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CIR NO. 935/25/2010-CX, DT. 21/09/2010

Measures to streamline the processing of departmental litigation before the Courts and Tribunal

It has been the constant endeavor of the Board to streamline the procedures relating to processing of departmental litigation before the Supreme Court, High Courts and CESTAT. Several circulars/ instructions have been issued by the Board, in the past, in this regard prescribing the procedure to be followed and precautions to be taken by the field formations. However, it has been observed that more than 50% of the proposals received by the Board suffer from infirmities including delays beyond limitation period. It has to be appreciated that the Courts take serious note of such procedural infirmities and considerable effort, resource and time go into rectifying them. Further, Courts do not condone delays unless there is adequate justification for the same. The Board has taken a serious note of the matter and it has been decided to fasten accountability wherever SLP/Civil Appeal Proposal is received by the Board without observance of due procedure or with infirmities or later than the prescribed time frame. The field formations are therefore directed to scrupulously follow the instructions contained in this circular. Needless to say that any deviation, without plausible explanation, would be viewed seriously.

2. Delay in receipt of proposals in the Board’s office:

2.1 One major cause of concern is delay in receipt of proposals in the Board’s office. The reason often cited in most of such cases is either non-receipt or delay in receipt of the CESTAT and High Court orders by the Commissionerates. Such delays are avoidable if proper initiatives are taken at local level. Accordingly, the Board desires that following steps be taken on priority,-

(i) Zonal Chief Commissioners to issue necessary instruction and to ensure that an institutional mechanism is put in place for receipt of copy of order and other communications from the CDR or Jt. CDR, in respect of CESTAT cases.

(ii) Zonal Chief Commissioner having nodal Commissionerate, assigned coordination work relating to High Court, will ensure putting in place a proper institutional mechanism for timely dissemination of certified copy of High Court’s order to respective Commissionerates. The Legal Cell in the Commissionerates will also develop a system for timely receipt of High Court’s orders.

(iii) As certified copy of order is essential for filing Special Leave Petition under Article 136 of the Constitution, the Departmental Counsel may be advised to invariably file an application for obtaining a certified copy on the date of pronouncement of the High Court order or on the following day to avoid delay on this count. Where Government Counsel does not apply for certified copy in the prescribed time-period, his or her fees are required to be subjected to deduction. Repeated instances by a particular counsel may be taken note of while assessing the performance of the counsel in the periodical review exercise.

2.2 It has also been observed that some of the Commissionerates are getting draft SLP prepared at their end and sending the same to the Board along with their proposal. While such effort indicates sincerity for defending cases, it has to be realized that drafting such SLP/CA not only contributes to unnecessary delay but is also a futile exercise as the Central Agency Section of the Ministry of Law does not accept such drafted SLPs / CAs. Central Agency invariably gets the SLP drafted from Drafting Counsels. Therefore this practice of sending draft SLP/CA should be strictly discontinued with henceforth.

2.3. Similarly, the Commissionerates need not take the legal opinion from the Standing Counsels in respect of the High Court’s orders for forwarding proposal to file appeal as the SLPs against the High Court’s orders are filed by the Board only after obtaining the legal opinion from the Ministry of Law & Justice and Ld. Law officers of the Government of India.

2.4. The CA proposals should be sent so as to be received in the Boards office within fifteen days from the receipt of the Order of the Tribunal and SLP proposal are received within twenty days from the date of the order of the High Court. The proposal against the High court’s order shall be initiated on the strength of the copy of the order circulated by the Court on its own motion or copy downloaded from the website of the Court i.e www.indiancourts.nic.in or www.courtnic.nic.in without waiting for the certified copy of the order. The certified copy of the order may be sent separately thereafter. It may be noted that in case of CA the period of limitation of 60 days begins from the date of receipt of order. However in case of SLP period of limitation of 90 days begins from the date of order of the High Court.

2.5. All proposals must be sent by the field formations within the prescribed time limits. In case of delay, detailed justification should be furnished and corrective action should be initiated immediately, so that such delays do not occur in future. Delays on flimsy grounds would be viewed seriously.

3. Quality of proposals:

3.1 Quality of proposals sent by Commissionerates is extremely important for preparation of Civil Appeal/SLP. However, it has been observed that proposal lack quality in so far as content is concerned. Therefore, in order to improve the quality of proposals it has been decided to take the following measures,-

(i) All CA and SLP proposals would henceforth be approved by the Jurisdictional Chief Commissioner. While forwarding the proposal a mention must be made in the covering letter to this effect.

(ii) All such orders which are against revenue but found acceptable by the Commissioner will be put up to the jurisdictional Chief Commissioner for his concurrence.

(iii) The office of the Chief / Joint Chief Departmental Representative will also examine carefully every judgment which is against revenue and forward their opinion to the concerned Commissionerate if it is felt that an appeal is merited in the matter. The Commissioners, however, need not wait for such comments and the same can be sent even after sending the proposal to the Board, in continuation of the earlier letter forwarding the proposal. The Board, vide its letter F. No. 390/Misc/411/07- JC dated 6th February 2008 had laid down the elaborate mechanism for examination of orders in the CDR/Jt CDR office.

(iv) To ensure in-depth analysis and for preparation of comprehensive proposals the Commissioner shall ensure that legal journals such as ELT, RLT etc and software or online services such as Jurix, Manupatra, SCC Online, EXCUS, Lawcrux, Taxindiaonline etc. and reference books, law lexicons are available to the sections/officers dealing with SLP/CA. The Chief Commissioners should ensure availability of such books and online journals in the Commissionerates.

4. Documentation required with proposals:

4.1 Another significant aspect that has been found lacking in the proposals is documentation. Often complete sets of documents are either not enclosed or not found legible. The List of documents that are required to be enclosed in SLP/CA proposals is enumerated in Annexure-I. The following measures shall be taken in this context,-

(i) With every proposal a certificate signed by Commissioner would be enclosed certifying that all relevant documents have been enclosed and that all documents are legible. In case any document is not furnished in the original proposal, the reason thereof would be furnished and such documents shall be furnished as soon as possible.

