
128A of the Customs Act, 1962 and Section 84 & 85 of the Finance Act, 1994.

2.2 The provisions relating to appeals, as contained in Central Excise Act, 1944 and
Rules made thereunder, are also applicable to cases under Produce Cess Act, 1966,
and for Handloom Cess leviable under the Khadi and other Handloom Industrial
Development (Additional Excise Duty on Cloth) Act, 1953.

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 Appeals before the Commissioner (Appeals)

2.3 The summaries of statutory provisions relating to appeals before Commissioner

(Appeals) are given in Table-2 below.
TABLE-2
Sl. Relevant Statutory
Description Particulars/ Details
No. Provision/ Authority (*)
1 Statutory provisions In Central Excise Section 35 & 35A of CEA
relating to appeals before In Customs Section 128 & 128A of CA
Commissioner (Appeals)
In Service Tax Section 84 & 85 of FA
2 Time limit for filing In Central Excise:- Section 35(1) of CEA
appeal before the 60 days from the date of
Commissioner (Appeals) communication of order appealed
against.
In Customs:- Section 128(1) of CA
60 days from the date of
communication of order appealed
against.
In Service Tax:- Section 85 (3A) of FA
2 Months from the date of receipt of
the decision/ order made on or after
28.05.2012 [earlier this period was 3
months u/s 85(3)]
3 Extension of time limit In Central Excise:- Section 35(1) of CEA
for filing the appeal subject 30 days from the original period of 60
to the satisfaction of the days
Commissioner (Appeals) In Customs:- Section 128(1) of CA
that appellant was 30 days from the original period of 60
prevented by sufficient days
cause from presenting the In Service Tax:- Section 85 (3A) of the
appeal within the aforesaid 1 month from the original period of 2 Finance Act, 1994
period of 60 days months w.e.f. 28.05.2012 [earlier this
period was 3 months u/s 85(3)]
4 Prescribed Form Rule 3 of Central Excise
Central Excise E.A.-1
(Appeals) Rules, 2001
Rule 3 of Customs
Customs C.A.-1
(Appeals) Rules, 1982
Service Tax S.T.-4 Rule 8(1) of the STR
5 Enclosures to be filed with Copy of O-in-O (being appealed Before 06.08.2014, Stay
Appeal against) application for stay of
[Appeal is required to be Self attested copy of proof of disputed amount was also
filed in duplicate in the payment of pre-deposit [Authority: required to be filed. With
prescribed format]. CBEC Circular No.984/08/2014-CX introduction of concept of
dated 16.09.2014.] pre-deposit, it is no longer
required.
6 Quantum of pre-deposit to 7.5% of the duty, in case where duty Section 35F of CEA and
be made before filing or duty and penalty are in dispute; or Section 129E of CA.
appeal (w.e.f. 06.08.2014) penalty, where such penalty is in
dispute (aggregate of all penalties
imposed)
Note: (*) CEA means Central Excise Act, 1944; CA means Customs Act, 1962; FA
means Finance Act, 1994; and STR means Service Tax Rules,1994.

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 Appeals before the Commissioner (Appeals)

3. Other Important points

3.1. Any person aggrieved by any decision or order passed by a Central Excise Officer,
lower in rank than a Principal Commissioner of Central Excise or Commissioner
of Central Excise may appeal to the Commissioner of Central Excise (Appeals)
within specified period.
3.2. Specified period (of 60 days or 2 months, as the case may be) can be extended (by
further period of 30 days or one month, as the case may be) by Commissioner
(Appeals). This can be done only if he is satisfied that the appellant was prevented
by sufficient cause from presenting the appeal within the specified period.
3.3. Appeal is required to be filed in Specified format in duplicate along with a copy of
the decision or order appealed against.
3.4. Separate formats have been prescribed for the party and the Department for filing
appeal before the Commissioner (Appeals)

3.5. The Grounds of appeal and the form of verification as contained in Form No.
E.A.-1/ C.A.-1/ S.T.-4 is required to be signed by person as specified in Table 3
below :-

