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Audit Objection to CESTAT


Audit Objection to CESTAT – Career oriented adjudication are a great burden on the Industry

Only in a few and rare cases, the arguments and case law cited are studied judiciously. Because, MMC ( Monthly Monitoring Committee) of Audit will decide ( with official lunch). To be on the safe side, issue objection, we wait for the reply of assessee.

After objection, issue SCN. We will see at the time of adjudication.

At the time of adjudication, “You have a strong case, but you can definitely expect justice at Commissioner(Appeals) or CESTAT

If any favorable order as per law(adjudication order) is reviewed by Commissioner of Chief Commissioner, it will affect their promotion. There is no punishment for passing constantly wrong orders. Even if it contemplated, an Assistant Commissioner will become a Commissioner or Chief Commissioner.

The assessee is left with only one alternative. Pay pre-deposit and appeal to Commissioner (Appeals). Even CBEC warned adjudicating and appellate authorities about routine and mechanical confirmation of notices/appeals is a reflection on exercising judicial approach.

Next ordeal. If you appeal to CESTAT on the orders of Commissioner (Appeals), pay 10% of pre-deposit and claim refund of 7.5 % pre-deposit and not the differential 2.5%.

Up to pre-GST, the percentage of pre-deposit is only on the duty/service tax. In GST, the pre-deposit is on the duty/service tax plus mandatory minimum penalty. It means, the duty/service tax in GST regime is twice the pre-GST regime. It only gives additional teeth to the irresponsible adjudicating/appellate authorities and also blanket powers to corrupt officials. A wrong order can close the industry, but the officer passing the atrocious order can go up to Chairman of CBEC. Any bold Government will order Nuremberg type of trials as it will hurt the image of our country.

My own experiences as a consultant:

1) When CETA,1985 ( Central Excise Tariff) is the bible for classification, why do you show downloaded material Wikipedia or Wikileaks or panama leaks and ask the questions to the assessee . Unfortunately, the assessee does not know the difference between CETA,1985 ( Central Excise Tariff) and Wikipedia or Wikileaks or panama leaks . The same authority passed a favourable order ignoring a new Tariff Item introduced in 2010 budget for rubberised foam mattress attracting 18% duty. It means that they have their own narrative or dictated narrative irrespective of CETA,1985 ( Central Excise Tariff) . Are thy fit to serve as adjudicating authorities ?

2) A junior IRS officer feels that there is no relation between a machine and electricity. Can you ever produce any case law ?

3) the REVENUE OF A LESSOR IS SHOWN AS INCOME AS LESSEE

BRIGHT LIGHT

IN CESTAT, MEMBER(JUDICIAL) OR MEMBER (TECHNICAL) CAN NOT BECOME PRESIDENT OF CESTAT. ONLY A RETIRED OR SERVING HIGH COURT JUDGE CAN BECOME PRESIDENT OF CESTAT. STILL, THEY ARE DELIVERING EXCEPTIONALLY BOLD,GOOD, JUDICIOUS AND LEGALLY SUSTAINABLE ORDERS ORDERS.

SUGGESTIONS

ONE JUDICIAL MEMBER SHOULD BE APPOINTED IN EACH JONE TO RATIFY THE ORDERS OF ADJUDICATING/APPELLATE AND REVIEWING AUTHORITIES. THE COST IS LESS BUT IT IMPROVES THE IMAGE OF THE COUNTRY AS ” EASE OF DOING BUSINESS” IN STEAD OF CLOSURE OF BUSINESS”

 

Written by
CMA VSRM KASYAPA AND ASSOCIATES, HYDERABAD

 

 

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