System of review committee of chief commissioners must be given a decent burial

EXPERT EYE

A stunning incident, and the first of its kind, has happened now. The Tribunal, has summoned the Member Administration, Central Board of Excise and Customes (CBEC) to appear before it personally to explain why he could not prevent a huge revenue loss from taking place because of his failure to appoint a review committee of Chief Commissioners. When only one Chief Commissioner of the concerned jurisdiction used to do the review job, no such failure was ever heard of. Now after making the number to three/two, in place of one, the net result is delay, no improvement in quality, no sense of responsibility and loss of revenue. The system has come to great disrepute which one finds from a recent judgement by the Tribunal in the case of CCE vs. Bhushan Ltd [1] decided on July, 14, 2008. Due to malfunctioning, revenue loss of Rs 8.41 crore has taken place in one case alone.

Traditionally, an order passed by Commissioner of Customs and Excise would be reviewed by the concerned Chief Commissioner for deciding if an appeal would be filed before the Tribunal. The new system introduced in the 2005 Budget (Section 35B&E of Excise Act and corresponding Sections in the Customs Act) has created more complications than it has solved. A similar review committee of Commissioners has been established for reviewing orders of Commissioner Appeal which is also as inefficient as its senior counterpart. It is not just a matter of one case. Actually, the system of review committee itself is congenitally defective and conceptually destructive. The reasons:

(a) An affidavit filed by the CBEC shows that there are 10 posts of Chief Commissioners and 48 posts of Commissioners vacant in 2008 and so the review committees could not be constituted[2].At no point of time can one get all vacancies filled up and so it is a perennial problem.

(b)Getting three senior officers at one place to decide an issue is difficult because there are many places such as Lucknow, Shillong and Allahabad where there is only one Chief Commissioner.

(c) If it is a Customs case, there is no reason to assume that another Chief Commissioner dealing with central excise will be a better partner in the decision than the concerned Chief Commissioner himself.

(d) The sense of responsibility is diluted when too many people totally unconcerned with the subject are called to decide the issue. Sharing responsibility is alright when huge rewards are being given to informer so that the scope of misuse or wrong decision is minimized. A Cabinet decision for a political issue is also justified. But not so for review cases which are technical matters where expertise is more important than the number of decision makers.

(e) In the last three years, the quality of decisions has not improved. Almost 80 per cent or even more cases of review before Tribunal are lost by Revenue. I find practically in all cases of Cenvat credit the decisions go against Revenue. I get the impression that once the Superintendent or Appraiser disallows something, everybody follow suit. I read the reported judgements in plenty.

Conclusion: When we were Commissioners and Chief Commissioners, we used to discharge our responsibility of reviewing and we felt responsible for that. If anything went wrong, I was squarely responsible. Now with several other colleagues, nobody feels responsible. That is why things have come to such a passe. The sooner the review committee is given a decent burial the better it will be for quick and quality decisions and safety of revenue.

[1] 2008(227)ELT610 (Tri.-Kolkata)
[2] Para 12 of Judgement at 1.

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