TIOL-DDT 2914
22 08 2016
Monday

"no reformatio in peius" means that a person should not be placed in a worse position, as a result of filing an appeal. In a recent judgement, the Madras High Court explained it as a Latin Phrase expressing the principle of procedure, according to which, using the remedy at law, should not aggravate the situation of the one who exercises it.

What provoked the High Court to employ the Latin phrase was an order of the CESTAT which elaborated on how adjudication is to be done, but the Tribunal order itself was far from jurisdictionally and judicially correct.

A citizen who was awarded the punishment of 10 lashes appealed to the mercy of the king. The king ordered five more lashes!

Here is a case where an Additional Commissioner passed a judicious reasoned order whereby he dropped part of the duty demanded in the Show Cause Notice. The aggrieved assessee appealed to the Commissioner (Appeals) who while confirming the order of the Additional Commissioner remanded the case to the Additional Commissioner to reconsider the dropping of the part demand.

The assessee appealed to the Tribunal that the Commissioner (Appeals) acted beyond the scope of the appeal and had no power to remand the matter.

When the assessee has questioned the very jurisdiction of the appellate authority and submitted that he had gone beyond the scope of the appeal, and issued directions, the Tribunal, without adverting to the said ground of challenge, has gone further and elaborated, as to how, the oral and documentary evidence, should be considered, in adjudicating the alleged clandestine removal of raw-materials.

It may be noted that there was no appeal or cross objection by the department at any stage.

The aggrieved assessee approached the High Court. The High Court observed,

In the absence of any appeal filed by the department on the finding, relating to alleged clandestine removal of raw materials, the appellant cannot be put in a worse position, in their own appeal, and in such circumstances, the principle of "no reformatio in peius" would come into play, which means that a person should not be placed in a worse position, as a result of filing an appeal. It is a latin phrase, expressing the principle of procedure, according to which, using the remedy at law, should not aggravate the situation of the one who exercises it.

Had the assessee not filed an appeal, it would not be placed in a situation of inviting an adverse order, on the aspect of clandestine removal. A party who files an appeal, expects that the appellate authority would only address the grounds of appeal, made against the order impugned, and the appellant does not expect the appellate authority to go beyond the scope of appeal, and pass an order, adverse to his interest, in which event, it certainly creates a worse situation for the appellant/assessee, in his own appeal, than the order under challenge.

Instead of addressing the issue, as to whether, the appellate authority had acted beyond the scope of the appeal, and exceeded in his jurisdiction, the Tribunal passed an order, impugned before us, elaborating, as to how, adjudication has to be done, with reference to the aspect of clandestine removal of raw materials, which in our considered opinion, is jurisdictionally erroneous. On the facts and circumstances of the case, we hold that the directions issued by the appellate authority and that of the Tribunal, run contrary to the principle of "no reformatio in peius".

Please see Breaking News for the High Court Story

This is not a lone case where the Tribunal has placed the appellant in a worse situation than what he was in before appealing to the Tribunal. The same Bench of the Tribunal in another recent case, set aside an order of the adjudicating authority favourable to the assessee on an appeal by the assessee. The adjudicating authority allowed re-export of the goods, but imposed redemption fine and penalty. The appeal to the Tribunal was only on redemption fine and penalty.

The Tribunal set aside the order of the adjudicating authority and ordered absolute confiscation.

Absolute confiscation is fine, but the goods had already left the country. How will the Customs now confiscate them? The Tribunal was informed by Revenue that the impugned goods have already left India on payment of redemption fine. To which, the Tribunal passed the following order.

Therefore, it is left to the Chairman of the CBE&C to deal this matter as the Board may consider appropriate in the fitness of the circumstances of the case to protect interest of Revenue since the action of redemption of the goods and re-export has caused detriment to interest of justice.

Now, what is the Chairman supposed to do?

Can the Tribunal order five more lashes on an appeal by the assessee and when there was no appeal by the Revenue?

For more details of the case, please see Breaking News

no reformatio in peius in the Supreme Court

AS there was no appeal by the revenue against this finding of the Commissioner, the Tribunal could not have enhanced the rate at which the appellant would have to pay Anti-dumping duty in the appellant's own appeal. The appellant cannot be worse off by reason of filing an appeal. To this limited extent, the appellant succeeds and the Tribunal's order is set aside. The appellant will have to pay Anti-dumping duty calculated at the rates specified only in Notification No. 81/98 dated 27.10.1998. - para 18 - 2015-TIOL-173-SC-CUS

It is elementary that if a party appeals, he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him. If the other side has any grievance, he has a right to file a cross-appeal or cross-objections. But, if no such thing is done, the other party, in law, is deemed to be satisfied with the decision. He is, of course, entitled to support the judgment of the first officer on any ground open to him, but he is not entitled to raise a ground so as to work adversely to the appellant and in his favour. - 2002-TIOL-704-SC-IT

As the Bombay High Court said in 2010-TIOL-197-HC-MUM-CUS, An appellant cannot be worse off by being in appeal before the Tribunal.

CBEC Makes Additional Charge PCs Powerful

BY Office Order No.79/2016, dated 14.07.2016, CBEC gave additional charge of the post of Chief Commissioner to 9 Principal Commissioners. By Office Order No.86/2016, dated 26.07.2016, CBEC gave additional charge of the post of Chief Commissioner to 4 more Principal Commissioners.

These 13 Principal Commissioners were holding the post of Chief Commissioners, but were they authorized to exercise the powers of Chief Commissioners? I tried to speak to one of them, but he refused to speak to me.