TABLE-3

Sr.
Appeal by Who can sign appeal form?
No.
1. In the case of an individual, the individual himself
2. If the individual is absent from India the individual concerned or by some person
duly authorized by him in this behalf
3. If the individual is a minor or is mentally his guardian or by any other person competent
incapacitated from attending to his affairs, to act on his behalf.
4. In the case of a Hindu undivided family The karta
5. If the karta is absent from India or is Any other adult member of such family
mentally incapacitated from attending to his
affairs
6. In the case of a company or local authority The principal officer thereof;
7. In the case of a firm Any partner thereof, not being a minor
8. In the case of any other association Any member of the association or the principal
officer thereof.
9. In the case of any other person The person himself or any person competent to
act on his behalf.

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 Appeals before the Commissioner (Appeals)

4. Applications (Appeals) by the Department before Commissioner

(Appeals)

The summary of statutory provisions relating to Departmental Application (i.e.

Appeals) before Commissioner (Appeals) is given in Table-4 below.

TABLE 4
Relevant Statutory
Sl.
Description Particulars/ Details Provision/ Authority
No.
(*)
1 Statutory provisions relating In Central Excise Section 35E(2) of CEA
to Departmental appeals In Customs Section 129D(2) of CA
before the Commissioner
(Appeals) In Service Tax Section 84 of FA
2 Time limit for filing appeal The order directing to apply to the Central Excise:-
before the Commissioner Commissioner (Appeals) should be Section 35E(3) & (4) of
(Appeals) made within 3 months from the date of CEA, 1944
communication of the order to be
appealed against, whether the issue Customs:-
relates to Central Excise or Customs or Section 129D(3) & (4) of
ST. Thereafter, an application has to be CA
filed within 1 month of the date of
communication of the said order, which Service Tax:-
is treated as appeal. Section 84 of FA
3 Prescribed Forms Rule 4 of Central Excise
Central Excise E.A.-2
(Appeals) Rules, 2001
Rule 4 of Customs
Customs C.A.-2
(Appeals) Rules, 1982
ST-4, though no Refer Section 84(3) of FA
Service Tax specific form
prescribed.
5 Enclosures to be filed with (i) The form of application including
Application (Appeal) statement of facts and grounds of
application (in duplicate)
(ii) Two copies of the decision or order
passed by the adjudicating authority
(one of which at least shall be a
certified copy)
(iii) A copy of the order of the Principal
Commissioner /Commissioner of
Central Excise under sub-section (2)
of Section 35E of the Central Excise
Act /129D(2) of Customs Act /
84(1) of Finance Act.
6 Quantum of pre-deposit to Nil Section 35F of CEA and
be made before filing appeal Section 129E of CA.
(w.e.f. 06.08.2014)
Note:(*) CEA means Central Excise Act, 1944; CA means Customs Act, 1962; FA
means Finance Act, 1994; and STR means Service Tax Rules

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 Appeals before the Commissioner (Appeals)

