APPEAL UNDER SERVICE TAX (Appeal to Appellate Tribunal)

[Dr. Sanjiv Agarwal]

According to Section 86, any assessment order passed by Commissioner of Central Excise under Section 73 or Section 83A or orders of revision by Commissioner of Central Excise under Section 84 or orders of the Commissioner of Central Excise (Appeals) under Section 85 are appealable before the Appellate Tribunal (CEGAT) by any of the aggrieved parties i.e., assessee, Commissioner of Central Excise or the Board. CEGAT has been renamed as CESTAT (Customs, Excise & Service Tax Appellate Tribunal) w.e.f. 6.6.2003.

Such an appeal can be preferred within a period of three months from the date on which such order was received. This period can be extended if proper cause is provided or shown to the Tribunal. Both the parties are also entitled to file a memorandum of cross objections within 45 days from the date of receipt of notice.

Amendment made by Finance Act, 2007 (w.e.f. 11-5-2007)

            Sub-section 1A had been inserted so as to empower the CBEC to constitute committees comprising of -

             (a) Two Commissioners of Central Excise for the purpose of reviewing the order passed by a Commissioner of Central Excise (Appeals); and

             (b) Two Chief Commissioners of Central Excise for the purpose of reviewing the adjudication orders passed by Commissioner Excise (as per new sub-section 1A).

            Similarly in sub-section (2), the word 'Board' was substituted with 'Committee of Chief Commissioners of Central Excise'. Thus, in case of objection to any order passed by Commissioners of Central Excise under section 73 or 83A or 84, Committee of Chief Commissioners (instead of Board) shall give directions to Commissioners of Central Excise to file appeal to Appellate Tribunal against the order passed by Commissioners of Central Excise.

            In sub-section 2A, in case of objection to any order passed by Commissioners of Central Excise (Appeals), Committee of Commissioners of Central Excise instead of Commissioners of Central Excise shall be authorized for the purpose of giving directions to any Central Excise Officer to file appeal to the Appellate Tribunal against the order passed by Commissioners of Central Excise (Appeals) under section 85.

The Finance Act, 2007 has changed the powers to appeal to Appellate Tribunal as follows -

Sub-Section	Prior to11.5. 2007	W.e.f.11.5.2007
1A	—	Committee of two Chief Commissioners of Central Excise or two Commissioners of Central Excise
2	Board	Committee of Chief Commissioners of Central Excise
2A	Commissioners of Central Excise	Committee of Commissioners of Central Excise

Amendment made of Finance Act, 2008 (w.e.f. 10.5.2008)

Finance Act, 2008 has amended sub-section (2) and (2A) by inserting a proviso in each of these sub-sections.

Section 86(2) has been amended to provide that in case the Committee of Chief Commissioners of Central Excise differs in its opinion regarding the legality and propriety of the order of the Commissioner of Central Excise, it shall refer the matter to the Board and Section 86(2A) has been amended to provide that in case of difference of opinion regarding the legality and propriety of the order, it shall refer the matter to Jurisdictional Chief Commissioner.

In sub-section (2), it is provided that in case the Committee of Chief Commissioners of Central Excise differs in its opinion regarding the legality and propriety of the order of the Commissioner of Central Excise, it shall refer the matter to the Board.

In case the Committee of Chief Commissioners of Central Excise differs in its opinion regarding the appeal against the order of the Commissioner of Central Excise, it shall refer the matter to the Board which shall, after considering the facts of the order and the points of difference between them and if it is of the opinion that the order passed by the Commissioner is not legal or proper, direct the Commissioner to appeal to the Appellate Tribunal against the order.

In sub-section (2A), it is provided that in case the Committee of Commissioners differs in its opinion regarding the legality and propriety of the order of the Commissioner (Appeals), it shall refer the matter to the jurisdictional Chief Commissioner.

In case the Committee of Commissioners differs in its opinion regarding the appeal against the order of the Commissioner (Appeals), it shall record the point or points of difference between them and refer the matter to the jurisdictional Chief Commissioner who shall, after considering the facts of the order and if he is of the opinion that the order passed by the Commissioner (Appeals) is not legal or proper, direct the Central Excise Officer to appeal to the Appellate Tribunal against the order of the Commissioner (Appeals). The jurisdictional Chief Commissioner shall be the Chief Commissioner having jurisdiction over the adjudicating authority who has decided the case.