Board suddenly realized that these officers were not invested with the powers of Chief Commissioners and so they were not lawfully holding these posts. So, the Board issued Notification 43/2016-Central Excise (N.T.) on 18.08.2016. The Notification states:

In exercise of the powers conferred by clause (b) of section 2 of the Central Excise Act, 1944 (1 of 1944), read with rule 3 of the Central Excise Rules, 2002, the Central Board of Excise and Customs hereby invests the officers specified in column (1) of the Table below, with the powers of the Central Excise Officer of the rank specified in column (2) of the said Table, in the jurisdiction specified in Notification No. 27/2014-Central Excise, dated the 16th September, 2014 published in the Gazette of India, Extraodinary Part-II, Section 3, Sub-Section(i), vide G.S.R. 651 (E), dated the 16th September, 2014, namely:-

Does this solve the problem? Not really! Now the Principal Commissioners are invested with the powers of Chief Commissioner in the jurisdiction as specified in Notification No. 27/2014-Central Excise, dated the 16th September, 2014. What's wrong with it? The only problem is there is no Notification No. 27/2014-Central Excise, dated the 16th September, 2014. What the Board meant might have been Notification No. 27/2014-Central Excise (NT), dated the 16th September, 2014.

And look at the spelling of Extraodinary. It should have been ExtraoRdinary.

First they create the posts of Principal Chief Commissioner and Chief Commissioner to improve the promotional prospects of their officers. Then they are not able to find enough officers to be promoted to these posts. So, they appoint Principal Commissioners to hold additional charge of these posts. But they forget to invest these officers with the powers of Principal Chief Commissioner and Chief Commissioner. Then they issue a notification for the purpose of this vesting of the powers and there they cite a wrong notification, which will be corrected with a backdate (if they see this DDT). And remember this is a notification which they will place in Parliament!

All this in public interest and in furtherance of the noble cause of collecting revenue for the country!

Notifications have been issued under Customs, Central Excise and Service Tax.

Notification No. 43/2016-Central Excise (N.T.)., Dated: August 18 2016

Notification No. 111/2016-Customs (N.T.)., Dated: August 18 2016

Notification No. 37/2016-Service Tax., Dated: August 18 2016

1481 Vehicles for CBEC Officers - Surat Commissionerate Attached to Vizag Zone

CBEC has sanctioned 1481 vehicles for its officers. They can hire small vehicles at Rs.30,000 a month and SUVs at Rs. 40,000 a month. Every IRS officer will have access to at least one vehicle. A government paid vehicle is a status symbol, at least for the family members of the tax collector.

In the Order allocating the vehicles, CCE, Surat-I, Surat-II, Vadodara-I, Vadodara-II, Silvassa(Vapi) and Daman are shown under Visakhapatnam Central Excise Zone. Will all these vehicles go to Visakhapatnam?

This is how the Board works - they don't know the concerned notification number, they don't have a spellchecker and they don't know where their Commissionerates are. And you think this department will run GST for you!

CBEC F.No.26015/04/2013-Cus(AS)., Dated: August 12 2016

Income Tax - TCS - Cash Sale - Exemption.

AS per Section 206C(1D) of the Income Tax Act,

(1D) Every person, being a seller, who receives any amount in cash as consideration for sale of bullion or jewellery   or any other goods (other than bullion or jewellery) or providing any service, shall, at the time of receipt of such amount in cash, collect from the buyer, a sum equal to one per cent of sale consideration as income-tax, if such consideration,-

(i) for bullion, exceeds two hundred thousand rupees; or

(ii) for jewellery, exceeds five hundred thousand rupees;   or

(iii) for any goods, other than those referred to in clauses (i) and (ii), or any service, exceeds two hundred thousand rupees:

Provided that no tax shall be collected at source under this sub-section on any amount on which tax has been deducted by the payer under Chapter XVII-B.

Now, the CBDT has exempted the following classes of buyers from the operation of the above provision.

(i) Government;

(ii) embassies, Consulates, High Commissions, Legation or Commission and trade representation, of a foreign State;

(iii) institutions notified under United Nations (Privileges and Immunities) Act, 1947.

CBDT Notification No. 75/2016; Dated: August 19 2016

Anti Dumping Duty on Caustic Soda - Extended Just in Time

GOVERNMENT had imposed anti dumping duty on Caustic Soda originating in, or exported from, Thailand, Chinese Taipei and Norway by Notification No. 79/2011, dated 24.08.2011, which is to lapse on 23.08.2016. The Government has now extended it till 22.08.2017 in respect of imports made from Chinese Taipei (Taiwan).

Notification No. 46/2016-Customs (ADD)., Dated: August 19 2016

Anti-dumping duty on 1-Phenyl-3-Methyl-5-Pyrazolone

ANTI Dumping Duty on 1-Phenyl-3-Methyl-5-Pyrazolone, originating in, or exported from, People's Republic of China was imposed by Notification No. 1/2006-Cus dated 10.01.2006 and would have expired on 09.01.2011. Long before its expiry, on 27.10.2010, the validity of the notification was extended till 30.06.2011. The Government again imposed anti dumping duty on this product, for a period of five years from 24.08.2011, which would expire on 23.08.2016. Now the government has extended it till 23.08.2017

Notification No. 47/2016-Customs (ADD)., Dated: August 19 2016

Much Obliged

IT is a practice in Indian Courts for the lawyers to say, "Much obliged, your lordships" after a judgement/order/direction is given by the court. Commenting on this in the National Judicial Academy, Justice Goda Raghuram said, "why does he say this phrase, 'deeply obliged', why should he be obliged of anything; judges are delivering the judgment according to their perception of law and are getting paid for the same."

Until Tomorrow with more DDT

Have a nice day.

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