ROLE AND WORKING OF CESTAT IN INDIA

INTRODUCTION

India has a robust tax structure that encompasses various aspects, including customs, excise, and
service tax. To ensure fair and efficient administration of tax-related disputes, the government
has established specialized bodies, one of which is the Customs, Excise, and Service Tax
Appellate Tribunal (CESTAT). In this blog, we will delve into the significance, functioning, and
role of CESTAT in India's taxation system. The Customs Excise and Service Tax Appellate
Tribunal (CESTAT) were constituted originally as Customs, Excise & Gold (Control) Appellate
Tribunal (CEGAT) on October 11, 1982 under section 129 of the Customs Act, 1962. It was
renamed CESTAT on 14 May 2003. Although it has been created under the Customs Act, it is
mandated to decide appeals under the four Acts namely, Customs Act, 1962, Central Excise Act,
1944, Finance Act, 1994, Customs Tariff Act, 1975. However, tribunal may, in its discretion,
refuse to admit an appeal in respect of an order where the amount of fine or penalty determined
by such order, does not exceeds Two Lakhs rupees. The work of the Tribunal has been
distributed among 6 Special benches located at Delhi & other Regional Benches located at
Mumbai, Kolkata, Bangalore , Chennai and Ahmedabad.

ROLES AND FUNCTIONS OF CESTAT

The primary role of CESTAT is to ensure fair and impartial adjudication of tax disputes. Its
functions include:

a. Hearing Appeals: CESTAT hears and decides appeals filed against orders issued by the
lower authorities in customs, excise, and service tax matters.

b. Disposal of Cases: The tribunal disposes of cases by examining evidence, analyzing legal
provisions, and passing appropriate orders.

c. Legal Precedents: CESTAT's decisions set precedents and provide guidance for future cases,
thus contributing to the development of tax jurisprudence.

d. Harmonization: The tribunal plays a crucial role in harmonizing the interpretation and
implementation of tax laws across different regions of India.
CESTAT plays a significant role in reducing the burden on higher courts. By providing an
effective alternative for taxpayers to seek redressal, the tribunal helps alleviate the backlog of
cases in higher courts. This enables faster resolution of tax disputes and enhances the overall
efficiency of the taxation system.

STRUCTURE AND COMPOSITION

CESTAT consists of a chairperson and a sufficient number of judicial and technical members
appointed by the Central Government. The chairperson and members are required to possess
adequate qualifications and experience in matters related to customs, excise, and service tax. The
tribunal is organized into benches, with each bench comprising at least one judicial member and
one technical member. The tribunal has its principal bench in New Delhi and multiple regional
benches across the country. It has the authority to hear appeals against the decisions of various
tax authorities, including the Commissioner of Customs, Commissioner of Central Excise, and
Commissioner of Service Tax. These benches have the authority to hear appeals and pass
judgments based on the merits of each case.

CESTAT has established specialized benches to cater to specific types of cases. These include:

a. Regular Bench: Deals with routine appeals and cases related to customs, excise, and service
tax.

b. Larger Bench: Comprises three or more members and deals with complex and significant
legal issues, providing authoritative decisions.

c. Pre-Deposit Bench: Considers applications seeking exemption from the requirement of pre-
depositing a percentage of the disputed tax amount as a prerequisite for hearing an appeal.

d. Division Bench: Each division bench shall comprise one judicial member and one Technical
member. In case of difference of opinion, the matter is referred to the President to refer to a third
member to decide on the points of difference.

e. Single Member Bench: The President or any member may sitting singly, dispose of matters
where the value of the goods confiscated absolutely or the duty in dispute (where the
classification and valuation is not one of the points of dispute) or the amount of fine or penalty
does not exceed Rupees Fifty Lakhs.

f. Anti- Dumping Bench:

Under section 9C of the Customs Tariff Act, 1975, an appeal against the order of determination
or review under Section 9A shall lie to CESTAT in respect of the existence, degree and effect of
-
(i) Any subsidy or dumping in relation to import of any article; or
(ii) Import of any article into India in such increased quantities and under such condition so as to
cause or threatening to cause serious injury to domestic industry requiring imposition of
safeguard duty in relation to import of that article.
The Antidumping Bench is a special bench constituted by the President which consists of the
President of the Tribunal and not less than two members and shall include one judicial member
and one Technical member.

TYPES OF MEMBERS

The members are appointed for 5 years. The period can be extended by 5 years, however
retirement age is 65.

Judicial Member shall be a person who has held judicial office for 10 years in India, has been a
member of Indian Legal Service and has held grade I or higher for at least three years and has
been advocate for at least 10 years.

A technical member shall be a person who has held post of Commissioner of Customs or Central
Excise or higher post for at least three years and should have attained the age of 45 years.