(ii) The technical literature, court orders, judgments, copies of written submissions as well as material including technical literature which had been furnished to the Tribunal by the assessee at the time of oral submissions may be required for preparation of appeal proposal by the Department. The Joint Chief Departmental Representatives shall ensure that the documents stated above are preserved and sent to the Commissioner concerned immediately after the pronouncement of the order so that the said documents can be made a part of the Paper Book in case it is decided to agitate the matter before the Supreme Court. In case the documents have not been received by the Commissioner at the time of sending the CA proposal to the Board, the same should be procured by the Commissioners from DR’s office and send to the Board as soon as possible.

5. Other measures to improve the processing of litigations:

5.1 Grading of cases pending before the Courts is very important for effective monitoring by supervisory officers and, therefore, the Chief Commissioners are advised to devise an appropriate mechanism to prioritize important cases and classify them in various categories such as cases involving challenge of constitutional validity of provisions of Act / Rules / Notifications/ Circulars as Grade-I cases involving revenue of more than 1 crore as Grade-II cases and so on.

5.2 The Directorate of Legal Affairs has been providing assistance and liaising between the field officers and the Central Agency Section of the Law Ministry including the Law Officers and Counsels. It has been felt that field formations are not fully aware of functioning of the Directorate of Legal Affairs, even though it is discharging important functions. Therefore, details of its functioning and its role in dissemination of information, revenue’s response in parties’ appeals and curing of defects of Revenue appeals is placed (Annexure VI).

5.3 Directorate of Legal Affairs has taken several initiatives to make the details of ongoing cases in various courts available on the Internet. Considerable progress has been made towards the dissemination of information about various lists on the Court’s as well as CBEC websites. A brief on the measures adopted for facilitating monitoring of the cases is enclosed as Annexure VII. Most of the information related to listing of cases is available on the CBEC web site as well as on www.courtnic.nic.in . Officers in the field are expected to monitor cases pertaining to their Commissionerates with the help of the information available on these sites. The field officers can now find online the stage of the case, come forward to assist in proper representation of the case and provide timely response in the event of queries made.

5.4 The Directorate of Legal Affairs will also compile and circulate a list of cases where appeals/ review petitions are not pursued in Supreme Court where amounts are very low or where appeals are dismissed only on grounds of delay or amount being small. Similar database may be maintained at Commissionerate level in respect of orders of High Court / CESTAT /Commissioner (Appeals) accepted on account of limitation or low amount.

6. Dissemination of information regarding cases which are in favour of revenue: In the event it is observed that pro-revenue decisions have not been published / uploaded in the publications or web-sites like ELT/ STR / RLT / www.taxindiaonline.com , copies may be sent for publication in these journals/ website.

7. Committee on Disputes (COD) matters

7.1 In matters of COD, the instructions issued by the Cabinet Secretariat have been circulated by the Board from time to time. However, it is seen that delayed proposals, incomplete or illegible documents and pages not having been numbered, are being received and commented upon by the Committee on Disputes. The enclosures should be legible and all the documents should be page numbered for ease of reference. Also, all the relevant orders should be enclosed. Further, it is once again reiterated that proposals having revenue implication of 5 lakhs and below need not be sent for approval by the High Powered Committee.

8. The above instructions in brief enumerate the steps/measures being taken or to be taken to improve the mechanism of litigation. The comprehensive instructions in details are contained in Annexures as per details mentioned in para 9 below. Further these instructions cast certain responsibilities on Chief Commissioners, Commissioners and CDR office. Therefore, to ensure compliance of these instructions, a one time report on the points mentioned in Annexure VIII will be furnished by all Zonal Chief Commissioners and CDR by 31st December 2010.

9. In order to reduce departmental litigation, Board has decided to fix monetary limits below which appeals shall not be filed before the Tribunal and Courts. Separate instruction in this regard is being issued.

10. The details of Annexures:

Annexure-I

Instruction as regards litigation before the Supreme Court

Annexure I

Litigation before the Supreme Court

Appeal Provisions

(a) Against the order of the High Court appeal can be made to the Supreme Court by way of Civil Appeal u/s 35L(a) of the Central Excise Act, 1944 or u/s 130E(a) of the Customs Act, 1962 or Special Leave Petition under article 136 of the Constitution.

(b) Civil Appeal against any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of Customs / Central Excise or Service Tax or to the value of goods/services for purposes of assessment, appeal can be filed in the Supreme Court u/s 35L(b) of the Central Excise Act, 1944 or u/s 130E(b) of the Customs Act, 1962.

Limitation for filing Civil Appeal/ Special Leave Petition

(c) The limitation prescribed under the Supreme Court Rules, 1966 for filing Civil Appeal before the Supreme Court against the order of Tribunal is 60 days from the date of receipt of the order.

(d) In a case where the High court on its own motion or on an oral application made by the party aggrieved, immediately after passing of the judgment, certifies the case to be fit for appeal to the Supreme Court, a Civil Appeal is filed against the High Court order under Sec. 35L of the Act for which limitation is 60 days from the date of the order (and not the date of receipt of order). However, in most of the cases no such application is made by the aggrieved party before the High court and therefore in such cases, if aggrieved party intends to agitate the order / judgment of the High Court before the Supreme Court, then it can be done by way of filing a Special Leave Petition under Article 136 of the Constitution of India. The limitation for filing of SLP is 90 days from the date of the High Court’s order. The time taken by the Court from the date of filing of application for certified copy of the order till the copy is ready for delivery is excluded from the computation of the period of limitation.