5. Procedures at the Stage of Commissioner (Appeals)

5.1 The Commissioner (Appeals) is required to give an opportunity to the appellant to

be heard, if he so desires [Ref: Section 35A (1) of CEA, 1944/Section 128 A(1)
of Customs Act, 1962].
5.2 W.e.f. 10.09.2004, a new sub section 35(1A) of CEA, 1944/128 (1A) of CA, 1962
has been inserted which deals with the adjournment of hearing of appeal. On being
shown sufficient cause at any stage of hearing of an appeal, the Commissioner
(Appeals) should, grant time from time to time to the parties and adjourn the
hearing of appeal. However, such adjournment can only be granted three times to
a party during hearing of the appeal.
5.3 The Commissioner (Appeals) shall, after making such further inquiry as may be
necessary, pass such order, as he thinks just and proper, confirming, modifying or
annulling the decision or order appealed against. However, an order enhancing
any penalty or fine in lieu of confiscation or confiscating goods of greater value or
reducing the amount of refund should not be passed unless the appellant has been
given a reasonable opportunity of showing cause against the proposed order. In
service tax, such order may include an order enhancing the service tax, interest or
penalty [Ref: Section 35A (3) of CEA, 1944/ Section 128A(3) of Customs Act,
1962/ 85(4) of the FA, 1994].
5.4 The Commissioner (Appeals) should, wherever possible, hear and decide every
appeal within a period of six months from the date on which it is filed. [Ref:
Section 35A (4A) of CEA, 1944/ Section 128A(4A) of Customs Act, 1962]
5.5 On the disposal of the appeal, the Commissioner (Appeals) is required to
communicate the order passed by him to the appellant, the adjudicating authority,
the Principal Chief Commissioner or Chief Commissioner and the Principal
Commissioner or Commissioner of Central Excise. [Ref: Section 35A(5) of
CEA, 44/ Section 128A(5) of Customs Act, 1962]
5.6 In section 85 (5) of the Finance Act, 1994, the provisions has been incorporated to
provide that the Commissioner of Central Excise (Appeals) will exercise the same
powers and follow the same procedure as he exercise and follows in hearing the
appeals and making orders under the Central Excise Act, 1944. While in Central
Excise Act, 1944, the section 35 A specifically deals with the Procedure in Appeals,
no such separate section exists in Service Tax. The section 35 A of the Central
Excise Act, 1944 has been made applicable to Service tax matters by virtue of
Section 85(5) of the Finance Act, 1994 subject to modification as mentioned in
Section 84 and 85 of the Finance Act, 1994.
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 Appeals before the Commissioner (Appeals)

6. Other Important Issues

(A) Service of Copy of Appeal to the Respondent Adjudicating

Authority is mandatory.

6.1 As per CBEC Instruction issued vide letter F. No. 275/42/2004-CX 8A dated
05.09.2005, the following directions have been issued to the field formations :-

(i) The appellant must serve a copy of the appeal on the respondent adjudicating
authority, so that, he can take appropriate timely action for defending the case
including engagement of an advocate, in important cases, involving substantial
question of law and/ or high revenue stake; and
(ii) The office of the Commissioner (Appeals) must send a copy of the hearing
intimation memo to the respondent Adjudicating Authority, simultaneously with
the appellant.

As such, now all the appellants are required to serve a copy of the appeal, to the
respondent Adjudicating Authority and to submit a proof of service before the
Commissioner (Appeals), before the appeal is heard.

(B) Production of Additional Evidence before Commissioner

(Appeals)
6.2 As per Rule 5 of the Central Excise (Appeals) Rules, 2001, the appellant shall not
be entitled to produce before the Commissioner (Appeals) any evidence, whether
oral or documentary, other than the evidence produced by him during the course
of the proceedings before the adjudicating authority except in the circumstances
given in said Rule 5(1).
6.3 It has also been provided that no evidence shall be admitted under Rule 5(1) unless
the Commissioner (Appeals) records in writing the reasons for its admission.
6.4 It has also been provided that the Commissioner (Appeals) shall not take any
evidence produced under Rule 5 (1) unless the adjudicating authority or an officer
authorised in this behalf by the said authority has been allowed a reasonable
opportunity to examine the evidence or document or to cross-examine any witness
produced by the appellant; or to produce any evidence or any witness in rebuttal of
the evidence produced by the appellant.

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 Appeals before the Commissioner (Appeals)

6.5 However, it is pertinent to mention here that nothing contained in this rule shall
affect the power of the Commissioner (Appeals) to direct the production of any
document, or the examination of any witness, to enable him to dispose of the
appeal.

(C) Remand of Cases by Commissioner (Appeals)- Not allowed

6.6 Section 35A(3) of the Central Excise Act, 1944 / Section 128A(3) of the Customs
Act, 1962, as it existed before 11.5.2001, provided that Commissioner (Appeals)
shall, after making such further enquiry as may be necessary, pass such order, as he
thinks just and proper, confirming, modifying or annulling decision or order
appealed against or may refer the case back to the adjudicating authority with
such direction as he may think fit for a fresh adjudication or decision as the
case may be, after taking additional evidence, if necessary.

