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TMI BlogCESTAT – CONTINUING?X X X X Extracts X X X X X X X X Extracts X X X X ..... CESTAT – CONTINUING? - By: - Mr. M. GOVINDARAJAN - Goods and Services Tax - GST - Dated:- 15-4-2017 - - It is expected that the GST will come into effect from 01.07.2017. Section 109 to 116 of the Central Goods and Services Tax Bill, 2017 (passed by both Lok Sabha and Rajya Sabha and awaiting for the nod of the President of India) provide for the constitution of Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority and also provide the procedures for the functioning of the said Tribunal. The said Tribunal will hear appeals in respect of GST matters that will come into effect from 01.07.2017. At present the appeals against the appellate aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities are made to CESTAT (Customs, Excise Service Tax Appellate Tribunal). The Bill does not provide for the transfer of cases of CESTAT to the new Tribunal as done in the Companies Act, 2013 which transferred the pending cases before Company Law Board to National Company Law Tribunal. As such the CESTAT will function continuously even after the formation of the GST Appellate Tribunal. It was reported in www.thehindubusinessline.com dated 27.03.2017 that the Finance Ministry and the CBEC are likely to put a limitation of five years on all legacy tax disputes in Central Excise and Service Tax. It would be part of the transition guidelines being worked out by the Finance Ministry and the CBEC. CESTAT is also expected to contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue functioning to finalize all such cases. It is likely to continue independently of the GST Appellate Tribunal. As on 01.12.2016, 91635 appeal cases were pending with CESTAT. According to official data, as much as ₹ 93,163 crores of revenue from Central Excise and service tax was under dispute in cases that were pending one year or more at the end of 2015-16. It is hoped that the transition provisions will help deal with such cases swiftly. Apart from tax disputes, the Department also has pending cases relating to adjudications, refunds, rebates, drawback as well as export related schemes. It had increased the adjudicating powers of officials and also hiked the monetary threshold for filing cases. The main question before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us is whether 5 years time is enough for CESTAT to wipe all the appeal pending before it. The pending cases as on the appointed day i.e., 01.07.2017 may be finalized within 5 years time by the CESTAT. The provisions of service tax and excise duty will be applicable till 30.06.2017 i.e., the previous day to the effective date from which GST will come into live. Section 73(1) of Finance Act, 1994 provides that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within thirty months from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. The proviso to the said section provides that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of- fraud; or collusion; or willful mis-statement; or suppression of facts; or contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of service tax, the Central Excise Officer may issue show cause notice within five years from the relevant date. Section 11A(1) of the Central Excise Act, 1944 provides that where any duty of exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty, the Central Excise Officer shall, within 12 [two years] from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. Section 11A (4) of the Central Excise Act, 1944 provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that where any duty of excise has not been levied or paid or has been short levied or short-paid or erroneously refunded, by the reason of- (a) fraud; or (b) collusion; or (c) any willful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty, by any person chargeable with the duty, the Central Excise Officer shall, within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 11AA and a penalty equivalent to the duty specified in the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice. By virtue of the provisions of Section 73(1) of the Finance Act, 1994 and Section 11A of the Central Excise duty, the Central Excise Officer can issue show cause notice to the assessee within thirty months for service tax matters and two years for central excise matters and they can invoke extended period of limitation of five years in case of evasion is by the reason of fraud or collusion or any willful mis statement or suppression of facts. As such the Central Excise Officers can issue show cause notice up to 30.06.2022. Adjudication, appeal before the appellate authority will be there. Against the order of appellate authority the assessee is to file before CESTAT. Therefore CESTAT is to continue even after the five yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs as likely proposed by the Ministry of Finance. Further service tax and central excise duty only are going to be subsumed in GST but not customs duty. The appeals against the Appellate authorities are to be filed before CESTAT for customs matters. Unless otherwise a separate Tribunal is established for customs matters CESTAT is to be continued for ever but the number of benches may be reduced. The Department of Revenue will take a call on the exact working of CESTAT under GST. Officials note that it may be difficult to start out with GST on an absolutely clear slate as many cases are pending with tribunals and higher courts but efforts are on to expedite as many cases as possible. Transitional provisions regarding to CENVAT c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit In respect of the litigations relating to CENVAT credit transitional provisions are incorporated the in the CGST Bill, 2017 . Section 142(6) (a) provides that every proceeding of appeal, review or reference relating to CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary under the provisions of existing law other than Section 11B(2) of Central Excise Act and the amount rejected, if any, shall not be admissible as input credit under this Act. Section 142(6)(b) provides t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, or on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law. If any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under the GST Act and the amount so recovered shall not be admissible as input tax credit under this Act. Section 142(7)(a) provides that every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be disposed of in accordance with the provisions of existing law. If any amount becomes recoverable as result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of duty or tax under this Act and the amount so recovered shall not be admissible as input tax credit under the Act. If any amount found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of Section 11B(2) of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act. Section 142(8) (a) provides that where in purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax and the amount recovered shall not be admissible as input tax credit under this Act. If any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of Section 11B (2) of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as input tax credit under this Act. - Reply By KASTURI SETHI as = Unique article, Sir. Definitely now it will come to the Notice of Board/Govt. of India. Govt. of India should have changed on its own. I fear so many errors in GST Act/Rules which would come to the notice only after 1.7.2017. Dated: 17-4-2017 Reply By Ganeshan Kalyani as = Sales tax matters are still pending. Most of the states have implemented VAT in the yaer 2005 (average) and the sales tax dept is open to adjudicate cases of sales tax regime. But cases are still going on. Similarly in GST the cases under VAT are ought to remain open for decision for decade. In my view if time period of assessment is say 5 years and if the years is elapsed then the case should be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to be completed with whatever evidence is on record. Dated: 25-4-2017 - 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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