(e) It is noticed that many a time the orders / directions given by the CESTAT are not received at all or received late in the Commissionerates. To strengthen the departmental mechanism for obtaining copies of the orders passed by the Tribunal, the Board has decided that JCDR/SDR would directly communicate the orders in important matters to the Commissioners after its pronouncement. For proper co-ordination, the CDR/Jt CDR will hold regular interaction meetings with the Chief Commissioners. The Chief Commissioners would work out a mechanism for making available one officer (for a period of about three months by rotation) for collection of the orders passed by the Tribunal in respect of their Zones.

(f) The delay in applying for the certified copy of the order is attributed on the part of the party. Therefore, the procedure for obtaining the certified copy of the order of High Court should be initiated immediately on pronouncement of the order, preferably the date of pronouncement or a day after. It shall be impressed upon the Standing Counsels appointed by the Board for handling the case of indirect taxation before the High Courts that it is their responsibility to apply for the certified copy of the order in time and to ensure that it is sent to the department immediately. The officers of Legal Cell set up in the Commissionerate located where the seat of the High court functions should ensure that the certified copy of order is procured in time.

Forwarding of proposal to file Civil Appeal / SLP by the Commissionerate to the Board

(g) In order to improve upon the quality of proposals and also the time limit prescribed and the documentation, Board has decided to involve Chief Commissioners in the process of litigation before the High Courts and Supreme Court. Henceforth, all the proposals to file CAs/SLPs should be sent by the Commissioner only after obtaining the concurrence of the jurisdictional Chief Commissioner. While forwarding the proposal, the Commissioner shall also submit a certificate to the effect that legible copies of requisite documents are enclosed along with the proposal and that the proposal is sent within the time prescribed in the above stated circular.

(h) It is also felt important to put in place a mechanism for examination of CESTAT Orders in the Office of the Chief / Joint Chief Departmental Representative as they would have dealt with the cases before CESTAT and their opinion in the matter will certainly act as a guiding factor/facilitate the Commissioner to take a decision. Needless to say such communication has to be very fast especially where it is proposed to file appeal before the Supreme Court. The Board, vide its letter F. No. 390/Misc/411/07- JC dated 6th February 2008 had laid down the following mechanism in the Office of the Chief / Joint Chief Departmental Representative in this regard:-

(i) As mentioned in para 2.5 the proposal for filing of appeal before Supreme Court against the order of Tribunal should be sent to the Board within 15 days of receipt of the order. The proposal for appeal against the High court’s order should be sent within 20 days of the pronouncement of the order. The proposal against the High court’s order shall be initiated on the strength of the copy of the order circulated by the Court on its own motion or copy downloaded from the website of the Court i.e www.indiancourts.nic.in or www.courtnic.nic.in without waiting for the certified copy of the order. The certified copy of the order may be sent separately thereafter. All the proposals should invariably be sent in the proforma “B” and a flow chart, as per proforma “C” (which indicates the time allocated at each stage of filing appeal), shall be enclosed.

(j) The Chief Commissioners may strengthen their legal / Review / Judicial sections by re-deploying the staff from the Commissionerates. Sincere efforts must be made to ensure that the time limit is adhered to, however, taking into consideration the geographical constraints, serious view would be taken by the Board if the proposal is received beyond 20 days of the receipt of the CESTAT’s order / date of the order of the High Court.

(k). The Commissionerates should not take legal opinion from the Standing counsels in respect of the High Court’s orders for forwarding proposal to file appeal as the SLPs against the High Court’s orders are filed by the Board only after obtaining the legal opinion from the Ministry of Law & Justice and Ld. Law officers of the Government of India. Similarly, the orders of the Tribunal should be examined within the prescribed time without waiting for the recommendations of the CDR/Jt CDR and proposal for filing appeal before the Supreme Court sent as stipulated supra. As and when the recommendation of the DR is received, the same may be sent to Board in continuation of the earlier communication.

(l) In cases where the proposals are sent with delay beyond the prescribed period the Commissioner should, along with the proposal, indicate the reasons for the delay and the action taken / proposed to be taken against the officers responsible for delay.

(m) Where proposal is sent belatedly (beyond 30 days) or where revenue involved is 1 Crore or more, the appeal proposal should be sent through a special messenger. Such messenger should preferably be an officer well conversant with the case. Similarly in matters relating to challenge to constitutional validity of certain provisions of the statute, compliance of directions of Tribunal / High court within certain time less than the period of limitation, filing of contempt petitions against the department, grant of anticipatory bail, return of passports etc, the proposal should be sent through a well conversant officer. He should be prepared to stay in Delhi for 3-7 days with the possibility of making another trip at the time of vetting. It must be ensured that necessary logistic support and advance payment of TA/DA etc. are provided to him in time.

(n) The Commissionerates must send soft copy of all the proposals with statement of facts and grounds of appeal by e-mail to sojc-cbec@nic.in in respect of CA proposals against CESTAT order and to dirlegal_cbec@nic.in in respect of CA / SLP proposals against High Court’s order as soon as hard copy of the proposal along with all documents is sent by post or through messenger. This should be followed by sending the soft copy of the impugned order, and orders of the lower appellate authorities such as Commissioner (A) and /or CESTAT as the case may be, order in original and the show cause notice along with all the requisite documents as soft copies of these documents are required while preparing the paper book.

