WHETHER THE COMMISSIONER CAN AUTHORIZE THE FILING OF APPLICATION BEFORE COMMISSIONER (APPEALS) UNDER SEC. 84 OF THE FINANCE ACT, 1994?

[Mr. M. GOVINDARAJAN]

Section 85 of the Finance Act, 1994 ('Act' for brevity) provides for appeals to the Commissioner of Central Excise (Appeals) by any person aggrieved by any decision or order passed by an adjudicating authority subordinate to the Commissioner of Central Excise within three months from the date of receipt of the order of the adjudicating authority relating to service tax, interest or penalty. The term 'any person aggrieved' here refers to the assessee or persons other than revenue but not the revenue. The Department, therefore, cannot approach the Commissioner of Central Excise (Appeals) against its own order.

Section 84 of the Act provides for revision of orders by the Commissioner of Central Excise. The Commissioner of Central Excise may call for the record of a proceeding in which an adjudicating authority subordinate to him has passed any decision or order and may make such inquiry or cause such inquiry to be made and pass such order thereon as he thinks fit after giving reasonable opportunity of being heard to the assessee. Section 84 further provides that no order shall be passed by the Commissioner of Central Excise in respect of any issue if an appeal against such issue is pending before the Commissioner of Central Excise. It is, therefore, clear that the Department cannot file appeal before Commissioner (Appeals) instead of it the Commissioner is give revisionary power under Section 84.

The question raised to be answered in this Article is whether the Commissioner can authorize the filing of application before the Commissioner (Appeals) under Section 84 of the Finance Act? In 'Commissioner of Central Excise & Service Tax, Siliguri V. Mount Distilleries Limited' - [2009 -TMI - 33231 - CESTAT KOLKATA] the answer for the above question is given.  In this case the Deputy Commissioner, Central Excise, Gangtok Division, Siliguri has sanctioned refund claim to the respondents.  Shri C.M. Mehra, holding the charge of the Siliguri Commissionerate has passed the Order-in-Review dated 10.12.2007 directing to file an application before Commissioner (Appeals) under Section 84 of the Act. The Commissioner (Appeals) rejected the appeal filed by the Department since he has no power to condone the delay beyond 90 days. The Committee of Commissioners directed the Department to file appeal against the order of Commissioner (Appeals) before the tribunal and the present appeal lies.

The Department contended that under Section 84 of the Finance Act, 1994 the Commissioner can authorize filing an appeal. The tribunal after considering the arguments held the following:

>>> Section 84 makes it clear that this section makes a departure from the prevailing scheme under the Customs Act, 1962 and the Central Excise Act, 1944, under which an Order-in-Original passed by a subordinate official can be reviewed by the Commissioner subsequent to which he can authorize filing of an application to the Commissioner (Appeals).  There are also provisions in those statutes to deem those applications as appeals;

>>> Section 84 authorizes the Commissioner to revise the order of the subordinate authority after giving an opportunity of being heard to the assessee;

>>> Section 84 does not provide that the Commissioner can authorize the filing of an application as in the case of Central Excise Act or Customs Act;

>>> The argument of the Department that under Section 84 of the Finance Act, the Commissioner can authorize filing an appeal is not supported either by a specific provision of law or by the practice followed throughout the country;

>>> This is the first time the tribunal noticed that such an impermissible course of action has been adopted under Section 84;

>>> When the Commissioner has been given statutory power to revise the order of the subordinate authority it is rather strange that he should direct filing an appeal to the Commissioner (Appeals) which shows that the Departmental authorities are working in a mechanical manner without application of mind and without reference to the legal provisions under such orders are being purportedly passed.

>>> The order of Commissioner directing filing an appeal to the Commission (Appeals) is not sustainable as Section 84 of the Finance Act, 1994 does not permit passing such an order;

>>> The appeal filed by the Department is disposed off holding that the initial Order-in-Original passed by the Deputy Commissioner sustains.

The Finance Act, 2009 now dispensed with the revisionary power of Commissioner under Section 84 of the Finance Act, 1994.

New Section 84 provides the procedure to apply to the Commissioner of Central Excise (Appeals) as follows:

• The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceedings in which an adjudicating authority subordinate to him has passed any decision or order under this Chapter for this purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any Central Excise Officer subordinate to him to apply to the Commissioner of Central Excise (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order.

• Every order shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority.

• Where in pursuance of an order, the adjudicating authority or any other officer authorized in this behalf makes an application to the Commissioner of Central Excise (Appeals) within a period of one month from the date of communication of the order to the adjudicating authority, such application shall be heard by the Commissioner of Central Excise (Appeals), as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Chapter regarding appeals shall apply to such application.

It is further explained that it is hereby declared that any order passed by an adjudicating officer subordinate to the Commissioner of Central Excise immediately before the commencement of this substitution, shall continue to be dealt with by the Commissioner of Central Excise as if this section had not been substituted.