6.7 An amendment was brought out in the aforesaid sections vide Finance Act,
2001 w.e.f. 11.5.2001 deleting the phrase as mentioned in bold above with an
intention to withdraw the powers to Commissioner (Appeals) to remand the cases
for fresh adjudication to the original adjudication authorities. After the
amendment in 2001, the said Sections read as follows:-

The Commissioner(Appeals) shall, after making such further enquiry

as may be necessary, pass such order, as he thinks just and proper,
confirming, modifying or annulling the decision or order appealed
against.

6.8 The matter whether the Commissioner (Appeals) continues to have powers to
remand beyond 11.5.2001 came up before the Gujarat High Court in the case of
M/s. Medico Lab. The Honble High Court of Gujarat, vide order dated 21.9.2004
in the case of CCE, Ahmedabad-I Vs. Medico Lab [2004(173) ELT 117 (Guj.)],
held that the Commissioner (Appeals) continues to have the power to remand
even after the amendment. (Para 14 of the Order refers).

6.9 Later, Honble Punjab & Haryana High Court in the case of CC, Amritsar Vs.
M/s. Enkay (India) Rubber Co. Pvt. Ltd. vide order dated 8.3.2007 and in the case
of CCE, Jallandhar Vs. B.C. Kataria[2008(221) ELT.508 P&H] vide order dated
6.9.2007 had held that the Commissioner(Appeals) have been divested of the
powers to remand the cases back to adjudicating authority after deletion of that
power from Section 35A(3) of Central Excise Act vide amendment made in
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 Appeals before the Commissioner (Appeals)

2001. Honble High Court has distinguished the judgement of the Gujarat High
Court in the case of Medico Labs in this case.

6.10 Finally, Honble Supreme Court in its judgement dated 1.3.2007 in Civil Appeal
No. 6988/2005 in the case of MIL India Ltd. [2007(210) ELT.188(SC)] has
observed that in fact, the power of remand by the Commissioner(Appeals) has
been taken away by amending Section 35A with effect from 11.5.2001 under the
Finance Bill, 2001. Under the Notes to clause 122 of the said Bill it is stated that
clause 122 seeks to amend Section 35A so as to withdraw the power of the
Commissioner(A) to remand matters back to the adjudicating authority for fresh
consideration.

6.11 In light of the above backdrop, CBEC issued instruction vide F. No.
275/34/2006-CX.8A dt. 18.02.2010 wherein it was instructed that the
Commissioner (Appeals) should follow the said judgments strictly. It may also be
brought to their notice that Honble Supreme Court in the case of MIL India Ltd.,
while noting that the powers of remand had been taken away, has also categorically
stated that the Commissioner (A) continues to exercise the power of adjudicating
authority in the matter of assessment and the Commissioner(A) can add or
subtract certain items from the order of assessment made by the adjudicating
authority and the order of Commissioner (A) could also be treated as an order of
assessment. Boards instructions issued vide F. No. 275/34/2006-CX.8A
dated 25.7.2008 in this regard were reiterated wherein Commissioners (Appeals)
were advised to resort to enquiry in such appeals as may be necessary in the
facts and circumstances of the case before passing a just and fair order in
accordance with the provisions of the Act.

(D) Mandatory pre-deposit for filing Appeal by the Appellant before

the Commissioner (Appeals)
6.12 After enactment of the Finance Act (No.2), 2014 w.e.f. 06.08.2014, Section 35F of
the Central Excise Act, 1944 (also applicable to Service Tax matters vide Section
83 of Finance Act, 1994) and Section 129E of the Customs Act, 1962 have been
substituted with new sections to prescribe mandatory pre-deposit as a percentage
of the duty demanded where duty demanded is in dispute or where duty demanded
and penalty levied are in dispute. Where penalty alone is in dispute, the pre-
deposit shall be calculated on the penalty imposed.

