Ministry : Ministry of Finance

Department/Board : CBEC Excise

Instruction From File No. : 390/CESTAT/69/2014-JC

Date : 22.12.2015


1. All Principal Chief Commissioners/ Chief Commissioners and Director General under the Central Board of Excise and Customs
2. Chief Commissioner (AR)/ Additional Commissioner (AR)/ Asstt. Commissioner (AR), CESTAT
3. All Principal Commissioners/ Commissioners of Customs, Central Excise & Service Tax/ Directorate of Legal Affairs

Imposition of cost by CESTAT on grounds of quality of adjudication order

During the recent past there have been certain decisions of the CESTAT wherein cost was imposed either on department or on the adjudicating officer/ appellate officers. The cost so imposed was ordered to be paid to the assesse or to the Registry of the Tribunal.

2. On examination of such orders it is found that the cost has been imposed on the officers/ department for ignoring ; (i) the directions and principles laid down made de novo order while Hon'ble Tribunal directing the original adjudicating authority to re-examine the duty liability only , (ii) Principles of natural justice , (iii) the pleadings and evidences on record before deciding the matter or (iv) non-application of mind.

3. There are already provisions for examination of all the order-in- original passed by the Commissioners/ Committee of Commissioners or the Committee of Chief Commissioners. However, it has been experienced that only such orders which are passed in favour of assesses are subjected to rigorous scrutiny and whenever the reviewing authorities are of the considered view that orders were not in conformity with the law, such orders are appealed against whereas the orders passed in favour of Revenue are accepted without any critical examination as to whether such orders are legal and proper. Therefore, there is a need to examine critically the orders passed in favour of the Department also by the same standards. Needless to mention that such orders are avoidable in case the original adjudication orders/ appellate orders are examined critically during review by the competent authorities.

4. In view of alarming increase in the number of such orders, all Principal Chief Commissioners/ Chief Commissioners should sensitize the adjudicating authorities about the issue of imposition of costs by the Tribunals due to poor quality of the adjudications. To address the issue, the Principal Chief Commissioners/ Chief Commissioners (under whose jurisdiction orders imposing costs have been passed by the Tribunal) may kindly send a report after examining such cases of the last two years regarding the feasibility for challenging before the Hon'ble High Court / Supreme Court by way of Writ Petition or Special Leave Petition. A one time report as above may be sent in a months time.

(Rohit Singhal)
Dy. Secretary (Review)