The Central Board of Excise and Customs (CBEC) has put up a ‘Draft Adjudication Manual’ on its website, for comment from trade and industry, as well as departmental officers. The Manual consolidates all the relevant notifications and instructions/circulars. Some references to relevant case laws are also included and it presents in an organised manner all the relevant information in 56 topics and three lists that give cross-references.
It says that besides ensuring uniformity across the country, these instructions seek to achieve two objectives. One, that the principles of natural justice are fully observed in substance and in form. Two, that an offender does not escape due to technical and/or procedural defects. The introductory part says the authorities exercising a quasi-judicial function are duty-bound to justify their existence and carry credibility by inspiring confidence in the adjudicatory process.
The Manual emphasises the need to follow the principles of natural justice and explains the basic statutory provisions on confiscations, penalties, redemption fines, prosecution, release of seized goods, charging/payment of interest, refunds, etc, in customs, central excise and service tax laws. It clarifies that warnings, being administrative in nature and not appealable, should not be made part of any adjudicating order and final determination of the duty amount has to be done by the person adjudicating the case after receiving a representation; it cannot be left to the investigating officer.
It explains the distinction between confiscation under the Central Excise Rules, and forfeiture by a court under Section 10 of the Central Excise Act. It stresses the need to adhere to the time limits prescribed for adjudication and emphasises that orders must be passed within five days of a personal hearing that can, at best, be extended to 15 days
The Manual’s merit is that all the instructions, references to notifications and gist of relevant case laws have been brought together in a single document. Assesses, legal practitioners and departmental officers would spend less time in updating on the correct provisions, preparing for litigation and assessing the consequences. However, it is doubtful whether the adjudicating authorities would now act fairly and avoid frivolous orders that get thrown out at the Tribunal stage, more often than not.
The problem at the ground level is the mindset of the adjudicating authorities. As one assistant commissioner put it, there is no punishment when a wrong order is passed, so long as it is pro-revenue. While, even a correct order that is not pro-revenue can invite a lot of adverse scrutiny from higher authorities. The intention of the officer concerned is questioned if the order is not pro-revenue. The officers live in apprehension that their career might get affected if they pass orders that are correct but not pro-revenue. So, they play safe and confirm the demands rather than risk their career prospects.
The CBEC must assure the adjudicating authorities that their integrity will not be questioned if they use the power of adjudication with care, free from any prejudice or bias. Winning their confidence is essential for a credible system of adjudication.
email: tncr@sify.com