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 Appeals before the Commissioner (Appeals)

6.13 The amended provisions apply to appeals filed after 6th August, 2014. At present,
the quantum of pre-deposit is 7.5%. To know more about the concept of pre-
deposit while filing appeal before Commissioner (Appeals) and CESTAT,
please refer to e-book on pre-deposit for filing appeals at
http://nacenkanpur.gov.in/admin/media_images/Pre-Deposit%20for%20Filing%20Appeals.pdf

(E) Principle of Natural Justice

6.14 The principle of natural justice forms the basis of the provisions relating to appeals
under Central Excise Act, 1944 or Customs Act, 1962 or Finance Act, 1994. It is
now firmly established that the principles of natural justice have to be observed in
all judicial, quasi-judicial and administrative proceedings which involve civil
consequences to the parties. Principles of natural justice are those rules which have
been laid down by the Courts over a period of time as being the minimum
protection of the rights of the individual against the arbitrary procedure that may
be adopted by a judicial, quasi-judicial and administrative authority while issuing an
order affecting those rights. These rules are intended to prevent such authority
from doing injustice.
6.15 The purpose of following the principles of natural justice is the prevention of
miscarriage of justice either by way of non application of mind or by way of
showing any bias. Though bias may be of many types, still total elimination of
official bias is desirable in departmental adjudication and appellate mechanism. To
know more about the principles of natural justice, refer to e-book on principles of natural justice at
http://nacenkanpur.gov.in/admin/media_images/Principles%20of%20natural%20justice.pdf.

7. Text of Relevant Statutory Provisions/Circulars/Instructions

7.1 Text of Relevant Sections/Rules of Customs/Central

Excise/Service Tax laws

7.1.1 For the sake of breviety, the text of sections i.e. 35, 35 A and 35 E of the Central Excise Act,
1944; Section 128, 128A and 129 D of the Customs Act, 1962 and Section 84 & 85 of the
Finance Act, 1994 has not been reproduced here. The same may be downloaded from the
Website of CBEC i.e. www.cbec.gov.in.

7.1.2 Similarly, the text of Relevant Rules namely, Rule 3 of the Central Excise (Appeals) Rules,
2001; Rule 3 of the Customs (Appeals) Rules, 1983 and Rule 8 of the Service Tax Rules,
1994 have also not been reproduced here. The same may be downloaded from the website of
CBEC i.e. www.cbec.gov.in
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 Appeals before the Commissioner (Appeals)

7.2 Text of Relevant Circulars

7.2.1 Instructions issued vide F.No.275/34/2006-CX.8A, dated 08.02.2010

Sub:- Powers of Commissioner (Appeals) to remand cases Reg.

Section 35A(3) of the Central Excise Act, 1944 / Section 128A(3) of the Customs Act, 1962
as it existed before 11.5.2001 provided that Commissioner (Appeals) shall, after making such further
enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or
annulling decision or order appealed against or may refer the case back to the adjudicating
authority with such direction as he may think fit for a fresh adjudication or decision as the
case may be, after taking additional evidence, if necessary.

2. An amendment was brought out in the aforesaid sections vide Finance Act, 2001 w.e.f.
11.5.2001 deleting the phrase as mentioned in bold above with an intention to withdraw the powers to
Commissioner (Appeals) to remand the cases for fresh adjudication to the original adjudication
authorities. After the amendment in 2001, the said Sections read as follows:-

The Commissioner (Appeals) shall, after making such further enquiry as may be necessary,
pass such order, as he thinks just and proper, confirming, modifying or annulling the decision
or order appealed against.

3. The matter whether the Commissioner (Appeals) continues to have powers to remand beyond
11.5.2001 came up before the Gujarat High Court in the case of M/s. Medico Lab. The Honble High
Court of Gujarat, vide order dated 21.9.2004 in the case of CCE, Ahmedabad-I Vs. Medico Lab, held
that Commissioner(Appeals) continues to have the power to remand even after the amendment.

