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TMI BlogADJUDICATING AUTHORITY CANNOT REVIEW ITS OWN ORDER.X X X X Extracts X X X X X X X X Extracts X X X X ..... ADJUDICATING AUTHORITY CANNOT REVIEW ITS OWN ORDER. - By: - Mr. M. GOVINDARAJAN - Customs - Import - Export - SEZ - Dated:- 7-10-2011 - - In case of short levy, short payment, non levy or non collection of tax/duty will attract action by the Department. Show cause notice will be issued by the authority to show cause with directions to give reply within the stipulated date. The assessee is give reply to the show cause notice and to inform the authority whether he is wanted to be heard in person. The Adjudicating authority on receipt of reply from the assessee and giving reasonable opportunity to the assessee will adjudicate the matter. If the assessee is aggrieved by the order of Adjudicating authority he can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file appeal before the first appellate authority. In this article the point to be discussed is whether the Adjudicating Authority can review its own order with reference to decided case law. In Commissioner of Customs V. Millat Fibres 2011 (2710 ELT 512 (Guj) the assessee was holding a licence of 100% EOU. A show cause notice was issued against him alleging the illicit clearance of imported polyester filament yarn. The same was adjudicated by the Adjudicating Authority and a demand of customs duty amounting to Rs.5,34,695/- was confirmed on 30.10.2003. The assessee filed appeal against this order before the Commissioner (Appeals). The Commissioner (Appeals) held that the Adjudicating authority had no j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction to confirm such a demand and set aside only that part of the order. He confirmed the order of confiscation under Section 111 of the Act and redemption fine under Section 125(1) of the Act. Since the assessee already deposited the amount it made an application for refund. The order of Commissioner (Appeals) has not been challenged by any party to the litigation. The refund to the tune of Rs.2,92,585/- was rejected and Rs.2,42,110/- was sanctioned. The said refund amount was appropriated against the pending dues. Later on the Adjudicating Authority noticed that the doctrine of unjust enrichment was not verified before sanctioning the refund and issued a show cause notice dated 7.6.2005 to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee as to why the refund which was sanctioned and erroneously refunded by appropriating the same against Government dues should not be rejected and the appropriated amount should not be recovered under Section 28 read with Section 72 of the Act in the absence of any proof of incidence of duty not being passed on. The said show cause notice was adjudicated on 15.2.2006. The assessee filed appeal before Commissioner (Appeals). The Commissioner (Appeals) held that before going into the point of unjust enrichment, it would be pertinent to examine whether the Adjudicating Authority was legally right in issuing a show cause notice for verifying the doctrine of unjust enrichment for refund which was already sanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned and appropriated against pending Government dues of the appellant, though this ground has not been raised by the appellant in their appeal memorandum. The Adjudicating Authority has mentioned in page 2 of his order that it was later on noticed at the time of sanctioning refund claim the doctrine of unjust enrichment was not verified and accordingly a show cause notice was issued. The Commissioner (Appeals) held that this would amount to review of his own order which is not tenable. The proper course of action for the Department was to review the order under Section 129D (2) of the Act and thereafter file an appeal under Section 129D (4) of the Act. The Commissioner (Appeals) set aside the impugned order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Department filed an appeal before CESTAT against the order of Commissioner (Appeals). The Tribunal found that it has not been shown that any appeal has been filed against the earlier of order of the Commissioner (Appeals) based on which refund has been sanctioned. The Original Authority having sanctioned refund in pursuance of Commissioner (Appeals) s order cannot show cause notice to recover the refunded amount. This will amount to exercise of review powers by the original authority. The Tribunal held that the reasoning adopted by the Commissioner (Appeals) in allowing the appeal of the party is legal and proper. There is no ground for interfering with the said order. The Department filed appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al against the order of CESTAT before the High Court proposing the following substantial questions of law: Whether, in the facts and circumstances of the case, the Tribunal is justified in rejecting the appeal of the Revenue and confirming the order of the adjudicating authority on the ground that exercise of powers under Section 28 of the Customs Act, 1962 cannot be restored for recovering the amount of Customs duty erroneously refunded? Whether, in the facts and circumstances of the case, the Tribunal is justified in confirming the order of the Commissioner (Appeals), inter alia, holding that examination of the issue in case of erroneously refunded duty amount under Section 28 of the Customs Act, 1962 on the Doctrine of Unju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Enrichment would amount to review of order of the adjudicating authority sanctioning the refund? Whether, in the facts and circumstances of the case, the Tribunal is justified in confirming the order of the Commissioner (Appeals) who allowed the appeal of the respondent on the ground not urged in the memo or the appeal by him? The Department put forth the following submission before the High Court: Under Section 28 of the Act where any duty has been erroneously refunded, it is permissible for the adjudicating authority to serve notice requiring the concerned person to show cause as to why he should not pay the amount specified in the notice; While making the order dated 22.02.2005, the aspect of unjust enrichment had not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en considered, hence the refund made pursuant to the said order could be said to have been erroneously refunded so as to bring the same within the ambit of Section 28 of the Act; The High Court observed that the record of the case indicates that vide order dated 22.2.2005 the adjudicating authority had adjudicated on the claim of refund made by the respondents. At the relevant time it was permissible for the adjudicating authority to go into all issues which were necessary to be looked into the purpose of deciding the application for refund, including the aspect of unjust enrichment. He did not do so and later on issued show cause notice for recovery of the amount refunded which was appropriated against his Government dues. The Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court held that Section 129D(2) of Customs Act empowers the Commissioner of Customs to call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under the Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and to direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner in his order. Section 129D(4) provides for preferring an appeal against the order of the concerned authority. If the adjudicating authority is of the view that the doctrine of unjust enrichment had not been examined while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making the order of refund the proper course to adopt was to take recourse to the provisions of Section 129D . The Adjudicating Authority has no power or authority under the Act to reconsider or review or sit in appeal over its earlier order. No such power or authority has been pointed out by the Department. The High Court confirmed the order of the Commissioner (Appeals) as well as the order of the Tribunal. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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