Anti-business mindset grips revenue deptt

EXPERT EYE

The tendency on the part of the revenue department to deny refund to the importers, exporters, manufactures and traders has always been there but now it has become a wave.

Revenue is practically unwilling to accept anything where a pro-business order is passed. A shocking case has come to light from a very recent judgment of the Supreme Court in the case of Commissioner of Central Excise vs R Silicones Ltd, reported in 2004(174) ELT 3 (SC).

In this case, a classification list was filed for goods, which were claimed to be not silicone oil in primary form. The classification was approved in 1988, but a chemical test done in the laboratory of the department reported that the goods are silicone oil in primary form.

Another test was done by the same deputy chief chemist after one year and now the same laboratory has reported that the first test report was incorrect and the goods were in fact not silicone oil which means that the manufacturer's declaration was correct.

The department went to the chief chemist, who is the highest authority on chemical tests. The chief chemist not only tested the goods once again but even took the initiative of visiting the factory to ascertain the manner of production. He came to the conclusion that the goods were as declared by the manufacturer, that is to say, they were not silicone oil in primary form.

The commissioner completely ignored the chief chemist's report and stuck to the first report which was against the manufacturer. The tribunal set aside the order of the commissioner.

But the Central Board of Excise and Customs (CBEC) decided to go to the Supreme Court. The Supreme Court decided that the two subsequent chemical reports of the laboratory could not be ignored.

This is a case that takes the cake for non-application of mind and a determined effort to deliberately harass the manufacturer.

What has been ignored by the entire department of revenue right from the commissioner to the CBEC and even by the senior law officers of the Union ministries of finance and of law, is that there are two test reports subsequent to the first report ""and the last one submitted by the chief chemists "" and they have all been ignored in preference to the first test report.

The normal practice in the collectorates for decades has been that if there are two test reports, even by the same level officers, the subsequent one is taken into account. This is the whole idea of a re-test.

Ignoring the subsequent report and even that of the chief chemist's just because it goes in favour of the importer shows the mindset of the revenue department: it just does not want any pro-business decision. This is most unfair, to say the least.

It is not an isolated case. Several examples have been given in a detailed article in a recent magazine published in 2005 (181)ELT295(SC) at p. A169. It is no wonder that by far the largest majority of the cases filed on appeal before the Supreme Court and the tribunal are rejected.

In this context, the latest proposal in the Budget 2005-06 for transferring the power of review from the CBEC to a committee of two chief commissioners is most ill-conceived. If the performance of higher authority is such, how will the junior ones do better? This is nothing but an attempt at abdication of responsibility.

smukher2000@yahoo.com