4. Honble Punjab & Haryana High Court in the case of CC, Amritsar Vs. M/s. Enkay (India)
Rubber Co. Pvt. Ltd. vide order dated 8.3.2007 and in the case of CCE, Jallandhar Vs. B.C. Kataria
[2008(221) ELT.508 P&H] vide order dated 6.9.2007 had held that the Commissioner (Appeals) have
been divested of the powers to remand the cases back to adjudicating authority after deletion of that
power from Section 35A(3) of Central Excise Act vide amendment made in 2001. Honble High
Court has distinguished the judgement of the Gujarat High Court in the case of Medico Labs in this
case and also stated that the reliance on the Honble Supreme Court judgement in the case
of Umesh Dhaimonde (1998(98) ELT 584) cannot be made as in that case Honble Supreme Court
was not dealing with the provisions where earlier power of remand was specifically conferred and
subsequently taken away by amendment carried by Finance Act, 2001.

5. The Honble Supreme Court in its judgement dated 1.3.2007 in Civil Appeal No. 6988/2005 in
the case of MIL India Ltd. [2007(210) ELT.188(SC)] has observed that in fact, the power of
remand by the Commissioner(Appeals) has been taken away by amending Section 35A with
effect from 11.5.2001 under the Finance Bill, 2001. Under the Notes to clause 122 of the said
Bill it is stated that clause 122 seeks to amend Section 35A so as to withdraw the power of the
Commissioner(A) to remand matters back to the adjudicating authority for fresh
consideration. The said decision of the Supreme Court was brought to the notice of CESTAT in
the case of CCE, Jallandhar Vs. Hawkins Cookers Ltd. reported in 2007(8)RLT.7, but the Tribunal
held that the Supreme Court in the said case had only noted the provisions of amended law whereas
the specific issue whether Commissioner(A) has power to remand after amendment to provisions of
Section 35A has been considered by the Honble Gujarat High Court in the case of Medico Lab and
the High Court has held that the Commissioner (A) has power to remand under the amended
provisions also. The appeal (CEA No.29/2008) filed by the Commissioner of Central Excise,

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 Appeals before the Commissioner (Appeals)

Jallandhar against the said order in the Hawkins Cookers case stating that the said observations as
quoted above are part of the ratio decidendi of the decision of the Honble Supreme Court, has been
allowed by the Punjab & Haryana High Court vide order dated 14.7.2008 relying upon its own
judgement in the case of CCE, Jallandhar Vs. B.C. Kataria [2008(221) ELT.508].

6. In the light of the observations of Honble Supreme Court in the case of MIL India Ltd. and
the judgement of Honble High Court of Punjab & Haryana in the case of M/s. Enkay (India) Rubber
Co. Pvt. Ltd., M/s. B.C. Kataria and M/s. Hawkins Cookers Ltd., you are requested to issue suitable
instructions to the Commissioners(A) working under your jurisdiction to follow the said judgments
strictly. It may also be brought to their notice that Honble Supreme Court in the case of MIL India
Ltd., while noting that the powers of remand had been taken away, has also categorically stated that
the Commissioner (A) continues to exercise the power of adjudicating authority in the matter of
assessment and the Commissioner(A) can add or subtract certain items from the order of assessment
made by the adjudicating authority and the order of Commissioner (A) could also be treated as an
order of assessment. Board instructions dated 25.7.2008 (copy enclosed) may be referred in this
regard.

7. The receipt of this instruction may please be acknowledged. A copy of the instruction issued
to the Commissioners(Appeals) under your jurisdiction may also be endorsed to the Board. The issue
may also be monitored at your level.

ANNEXURE
7.2.2 Instruction issued vide F.No. 275/34/2006-CX.8A, dated 25.07.2008
Subject: Procedure in Appeal under Sec.35A of the Central Excise Act/Section 128A of
Customs Act /Sec.85 of the Finance Act, 1994 reg.