JURISDICTION AND POWERS

CESTAT exercises jurisdiction over the entire territory of India and has multiple benches
situated in various cities across the country. The tribunal has the authority to hear appeals against
orders passed by lower adjudicating authorities, including the Commissioner of Customs,
Commissioner of Central Excise, and Commissioner of Service Tax.
CESTAT possesses wide-ranging powers in carrying out its functions. It can summon and
enforce the attendance of witnesses, examine them under oath, and compel the production of
documents or other evidence. The tribunal has the same powers as those vested in a civil court
under the Code of Civil Procedure, 1908, while trying a suit in matters such as discovery and
inspection, enforcing the attendance of witnesses, and issuing commissions for examination of
witnesses or documents.

PROCEDURE FOR APPEAL TO CESTAT

Filling of Appeal Sec 35B(1) of CEA [Parallel Sec 129A(1) of Customs Act and Sec 86(1) of
Finance Act, 1994] provided that person aggrieved by ,

1. Decision or order of Principal Commissioner/ Commissioner of Central Excise as adjudicating

authority.

2. Order of commissioner (Appeals).

Parties to an Appeal

• Assessee.

• Revenue authority (Department).

Appeal can be filed only against decision or order. No appeal can be filed against the trade notice
as the same is not an order. No appeal in respect of duty drawback, baggage, rebate on export
etc, if order is by commissioner (Appeal). NO Appeal against executive orders. Executive orders
passed by excise authorities are not appealable under Central Excise Act.

Appeal to tribunal shall be made in Form no.E.A-3/CA3/ST-5 in quadruplicate with copy of

order appealed against. The memorandum of cross objection should be filed in Form no. E.A.-
4/CA-4/ST-6 in quadruplicate within 45 days of receiving of notice of such appeal. Departmental
appeal should be filed in Form no.E.A-5 /CA-5/ST-7 in quadruplicate accompanied with copy of
order appealed against and a copy of the order passed by the Board directing such Commissioner
to apply to the Appellate Tribunal.
The time limit for filing an appeal is 3 Months from the date of service of Order in Original
(OIO)/ OIA(Order in Appeal) for the Assessee. For the Department it is 4 Months from the date
of service of Order in Original (OIO)/ OIA(Order in Appeal).

The appeal is to be filed within the jurisdiction of CESTAT bench where the factory is situated
or where its head office, or registered office or place of residence is situated irrespective of the
place where the authority which has passed the order is situated.

After filing of an appeal tribunal on its own can call for any document or examine any witness or
ask for filing of affidavit. Additional evidence can also be permitted, after recording the reasons
in writing, if adjudicating authority had not given sufficient opportunity to party to produce the
evidence. Tribunal will scrutinize the appeal and any defects found are informed to the party
concerned for removal of defects. Both the parties have an opportunity to be heard by the
tribunal.

ORDER OF TRIBUNAL

Section 35C(1) of CEA [parallel section 129B(1) of Customs Act] [Service Tax 86(7)] provides
that Tribunal can pass such order as it thinks fit Confirming, Modifying or Annulling the
decision or order appealed against. Or Refer it back to the authority which passed such order
with such directions as it may think fit. Order must be signed and dated by members constituting
the bench. The order must be communicated to appellant and respondent.

CASE LAWS UNDER CESTAT

1. Fairline Worldwide Express Vs. CCE 48 GST 805 (Mad)

Tribunal has no power to review its orders. However as per Sec 86(7) of Finance
Act ,1994 tribunal may rectify the order within 6 months. Mistakes apparent from records
can be rectified. The purpose of “Rectification of Mistake” is based on the fundamental
principle that no party, be it assessee or department should suffer on account of any
mistake committed by the Tribunal.
2. Reckitt & Colman of India Ltd 88 ELT 641 (SC)
Tribunal cannot make a new case. Tribunal cannot pass an order on the basis which was
never canvassed by the revenue and which the assessee was never required to meet.
 Order of CESTAT should be complete with reasons. Tribunal shall announce operative
part of the order first and the reasons are given later. However the same need to be passed
in single order only.
3. CCE Vs. BOC India 212 ELT 222 (CESTAT)
It was held in CIT vs. Raison Industries Ltd 7STR 497 (SC) that Decision of Tribunal is
binding on the lower authority. However, if the SC admits appeal against a decision of
Tribunal its finality and correctness is in jeopardy.
4. CIT Vs S Nelliappan 66 ITR 722 (SC)
The appellant shall not, except by leave of the Tribunal, urge or be heard in support of
any grounds not set forth in the memorandum of appeal, but the Tribunal, in deciding the
appeal, shall not be confined to the grounds set forth in the memorandum of appeal or
those taken by leave of the Tribunal.

CONCLUSION

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in India plays a crucial
role in ensuring fair and efficient resolution of tax-related disputes. By providing an independent
and specialized forum for appeals, CESTAT contributes to the overall transparency and
effectiveness of India's tax administration. Its decisions serve as important precedents and help in
maintaining consistency and uniformity in the interpretation and implementation of tax laws
across the country.