Non-adversarial tax regime ahead

The CBEC directed that appeals where the issue has been decided by the Supreme Court should be withdrawn

The Central Board of Excise and Customs (CBEC) has started this year on a positive note. On January 1, the board made its monetary limits for filing appeals applicable to all pending cases. This could result in withdrawal of many cases pending in the courts.

The National Litigation Policy aims to reduce litigation and bring down the average pendency time in courts. The policy nudges the government not to file appeals where the amount involved is less than the monetary limit fixed, if the matter is covered by judgments that have acquired finality, where the assessee has acted in accordance with long-standing practice or due to change of opinion of the jurisdictional officers. So, the CBEC had laid down monetary limits for filing appeals in 2010. The limits were revised in 2011 and 2015. The present limits are Rs 10 lakh for Tribunal, Rs 15 lakh for high courts and Rs 25 lakh for Supreme Court. For cases below these threshold limits, the government will not file appeals and withdraw the appeals filed. However, appeals will be pursued, irrespective of the monetary limits, where the challenge is to the validity any legal provisions or departmental instructions and refunds issues which are of legal and/or recurring nature.

The CBEC has also directed that appeals where the issue has been decided by the Supreme Court should be withdrawn and has rationalised the procedure for taking the decision on withdrawal of appeals. However, where substantial question of law is involved or where the apex court has decided only one of the many issues involved, the appeals will be pursued. The Board has also found, that the Tribunal has imposed costs on the department or on the adjudicating / appellate officers for ignoring its directions and principles laid down while directing the original adjudicating authority to re-examine the duty liability, principles of natural justice, the pleadings and evidences on record before deciding the matter or non-application of mind. So, the Board has directed that all the adjudicating/appellate orders must be critically examined before filing appeals with the Tribunal.

In the conference of chief commissioners, the issue of building pressure on field formations towards the year-end to meet the revenue targets assigned to them was raised. Various methods employed to boost net revenue yields included holding back sanction of refunds/rebate/drawback claims till March 31 and persuading the assessees not to use Cenvat credit and instead pay duty in cash. The whole exercise benefits none; in fact, it offends the taxpayers, and provokes resentment from the trade without securing any real gain to the government.

After due discussions the conference concluded that such coercive collection of revenue in the last quarter does not serve the interest of any stake holder and vitiates the working atmosphere. It was decided in the conference that such coercive practices would be avoided.

So, this year, assessees who are used to routine harassment by the excise department in the name of meeting their revenue targets, can heave a sigh of relief. Luckily, the current times are most opportune, when the revenue growth is good and there may not be any need for such revenue drive.

The recent efforts by the government to reduce litigations and avoid unnecessary harassment enhance the credibility of the finance minister, who has assured a non-adversarial tax regime.
email: tncrajagopalan@gmail.com