Section 35A of the Central Excise Act, 1994 prescribes the procedure in appeal to be followed
by Commissioner (Appeals) while deciding the appeals filed before him under Section 35/35E of the
Central Excise Act 1944. Similar provisions exist under Section 128A of the Customs Act, 1962 and
Section 85 of the Finance Act, 1994.

2. Sub-Section (3) of the Section 35A of Central Excise Act, 1994 reads as follows-

The Commissioners(Appeals) shall, after making such further enquiry as may be

necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the
decision or order appealed against;

3. The Board has noted that Commissioner (Appeals) do not resort to the mechanism of further
enquiry as provided to them under the appeal procedure as above in such cases where it may be
necessary before passing the order. Sub-Rule 4 of Rule 5 of Central Excise (Appeals) Rules, 2001
provides that nothing contained in said rule shall affect the power of the Commissioner (Appeals) to
direct the production of any document, or the examination of any witness to enable him dispose of the
appeal.

4. In the light of the provisions as contained in the statute and the rules made there under, I am
directed to request you to advise Commissioners (Appeals) working in your jurisdiction to resort to
enquiry in such appeals as may be necessary in the facts and circumstances of the case before
passing a just and fair order in accordance with the provisions of the Act.

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 Appeals before the Commissioner (Appeals)

8. Form and Formats

FORM NO. E.A. 1
[See Rule 3 of Central Excise (Appeal) Rules,2001]
Form of Appeal to the [Commissioner] (Appeals) under
Section 35 of the Act

(1) No......................................................of................................2001
(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 the decision or order.
(4) Date of communication of the decision or order appealed against
to the appellant.
(5) Address to which notices may be sent to the appellant.

(6)(i) Description and classification of goods

(ii) Period of dispute

(iii) Amount of duty, if any, demanded for the period mentioned in item (ii)

(iv) Amount of refund, if any claimed for the period mentioned in item (ii)

(v) Amount of fine imposed.

(vi) Amount of penalty imposed

(vii) Market value of seized goods

(7) Whether duty or penalty or both is deposited; if not whether any application for dispensing with such
deposit has been made. (A copy of the challan under which the deposit is made shall be furnished).

(8) Whether the appellant wishes to be heard in person ?

(9) Reliefs claimed in appeal.

Statement of facts
Grounds of appeal

Signature of the authorised representative, if any Signature of the applicant

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 Appeals before the Commissioner (Appeals)

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 representative, if any. Signature of the applicant

NOTES: (1) The grounds of appeal and the form of verification shall be signed by the appellant in
accordance with the provisions of rule 3 .

(2) The form of appeal including the statement of facts and the grounds of appeal shall be filed in
duplicate and shall be accompanied by a copy of the decision or order appealed against.

-----------------

FORM NO. E.A.-2

(See Rule 4 of Central Excise (Appeals) Rules,2001)
Form of Application to the Commissioner (Appeals)
[under Sub Section (4) of Section 35E of the Act]

No..............................................of................................................-200..................

........................................................................................................Applicant

Vs.

...................................................................................................Respondent

(1) Designation and address of the applicant (If the applicant is not the adjudicating authority, a copy of
the authorisation from the [Commissioner] of Central Excise to make the application should be
enclosed).

(2) Name and address of the respondent.

(3) Designation and address of the officer passing the decision or order in respect of which this
application is being made and the date of the decision or order.

(4) Date on which order under sub-section (1) of Section 35E has been passed by the Board.

(5) Date of communication of the order referred to in (3) above to the adjudicating authority.

(6) (i) Description and classification of goods

(ii) Period of dispute

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 Appeals before the Commissioner (Appeals)

(iii) Amount of duty, if any, demanded for the period mentioned in column (ii)

(iv) Amount of refund, if any, claimed for the period mentioned in column (ii)

(v) Amount of fine imposed

(vi) Amount of penalty imposed

(vii) Market value of seized goods.]

(7) Reliefs claimed in the application.

Statement of facts
Grounds of application

Signature of the applicant.