(o) It is noticed many a time that the proposals are sent by the Commissionerates to the sections of the Board not dealing with the same and redirection of such proposals adds to delay. Therefore it is important for the field formations to note the sections of the Board to whom the proposals for filing Civil appeals and Special Leave Petitions are to be sent:-

S.No	Category of proposals	Concerned Person/ section of the Board
1	Civil appeals against the orders of CESTAT	JS(Review), CBEC, 4th floor, Hudco Vishala Building, Bhikaji Cama Place, New Delhi-110 066
2	Civil appeal / SLP against the orders of High courts except cases mentioned at 3 below.	Commissioner (Legal ), CBEC, 5th floor, Hudco Vishala Building, Bhikaji Cama Place, New Delhi-110 066
3	Administration matters/CAT orders/vigilance cases	Joint Secretary (Admn.), CBEC, North Block, New Delhi

Documentation with the Civil Appeal / Special leave Petitions

(p) For proper representation of department’s case, it is necessary that all papers or documents presented by either side before the Tribunal or the High Court are available to the law officer or counsel representing the Revenue. It may also be noted that the Court insists that the status of the relied upon decisions of the Tribunal / High Courts is invariably indicated by the appellant, absence of which causes considerable inconvenience for proper appreciation of law and delivery of justice by the Hon’ble Judges. The Hon’ble Court had passed a judicial order stating that unless the status of connected/relied upon cases/judgment referred to by the Tribunal and the High Courts is made clear in the forefront of the synopsis of the cases annexed with the Civil Appeal/Special Leave Petition, the Registrar of the Apex Court should not number the revenue cases.

(q) Accordingly, the proposal to file civil appeal against CESTAT orders should be sent in the Proforma “B” along with all related documents viz.

(r) In respect of appeal proposal against High Court’s order, the same proforma “B” will be used. The proposal to file Appeal / SLP should contain the brief facts of the case, the gist of the orders of Appellate authority/Tribunal and of the High court and the proposed grounds of appeals along with the question of law to be framed before the Supreme Court. Apart from the documents as stated at (q) above (not all may be filed in certain cases such as in a writ petition), the following documents may also be enclosed with the proposal-

(s) In criminal matters, copy of the documents seized, the statements recorded and other relevant documents prepared during the course of investigation should be sent. If these documents are in vernacular, then their proper English translation duly authenticated by an officer not below the rank of Assistant Commissioner certifying the correctness of the translation should be sent.

(t) In view of the Court’s order mentioned at (p) above, a separate report on connected matters should be sent by the Commissionerates in the enclosed Proforma D along with the appeal proposal. Information on connected matters would mean details and status of the case/cases referred to and relied upon by the Tribunal or Court in the impugned order, as well as the judgments of Tribunal/High Courts or the Apex Court which are sought to be relied upon by the Department in support of their appeal. The correctness of the citations incorporated in the impugned orders, as well as applicability of these relied upon decisions to the case i.e., to say, whether CESTAT has correctly applied that ratio of a particular decision to the case under examination should be verified. After ascertaining the correctness of the citation and applicability thereof it shall be the responsibility of the Commissioner sending the appeal proposal to ascertain full information about the status of the relied upon cases, i.e. to say whether any appeal was filed against the said order/orders, what was the outcome of such appeal/appeals etc. Commissioners should ascertain this information from the Commissioners concerned and furnish the same to the Board.

(u) It has further been felt that a procedure must be devised by which technical literature, court orders, judgments, copies of written submissions as well as material including technical literature which is handed over to the Tribunal by the Counsel of the assessee at the time of oral submissions must be supplied to the Department. The Joint Chief Departmental Representatives shall ensure that the documents stated above are preserved and sent to the Commissioner concerned immediately after the pronouncement of the order so that the said documents can be made a part of the Paper Book in case it is decided to agitate the matter before the Supreme Court. In case the documents have not been received by the Commissioner at the time of sending the CA proposal to the Board, the same should be procured by the Commissioners from DR’s office and sent to the Board soon after dispatching the CA proposal or latest after filing of appeal.

Review of judgments of the Supreme Court

(v) We all are aware that every decision of the Hon’ble Supreme Court is final and needs to be implemented without waiting for any administrative concurrence. The DLA receives the certified copy of the order from the Court registry through the Central agency section and dispatches the same to the concerned Commissioner for compliance in the matter.

(w) It is pointed out that review of the Hon’ble Supreme Court’s order is rarely contemplated by the department and a petition filed. The limitation for filing of review petition is 30 days from the date of the order / judgment of the Supreme Court. The proposal of review must be sent by the Commissioner with the concurrence of the Chief Commissioner within 10 days of the pronouncement of order with reasons thereof. The Article 137 of the Constitution, order XLVII - review (the I schedule) of Civil Procedure Code 1908 and order XL of Supreme Court rules, 1966 may be seen for understanding the basic criteria for filing of review against the order / judgment of the Supreme Court.

PROFORMA “A”
(refer para (h) (ii) above)

Recommendation by the Jt CDR to jurisdictional Commissioners

1. Appeal No:-

2. Cause title:-

3. CESTAT Final order number and date:-

4. Issue involved (in brief):-

5. Submission of the DR before the Bench:-

6. Decision of the Bench:-

7. Reasons for filing appeal against the order:-

Joint Chief Departmental Representative

PROFORMA B

COMMISSIONER’S COMMENTS/REPORT ON TRIBUNAL / HIGH COURT ORDER

1.	Number and date of the Tribunal/High Court order
2.	Date of receipt in the Commissionerate
3.	Issue involved before the Bench.
4.	Facts of the case.
5.	Tribunal’s/High Court’s decision on the issues involved
6.	Are there any instructions of the Ministry/Board on the issue involved? Please enclose copies.
7.	Is there any earlier order of the Tribunal/High Court on this issue? Any action taken?
8.	Is there any Supreme Court’s judgment on the issues involved
9.	Whether the decision has a recurring effect with respect to the current tariff and statutes.
10.	Grounds for preferring appeal
11.	Revenue involved in the matter (demand/refund)
12.	Whether revenue implication has recurring effect or not
13.	Whether any refund accrues as a result of the impugned order

