Report No. 115
3.1. The most important and extensive revenue generating indirect taxes are customs and excise duties. The bulk of the tax revenues of the Central Government to the tune of 80% of the revenue receipts is derived from the customs and central excise duties. Section 12 of the Customs Act, 1962 empowers the Government to levy duty of customs at such rates as may be specified in the First and Second schedules of the Customs Tariff Act, 1975. Similarly, section 3 of the Central Excises and Salt Act, 1944 empowers the Government to levy and collect excise duty on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule.
3.2. Both the aforementioned Acts designate officers, confer power on them and prescribe procedure for levy and collection of tax as authorised by each of the Acts Comprehensive rules have been made under both the Acts providing for their effective implementation. The First and Second schedules of the Customs Tariff Act, 1975 and First Schedule of the Central Excises and Salt Act, 1944, which specify the goods imported into and exported from India and excisable goods respectively which become dutiable have undergone extensive amendments and revisions and numerous additions have been made in them over years.
It is an undeniable fact that duties of customs and excise are major sources of revenue in the budget of the Central Government. With the escalating industrialisation of the country, different types of goods which were not manufactured in India or were not required to be imported are now being manufactured in India or are being imported in India. Similarly, numerous manufactured goods are exported out of India. The tariff schedules in both the Acts keep pace with this development.
3.3. Both the Acts provide for a hierarchy of officers empowered to deal with disputes and controversies arising in the implementation and enforcement of the Acts. This report is concerned with the stage at which provision for appeals have been incorporated in both the Acts.
3.4. Section 128 of the Customs Act, 1962 provides for an appeal at the instance of an aggrieved person by any decision or order under the Act by an officer of customs lower in rank than a Collector of Customs to the Collector (Appeals) within the period of limitation prescribed therein. Section 129 envisages the constitution of an Appellate Tribunal to be called the Customs, Excise and Gold (Control) Appellate Tribunal consisting of as many Judicial and Technical Members as it thinks fit to exercise the powers and discharge the functions conferred on the Appellate Tribunal by the Act. Sub-section (2) of section 129 prescribes qualifications for being eligible to be a Judicial or Technical Member of the Appellate Tribunal. The Appellate Tribunal will have a President and one or more Vice-Presidents as may be necessary.
Section 129A confers appellate jurisdiction on the Appellate Tribunal against the orders enumerated therein. Every appeal to the Appellate Tribunal has to be heard by the Appellate Tribunal implying that it does not enjoy the power to dismiss an appeal at the admission stage in limine even if it is of the opinion that it is of a frivolous nature. The Appellate Tribunal enjoys wide jurisdiction to interfere with questions of law and facts arising from the decision under appeal. It has power to remand the matter for a fresh adjudication or decision after taking additional evidence, if necessary. It enjoys the power to suo motu rectify or amend its own order or exercise the same power if the mistake is brought to its notice by the Collector of Customs or by the other party to the appeal, with this limitation that it can be exercised within a period of four years from the date of the order sought to be rectified.
Section 129C envisages benches of the Appellate Tribunal to be constituted for dealing with the appeals. Ordinarily each bench to be composed of a Judicial Member and a Technical Member. It also envisages a special bench to be set up in respect of certain specified appeals. Section 129D confers revisional jurisdiction on/ the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 to examine the record of any proceeding in which a Collector of Customs as an adjudicating authority has passed any decision or order for the purpose of satisfying itself as to the legality or propriety of any such decision or order and in exercise of this jurisdiction, the Board may direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order.
Similar revisional jurisdiction is conferred on the Collector of Customs which can be exercised suo motu with reference to the record and proceedings of an adjudicating authority subordinate to him. Such revisional jurisdiction can be exercised within a period of two years from the date of the decision or order of the adjudicating authority. Section 129E provides that a person desirous of appealing against a decision against which an appeal lies under Chapter XV, shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied. The Appellate Authority has power to dispense with the deposit or direct the deposit subject to conditions.
3.5. Section 130 confers power on the Collector of Customs or the other party to the proceeding before the Appellate Tribunal to make an application accompanied by a fee therein prescribed requiring the Appellate Tribunal to refer to the High Court any question of law arising out of such order and subject to the other provisions contained in the section, the Appellate Tribunal shall, within 120 days of the receipt of such application, draw up a statement of the case and refer it to the High Court. The Appellate Tribunal may decline to make the reference, if it is satisfied that no question of law arises from its order which requires to be referred to the High Court.
Briefly, the procedure prescribed under section 130 is analogous to the procedure prescribed under sections 256(1) and (2) of the Income-tax Act, 1961 which has been extensively dealt with in Chapter I of this report. Section 130A is in pari materia with section 257 of the Income-tax Act, 1961 enabling the Appellate Tribunal to make a direct reference to the Supreme Court of India in the circumstances mentioned therein section 130E provides for an appeal against a decision of the High Court to the Supreme Court of India.