Amendment made of Finance Act, 2009 (w.e.f. 19.8.2009)

In sub-sections (1) and (2), the reference to section (84) has been deleted, consequential upon the substitution of section 84 as Commissioner's revision orders shall no longer be in vogue except in pending cases.

Form of Appeals to Appellate Tribunal (Rule 9)

            1. An appeal under sub-Section (1) of Section 86 of the Act to the Appellate Tribunal shall be made in Form ST-5 in quadruplicate and shall be accompanied by a copy of the order appealed against (one of which shall be a certified copy).

            2. An appeal under sub-Section (2) of Section 86 of the Act to the Appellate Tribunal shall be made in Form ST-7 in quadruplicate shall be accompanied by a copy of the order of the Commissioner of Central Excise (one of which shall be a certified copy) and copy of the order passed by the Central Board of Excise and Customs directing the Commissioner of Central Excise to apply to the Appellate Tribunal.

            2A. An appeal under sub-Section (2A) of Section 86 of the Act to the Appellate Tribunal shall be made in form ST-7 in quadruplicate and shall be accompanied by a copy of the order of the Commissioner of Central Excise (Appeals) (one of which shall be a certified copy) and a copy of the order passed by the Commissioner of Central Excise directing the Assistant Commissioner of Central Excise or as the case may be, the Deputy Commissioner of Central Excise to apply to the Appellate Tribunal; and

            3. A memorandum of cross objections under sub-Section (4) of Section 86 of the Act shall be made in Form ST-6 in quadruplicate.

Hints for filing Form No. ST-5

            (i) Form ST-5 may be filed by an assessee aggrieved by an order passed by Commissioner of Central Excise or an order passed by as Commissioner of Central Excise (Appeals) under Section 85.

            (ii) Appeal should be made in quadruplicate.

            (iii) Four copies of order appealed against must be attached of which one or more should be certified copy.

            (iv) Filing fee is Rs. 200 for appeal filed upto 31st October, 2004 Finance Act, 2004 has enhanced the fees to Rs. 1,000/Rs. 5,000/Rs. 10,000 as applicable w.e.f. 1-11-2004. [See Section 86(6)].

            (v) For appeal under sub-section (6A) prescribed fee is Rs. 500 w.e.f. 1-11-2004.

            (vi) 4 copies of memorandum of cross objections should also be filed.

            (vii) Appeal should be filed within three months of the date on which the order sought to be appealed against is received.

             (viii) The form should be verified in the prescribed manner.

Fees payable for Appellate Tribunal

The Finance Act, 2004 has amended upwards the fees payable for filing an appeal to Appellate Tribunal. Prior to enactment of Finance Act, 2004, section 86(6) prescribed a fee of Rs. 200 to be accompanied alongwith form of appeal to Appellate Tribunal under Section 86. The Finance Act, 2004 amended

Section 86(6) to enhance the fees as under to be effective from a notified date, i.e., 1st November, 2004:

Amount of Service Tax/Interest/Penalty Involved	Prescribed Fee
l Rs. five lakh or less	Rs. 1,000
l More than Rs. five lakh but not exceeding Rs. fifty lakh	Rs. 5,000
l More than Rs. fifty lakh	Rs. 10,000

Notification No. 31/2004-ST, dated 25-10-2004 has notified 1st November, 2004 as the effective date for aforementioned fees. Thus, w.e.f. 1st November, 2004, above fee slabs shall be applicable for filing appeals before Cestat.

Sub-section (6A) provides that every application to Appellate Tribunal for the following purposes should be accompanied by a fee of Rs. 500 —

             (a) in an appeal for grant of stay or for rectification of mistake or for any other purpose.

             (b) for restoration of an appeal or an application.

No fee shall, however, be payable in case of appeal filed by Department or for filing a memorandum of cross objections. Also, it has been clarified that no fee is required to be collected or paid on adjournment or pass over or memorandum under Rule 28B. (Refer CESTAT Public Notice No. 1/2005, dated 11-2-2005)