PROFORMA C

FLOW CHART SHOWING PROCESS UNDERTAKEN FOR FILING APPEAL / SLP IN CASES RELATING TO EXCISE, CUSTOMS AND SERVICE TAX AND RECOMMENDED TIME FRAME
\|Impugned order passed by CESTAT\|		\|Impugned Order-High Court\|
Receipt of impugned order through post Day 0\|		Application for certified copy-same day\|
Preparation and submission of proposal for challenging order in form of comments by concerned Commissionerate-15 days\|		Receipt of Certified Copy\|
All case papers including proposal sent to Judicial Cell, CBEC in cases relating to rate of duty and valuation papers, which takes decision to challenge order- 10 days\|	\ \ \ \ ______	Examination of SLP proposal against High Court orders by Legal Cell-10 days\|
Case papers sent to Central Agency Section for drafting Appeal/SLP\|	\ \ \ \ ______	Papers examined by Law Ministry- opinion forwarded to CAS which forwards the same to Law officer for further opinion as to feasibility of challenging order-7 days
CAS marks file to panel counsel for drafting Appeal/SLP-1 day\|
Drafting Counsel returns draft Appeal to CAS drafting Appeal/SLP-7 days\|
CAS forwards draft Appeal/SLP to CBEC (Legal / Judicial Cell), D/o Rev. M/o Finance for vetting-1 day\|
Vetted drafts are returned to CAS for filing with marked annexures-2 days\|		Date of Communication of Decision
Preparation of paper book (typing/copying) by CAS-5 days\|		\|Result of hearing
Civil Appeal filed in SC-day 41 SLP filed in SC from CESTAT-day 51 SLP filed in SC from HC-day 55	_____	\|Date of listing and hearing

PROFORMA “D”

[refer para (t) above]

REPORT ON CONNECTED MATTERS

1. Name of Commissionerate :

2. Cause title, Order No. and date of impugned order :

3. Give the details of cases relied upon by the CESTAT / High Court including cause title, citation, order No. & date; Whether department filed appeal against that order and if so the CA or CAD No. or SLP No., Board"s reference No. and the present status of the same; if appealed before High Court , appeal number and present status:

(A) First relied upon case

(i) Cause title, citation, order No. and date etc:

(ii) Commissionerate"s name:

(iii) If Appeal has been filed against CESTAT/ High Court’s order before Supreme Court, then CA/SLP No., Board"s reference No. etc:

(iv) Present status of the CA/SLP:

(v) If Appeal has been filed against CESTAT’s order before High Court, details thereof:

(vi) Present status of the appeal before the High Court:

(vii) In case the appeal as mentioned at (iii) or (v) above has been decided, whether the same has been accepted by the Department:

(Please give the above information in respect of other decisions upon which the CESTAT / High Court has relied by attaching extra sheets)

4. The details/citation of decisions relied upon by the Department while recommending for filing of appeal in the present case.

(i)
(ii)

5. Whether the decision relied upon by the Department as mentioned at Sl No. 4 above has attained finality; and if not, whether the same has been appealed against;

and if appealed against, then CA/SLP number assigned by SC registry / appeal number assigned by the High Court registry as the case may be:

(i)
(ii)

6. The present position / status of the CA/SLP No/ appeal before High Court in respect of the matters mentioned at Sl. No. 5 above.

(i)
(ii)

Commissioner of Customs & Central Excise

Annexure- II

Instruction as regards litigation before the High Court

Annexure II

Filing of appeals before High Courts

The Chief Commissioners shall also be involved in the process of litigation before the High Courts. Henceforth, acceptance of CESTAT’s orders or filing of appeals by the Commissioner before the High Courts shall be subject to obtaining the concurrence of the Chief Commissioner. This mechanism would also ensure uniform approach in filing the appeals before the High Courts within a Chief Commissioner’s jurisdiction.

There are instances where the Commissioners filed appeals before the High Court after obtaining some legal advice even though the issue related to valuation or rate of duty. The High Courts rejected revenue appeals as non-maintainable and delayed appeals were filed before the Supreme Court. The Supreme Court does not condone delay on grounds like pursuing appeal before a wrong forum and has been dismissing such delayed appeals. Such instances show the department in poor light besides the issue does not get examined on merit by the superior judiciary.

On the other hand, there have been instances where Civil Appeal proposals have been sent by the field formations to the Board office in cases not relating to valuation or rate of duty in which cases appeals lie before the High Court. An appeal lies to the High Court from every order passed in appeal by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) where the order is not relating among other things, to the determination of any question having a relation to the rate of duty (including interpretation of an exemption notification) or valuation of the goods or services for the purpose of assessment, if the High Court is satisfied that the case involves a substantial question of law. When such proposals are received in Board office, after examination in the Judicial Cell and after obtaining Member’s concurrence, these are returned back to the Commissionerate to file appeal before the High Court. Field officers are advised to refrain from sending such proposals to Board office as such an exercise leads to unnecessary wastage of resources and time.

Board expects the Chief Commissioners to be careful while deciding about the Court to approach.

Annexure III

Instructions for improving the quality of Departmental Representation before CESTAT

Annexure III

Improving the quality of Departmental Representation before CESTAT

Improving the quality of Departmental representation & upgrading the level thereof before the Tribunal is a priority area and therefore Board had conveyed its decision vide D.O.F. No.390/Misc/411/07-JC dated 7th January 2008 to the Chief Departmental Representative that the following types of cases shall be taken up by the Joint CDRs before the Tribunal as far as possible:

(i) Cases involving revenue of 3 Crores and more in Central Excise, 1 Crore and more in Customs and 50 lakh and more in Service Tax. For this purpose, total revenue, i.e. aggregate of the amount of duty/tax, penalty and interest (wherever quantified in the order), fine etc. will be the criteria.

(ii) All matters before the Larger Benches. However, in such cases, the Jt.CDRs may take the assistance, if necessary, of the SDR/JDR who represented the Department before the Referral Bench.

(iii) All matters remanded by the Hon’ble Supreme Court or High Courts.

(iv) All cases involving important question of law, cases having recurring revenue implication and cases having all India ramifications.

(v) Any other case, as may be assigned by the CDR.