NOTE : The form of application including statement of facts and grounds of application shall be filed
in duplicate and accompanied by two copies of the decision or order passed by the adjudicating authority
(one of which at least shall be a certified copy) and a copy of the order of the [Commissioner] /Principal
Commissioner of Central Excise under sub-section (2) of Section 35E of the Act.
----------------------------

FORM NO. C.A.-1

[Refer Rule 3 of the Customs (Appeal) Rules, 1982]
Form of Appeal to the Commissioner (Appeals) under Section 128
of the Customs Act, 1962

(1) No.............................. of ....................19.............

(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 the
decision or order.

(4) Date of communication of the decision or order appealed against to the appellant.

(5) Address to which notices may be sent to the appellant

(6) Whether duty or penalty or both is deposited : If not, whether any application for dispensing with such
deposit has been made. (A copy of the Challan under which is deposit is made shall be furnished).

(6A) Whether the appellant wishes to be heard in person.

(7) Reliefs claimed in appeal.

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 Appeals before the Commissioner (Appeals)

Statement of Facts
Grounds of appeal

(i)

(ii)

(iii) etc.

Signature of authorised Signature of the

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......................19.................

Place...............................
Date................................

Signature of authorised Signature of the

representative, if any. appellant.

Notes (1) The grounds of appeal and the form of verification shall be signed by the appellant in
: accordance with the provisions of Rule 3 of the Customs (Appeals) Rules, 1982.

(2) The form of appeal, including the statement of facts and the grounds of appeal shall be filed in
duplicate and shall be accompanied by a copy of the decision or order appealed against.

FORM NO. C.A.-2

[Refer Rule 4 of the Customs (Appeal) Rules, 1982]
Form of Application to the Commissioner (Appeals) under Section
129D(4) of the Customs Act, 1962

Appeal No.......................................... of .................................19................

.....................................................................................Applicant
Vs.
.................................................................................Respondent

(1) Designation and address of the applicant (If the applicant is not the adjudicating authority, a copy of the
authorisation from the Commissioner of Customs to make the application should be enclosed).

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 Appeals before the Commissioner (Appeals)

(2) Name and address of the respondent.

(3) Designation and address of the officer passing the decision or order in respect of which this application is
being made and the date of the decision or order.

(4) Date on which the order under sub-section (2) of Section 129D has been passed by the Commissioner of
Customs.

(5) Date of communication of the order referred to in (4) above to the adjudicating authority.

(6) Relief claimed in the application.

Statement of facts
Grounds of application

(i)

(ii)

(iii) etc.

Signature of the applicant

Note The form of application, including the statement of facts and the grounds of application shall be
: filed in duplicate and shall be accompanied by two copies of the decision or order passed by the
adjudicating authority (one of which at least shall be a certified copy) and a copy of the order of the
Commissioner of Customs under sub-section (2) of section 129D of the Act.

FORM ST-4
Form of Appeal to the Commissioner of Central Excise (Appeals) under section 85 of the
Finance Act,1994 (32 of 1994)

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 notices may be sent to appellant :
5A. (i) Period of dispute :
(ii) Amount of service tax, if any, demanded for the :
period mentioned in column (i)
(iii) Amount of refund, if any, claimed for the period :
mentioned in column (i)
(iv) Amount of interest :

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 Appeals before the Commissioner (Appeals)

(v) Amount of penalty :

(vi) Value of the taxable service for the period :
mentioned in column (i)
6. Whether service tax or penalty or interest or all the three :
have been deposited?
6A. Whether the appellant wishes to be heard in person? :
7. Relief claimed in appeal :

STATEMENT OF FACTS
Grounds of appeal
Signature of the authorized Signature of the appellant
representative, if any

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 _________20__
Place:
Date :

Signature of the authorized Signature of the appellant or his

representative, if any authorized representative

Note : The form of appeal including the statement of facts and the grounds of appeal shall be filed in
duplicate and shall be accompanied by a copy of the decision or order appealed against.

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