Prospective Implementation of Quasi-judicial orders in recurring issues relating to assessment - Central Excise - STANDING ORDER NO. 02/2013

आयुक्त कार्याल्य , सीमा एंव केन्द्रीय उत्पाद शुल्क , सेन्ट्रल एकसाईज भवन रेस कोर्स रिंग रोड राजकोट ३६० ००१ F. No. IV/08-08/MP/2013-14 Dated. 12.12.2013 STANDING ORDER NO. 02/2013 Sub: Prospective Implementation of Quasi-judicial orders in recurring issues relating to assessment - regarding The issue of prospective implementation of quasi-judicial orders with recurring implications has been the subject of recent discussion. In this connection, Board had issued a Circular No. 824/ 1/2006-CX.6 dated 16.01.2006 and the subject is also discussed in Chapter 13, Part Ill of the Central Excise Manual of Supplementary Instructions issued in terms of Rule 31 of the Central Excise Rules, 2002. 2. After carefully perusing the instructions, it is hereby directed that all quasi-judicial orders laying down principles of Classification, Valuation and Cenvat Credit having recurring implications and decided by the adjudicating authority after following the due principles of natural justice must be implemented prospectively even though the party may go in appeal, provided there is no stay on the operation of the order. In important cases of assessment with recurring implication, the issue may be decided by Commissioners irrespective of monetary limits as laid down in Section 12E of the Central Excise Act, 1944, made applicable' to Service Tax. The field formations must make a distinction between stay on recovery of arrears and stay on the operation of the order and not mix up the two. The Board's instructions directing that no coercive action should be taken during the period of the first appeal refers only to the recovery of the arrears and does not bar prospective implementation of the order. This principle of prospective implementation of quasi-judicial orders will hold irrespective of whether the quasi-judicial order upholds the department's stand or the assessee's position. 3. At present the Central Excise Rules do not make any provision for payment of duty under protest. However, Para 3.2, Part III, Chapter 13 of the Central Excise Manual of Supplementary Instructions issued in terms of Rule 31 of the Central Excise Rules, 2002 lays down the procedure to be followed in case the assessee wants to pay duty under protest. The relevant portions of the same are reproduced below: (i) The assessee shall inform the Superintendent or Inspector of Central Excise in writing giving reasons for paying duty under protest and a dated acknowledgement will be given to him. (ii) He will mark invoices or monthly/ quarterly return indicating the goods on which duty is paid 'under protest'. If it is a lump-sum duty payment in respect of past demand, he may record the fact of duty payment under protest in the Personal Ledger Account (against debits) CENVAT Account (against debits) and the Daily Stock Account. (iii) If I a case is appealed against by the assessee or where the appeal period for further appeal is available, he may continue to pay duty under protest. However, if decision is not in his favour and he exhausts the appellate remedy or does not appeal within stipulated period, the assessee shall not have any right to pay duty under protest . 4. In case the assessee feels he has a strong case, the amount paid under protest may be kept in the receivables account (not passed on to the customers) so as to keep alive his / refund claim without attracting the mischief of unjust enrichment in the eventuality of his winning the case in appeal. 5. Field formations may strictly follow the above instructions. (V. Padmanabhan) Commissioner