2. Engagement of Special Counsels in cases involving complexities of law / high revenue stake/ having all India ramifications

A panel of retired officers of the department as Special Counsels was constituted in Aug 2006 (further expanded in 2008) to defend the cases of Revenue with their specialized knowledge in respect of cases involving complexities of law / high revenue stake/ cases involving all India ramifications. The Chief Commissioners may assign the cases to them in accordance with the guidelines laid down in this regard. The Commissioners may take stock of cases of the nature as specified above and recommend to the Chief Commissioner concerned for the engagement of the special counsel out of the said panel. The Chief Departmental Representative may also send his recommendations to the Chief Commissioner concerned for engagement of special counsels, if need be. The Chief Departmental Representative will also provide input to the Chief Commissioners in annual performance review of such special counsels.

3. Briefing the Departmental Representatives / Special Counsels by well conversant officers of the Commissionerate in important matters

Board further reiterates that well conversant officer(s) should be sent by the Commissioners to brief the Departmental Representative / Special Counsels in important matters for effective presentation of the case before the Tribunal. The Chief Departmental Representative / Joint Chief Departmental Representative should bring to the notice of the Chief Commissioners concerned, with a copy to Member (L&J), any instance of failure on the part of the Commissioner to send well conversant officer for briefing whenever it was called for. The CDR/Jt.CDR should undertake a review of the “briefing outcomes” on monthly basis in this regard.

4. Filing of written submissions in important matters:

Board desires that in every important case, a written submission should be filed before the Bench by the DR or the Special Counsel concerned. If such a submission has not been filed for any reason, then a suitable note bringing up the submission in the case file should be placed for review before the JCDR by SDR/JDR and before CDR where JCDR has appeared before the bench.

Annexure-IV

Instruction as regards action for dissemination of judgments in revenue’s favour

Annexure IV

Action for dissemination of judgments in revenue’s favour (a) Every Commissioner will undertake an exercise to sort out important pro-revenue decisions in respect of his jurisdiction and if it is observed that such cases have not been published / uploaded in the ELT/ STR / RLT / www.taxindiaonline.com ; send clear, legible and authenticated copy to them for publication in their journals/ website. The letter addressed to these publications along with the enclosures should also be endorsed to the CDR, CESTAT, New Delhi and all the Chief Commissioners for circulation amongst the JCDRs and Commissioners.

(b) Every authorized representative will send to the JCDR in-charge a list of favorable orders received during the month in which he / she had appeared either individually or in association with other DR or special counsel. At the end of the quarter, the JCDR in-charge will consolidate the reports received from all authorized representatives and get it verified whether all important pro-revenue orders have been reported or not. In the event of any such order(s) not being reported, copy of order(s) will be sent to the publications as mentioned above for favour of publishing the same and to JCDRs of other benches for their internal circulation. A copy of the reference will be sent to the CDR, CESTAT who will pursue the matter with the publications.

Annexure-V

Instructions as regards disputes between Government Department and Central PSUs / other Government Departments

Annexure V

Disputes between Central Government Department and PSU / other Government Departments

(a) In cases where disputes arise between two Central Government Departments or a Government Department and Public Sector Undertaking, the procedure laid down for obtaining clearance of the Committee of Disputes needs to be followed scrupulously. Attention is invited to Circular number 27/27/94-CX dated 2.3.94 as modified from time to time particularly by Circular Nos. 156/67/95-CX dated 17.11.95, 515/11/2000-CX dated 18.2.2000 and 578/15/2001-CX dated 20-06-2001 issued in this regard detailing the procedure to be followed in such cases. As emphasized in the Circulars cited supra, the Hon’ble Supreme Court has clarified that while there is no bar in lodgment of an appeal so as to save time, every endeavor should be made to obtain clearance of the Committee on Disputes. Board, therefore directs strict compliance to the instructions issued in this regard. Several proposals are being received much beyond the stipulated period of one month from the date of filing appeal which is contrary to the directions of the Hon’ble Court and the COD.

(b) The Cabinet Secretariat had issued OM F.NO. 1/126/5-T/2008-LC dated 7th April 2008 advising the Department as well as PSU not to refer cases where the disputed tax implication is less than Five Lakh. The said OM was circulated to all the Chief Commissioners vide letter F No 390/R/135/2008-JC dated.9.5.08. Accordingly, disputes involving amount of 5 lakhs or less should not be sent for obtaining clearance unless there are compelling reasons for doing so. The Commissionerates should, however, maintain appropriate database in respect of all such cases of litigation with PSUs where it was decided not to file or pursue appeal on account of low amount either at their level or at Board’s or COD level.

(c) Several instances have come to notice wherein the proposals do not contain all documents, do not have index and are not page numbered. Reference is invited to the OM F. No. 1/126/14-1/2009-LC issued by the Cabinet Secretariat and circulated by Board vide F No 390/R/187/2009-JC dated 10.8.2009. It must be ensured that the proposals contain an index page right in the beginning giving the running page numbers of the documents for ease of reference. All the documents should be legible and wherever photocopy is faint, typed copy be enclosed. )

(d) The proposals for obtaining clearance of the COD are to be sent to the Board simultaneously without fail at the time of filing appeal before the CESTAT/High Court. The Commissionerates should send soft copy of all the COD proposals including background of the dispute having the issues involved in the dispute in brief, statement of facts, grounds of appeal by e-mail to sojc-cbec@nic.in with the dispatch of the hard copy of the proposal.

Annexure-VI

The functioning of the Directorate of Legal Affairs

Annexure-VI

The functioning of the Directorate of Legal Affairs

(a) The Directorate of legal Affairs is the nodal agency to co-ordinate legal and judicial work of CBEC and its field formations. The work relating to Supreme Court matters are handled by the office of the Directorate located at 9, V. K. Krishna Menon Bhawan, Bhagwan Das Marg, New Delhi-110002. The telephone nos are 23381825/ 23074172/ 23388520. It works in close co-ordination with the Legal & Judicial Sections of the CBEC, Central Agency Section of Ministry of Law, Ld Law Officers and Senior Counsels in the Supreme Court and Commissioners of Customs, Central Excise and Service Tax. It has another office at 4th Floor, Rajendra Bhawan, 210, Deen Dayal Upadhyay Marg, New Delhi.

(b) The officers of Directorate attend the Court proceedings daily in respect of cases coming up for hearing in the Supreme Court and prepare a Daily Report indicating the outcome of the hearing before the Court. The said Daily Report is uploaded on the website of the department www.cbec.gov.in. The Directorate has been placing the Terminal list on the website from 2008 onwards and has also been placing the advance list, the weekly list and the cause list beforehand on the said website. The communications received from the Ld Law Officers, Senior Counsels and the Central Agency Section regarding the directions of the Court in certain matters, issue of notices, briefing schedule etc are conveyed to the Commissionerates by the Directorate.

(c) The Directorate is the nodal authority with regard to party’s appeal filed in the Supreme Court so as to ensure effective monitoring and co-ordination with field formation and the Central Agency Section in this regard. This would involve co-ordinating work relating to filing of caveat on important issues, timely filing of counter-affidavits and vakalatnama by the Commissioners, etc. The Commissionerate in cases where Notice of Lodgement of Appeal has been received by them should send vakalatnama on priority and para-wise comments with all the necessary documents directly to the Central Agency Section with intimation to the Directorate of Legal affairs so that counter affidavit is got prepared through the Central Agency Section. In this regard, a well conversant officer from Commissionerate may be deputed to collect a copy of the draft counter affidavit from CAS which is to be affirmed by the Commissioner concerned and duly notarised and to file the same in the Supreme Court Registry through the Central Agency Section well within the stipulated time.

(d) The Directorate is also required to liaise with the field formations in connection with filing of rejoinder to the counter affidavit filed by the respondent assessee. The Directorate should ensure that a copy of the counter filed by the party is collected and sent to the appellant Commissioner along with the Court’s directions, if any.

(e) In respect of cases where the Supreme Court registry points out to the CAS any defect in respect of the Revenue appeal, the Directorate is required to urgently bring this to the notice of the concerned sections in the Board for taking immediate curing measures.

------------------------------------------------------------------------------ Annexure-VII

The mechanism of listing of appeals / SLPs as followed by Supreme Court Registry, alertness expected from Commissioners and marking of cases to the Counsels

Annexure VII

The mechanism of listing of appeals / SLPs as followed by Supreme Court Registry, alertness expected from Commissioners and marking of cases to the Counsels

In this regard, it is relevant to understand about the „Lists? issued by Registry of the Supreme Court and the procedure adopted by the Central Agency Section for settlement of cases on such lists. The said lists are available on the websites www.indiancourts.nic.in or www.courtnic.nic.in . The Directorate (A reference to the Directorate here means the Directorate of Legal Affairs adequately described in Annexure VI) had occasions to circulate the Terminal list and has even placed it on the www.cbec.gov.in under the general heading of “Supreme Court matters–Cause lists / heard cases”. This list is generally issued in the month of July every year and contains the list of admitted cases which may be taken up during the year. It reflects the position of cases that have already been admitted and are likely to be listed for hearing in the Supreme Court during the year. In the event of the Directorate not circulating the list or putting it on the web, it would be incumbent upon the Commissioners to carefully surf the Supreme Court website to download the relevant portion of the said terminal list. Once the Commissioner has listed out the cases relating to his charge, he should have a system in place so that a well conversant officer could rush with case records at short notice to assist and brief the Senior Counsel or Law Officer.

2. The Supreme Court Registry issues several lists but two lists, viz, (i) Advance List and (ii) Weekly List are particularly relevant. Both these are also available on the websites sited supra and the Directorate has placed them on www.cbec.gov.in as well. Commissioners should visit the aforesaid website on regular basis to find out the cases pertaining to their jurisdiction which are likely to be listed during the coming days / week. Once the cases are identified, they should keep track of developments in the appeals against the connected matters (Refer Proforma “D”) as they may be asked to inform the same at very short notice. The Commissionerates can get ready with all relevant materials as they may later be called for briefing by the Counsels at a very short notice or may on their own report in coordination with the Directorate for briefing depending upon the importance of the matter.

(a) Advance List: This list is normally issued 10 days in advance from the actual date of listing of the case. This list is meant for the cases, which come on Mondays and Fridays. In other words, these are admission matters. This list, however, does not contain the information relating to the Court and Item No., under which the case is to be listed. Therefore, the Registry issues another list, which is called „List of Business?, wherein besides other details, the information regarding the Court and Item No. is also given. This „List of Business? is normally issued by the Registry of the Supreme Court 2 to 3 days in advance from the actual date of listing of the case, i.e. for Monday?s matters the list is issued on Thursday evening and for Friday?s matters, list is issued on Monday evening.

(b) Weekly List: This list is also normally issued on Saturday, i.e. 2 days in advance from the actual date of listing of the case. This list is meant for the cases, which come on Tuesdays, Wednesday and Thursday. In other terms, these are regular matters, which were earlier admitted by the Court. This list, however, does not contain the information regarding the Item No. but serial number 1 to 20 will virtually be item 101 to 120 under which the case is to be listed. It is relevant to add here that actual List of Business for Wednesday and Thursday is issued only in the late evening of the previous day i.e. for Wednesday matters it is issued on Tuesday; for Thursday matters it is issued on Wednesday and for Tuesday matters it is issued on Saturday evening.

3. Marking and allocation of cases to the Law officers and Panel Counsels is done by the Central Agency Section (or the senior most Law Officer), based on the actual List of Business normally 1 or 2 days in advance by the said officers and not on the basis of Advance List. After the settlement of Advocates, who will be pleading the CBEC cases before the Supreme Court, “Briefs” are sent by the said office to the Counsel so as to enable them to go through the same for effective presentation of the case before the Hon?ble Court. The Brief is normally handed over to the Counsel on the day of the settlement or the next day. But the time left between the receipt of brief and date of listing of the case ordinarily remains very short. The Directorate, therefore, can provide the briefing requirement details etc. to the concerned Commissionerate only when the names of Advocates have been finalized by the Central Agency Section and Briefs have been delivered to the Counsel. Effectively DLA gets 1 to 3 days time which may include holidays to take action on briefing requirement.

4. Thus, in view of unavoidable difficulties and system of marking of cases adopted by the CAS as brought out supra, it is imperative for the Commissioners to regularly log on to the website www.courtnic.nic.in or www.indiancourts.nic.in besides the CBEC website to see the various developments including the listing of their cases on the said site. As the Court?s orders are also normally uploaded on the said site, concerned Commissionerate may also take timely action for compliance accordingly.

Annexure -VIII

Points on which Zonal Chief Commissioner and CDR will furnish a one time compliance report

Annexure VIII

Report to be furnished by the Chief Commissioner & Chief Departmental Representative

Reports to be furnished by Zonal Chief Commissioner:

(I) Details of mechanism put in place for timely receipt of High Court

(II) Whether communications have been sent to Standing Counsels as regards timely application for obtaining certified copy of Courts order

(III) Whether Legal Publication and electronic library have been subscribed for officers dealing with Legal/Review matters.

(IV) Details of institutional mechanism put in place for timely receipt of CESTAT orders:

(V) Details of action taken for identification of pro-revenue judgments

(VI) Any suggestion as regards the subject matter of this circular

(VII) Any difficulty envisaged in implementation of these instruction

Report to be furnished by CDR

(i) Whether the mechanism for communication of important matters to Commissionerate laid down. If yes the details thereof.

(ii) The details of mechanism set up for examination of orders by Tribunal in terms of letter F. No. 390/Misc/411/07- JC dated 6th February 2008 and communication of views to Commissioners

(iii) Whether periodic meetings are held with field formations

(iv) The details of meeting held in the FY 2010-11

(v) Whether nodal officer has been appointed by each Commissionerate for collection of order of Tribunal

(vi) Any suggestion as regards the subject matter of this circular

Any difficulty envisaged in implementation of these instruction

11. The following circulars/instruction on becoming redundant upon issuance of these instructions stand superseded:

(i) Circular No. 313/29/97-CX., dated 6th May1997

(ii) Circular No 33/97- Cus dated 4th Sep1997

(iii) Circular No 332/48/97 –CX dt 9th Sep 1997

(iv) Circular No 349/65/97 –CX dt 31st Oct 1997

(v) Circular No. 402/35/98-CX., dated 9th June1998

(vi) Circular No 488/54/99 JC dt 12th Oct 1999

(vii) Circular No 517/13/2000 CX dt 2nd March 2000

(viii) Circular No 519/15/2000 CX dt 3nd March 2000

(ix) Circular No 544/40/2000 CX dt 6th Sep.2000 ,

(x) Circular No 550/46/2000 CX dt 18th Sep 2000

(xi) Circular no. 891/16/2005 CX dated 13th October 2005.

(xii) Circular No 835/12/2006 CX dt 6th Oct 2006

(xiii) Circular No 863/1/2008 CX dt 2nd Jan 2008

12. The following Circulars / letters issued by the Board that find mention in this Circular and its annexures are not being withdrawn

(i) Letter F. No. 390/Misc/411/07- JC dated 6th February 2008

(ii) D.O.F. No.390/Misc/411/07-JC dated 7th January 2008

(iii) Letter F No 390/R/135/2008-JC dated.9.5.08.

(iv) Circular No 27/27/94-CX dated 2.3.94 as modified from time to time.

(v) Circular No 156/67/95-CX dated 17.11.95,

(vi) Circular No.515/11/2000-CX dated 18.2.2000

(vii) Circular No. 578/15/2001-CX dated 20-06-2000

(viii) Letter F No 390/R/187/2009-JC dated 10.8.2009.

13. Receipt of this Circular may please be acknowledged.

14. Hindi version will follow.

(Sunil K Sinha)
Director (JC)

F. No. 390/Misc./100/2009-JC

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FLOW CHART SHOWING PROCESS UNDERTAKEN FOR FILING APPEAL / SLP IN CASES RELATING TO EXCISE, CUSTOMS AND SERVICE TAX AND RECOMMENDED TIME FRAME
\|Impugned order passed by CESTAT\|		\|Impugned Order-High Court\|
Receipt of impugned order through post Day 0\|		Application for certified copy-same day\|
Preparation and submission of proposal for challenging order in form of comments by concerned Commissionerate-15 days\|		Receipt of Certified Copy\|
All case papers including proposal sent to Judicial Cell, CBEC in cases relating to rate of duty and valuation papers, which takes decision to challenge order- 10 days\|	\ \ \ \ ______	Examination of SLP proposal against High Court orders by Legal Cell-10 days\|
Case papers sent to Central Agency Section for drafting Appeal/SLP\|	\ \ \ \ ______	Papers examined by Law Ministry- opinion forwarded to CAS which forwards the same to Law officer for further opinion as to feasibility of challenging order-7 days
CAS marks file to panel counsel for drafting Appeal/SLP-1 day\|
Drafting Counsel returns draft Appeal to CAS drafting Appeal/SLP-7 days\|
CAS forwards draft Appeal/SLP to CBEC (Legal / Judicial Cell), D/o Rev. M/o Finance for vetting-1 day\|
Vetted drafts are returned to CAS for filing with marked annexures-2 days\|		Date of Communication of Decision
Preparation of paper book (typing/copying) by CAS-5 days\|		\|Result of hearing
Civil Appeal filed in SC-day 41 SLP filed in SC from CESTAT-day 51 SLP filed in SC from HC-day 55	_____	\|Date of listing and hearing