Stop issuing trade notices

 

by

 

VIJAY. K. KUMAR

MA, B.Ed,BL,MBA

Superintendent of Central Excise, Hyderabad

(author of "Guide to Excise Valuation" and over 50 articles in ELT

"Consistency and discipline are, according to this Court, of far greater importance than the winning or losing of court proceedings"

said the Supreme Court Of India in PAPER PRODUCTS LTD .v COMMISSIONER OF CENTRAL EXCISE - - 1999 (112) E.L.T. 765 (S.C.)

As per rule 233 of the Central Excise Rules 1944, the Board, Chief Commissioners and Commissioners were given the power to issue written instructions providing for any supplemental matters arising out of these rules.

As per rule 31 of the new rules, "The Board or the Chief Commissioner or the Commissioner, may issue written instructions providing for any incidental or supplemental matters, consistent with the provisions of the Act and these rules"

In exercise of these powers, Commissioners have been frequently issuing Trade Notices. The Board instructions are also translated into Trade Notices. In fact issue of Trade Notices is a major activity in the technical sections of all Commissionerates.

Incidentally there is no uniformity even in these Trade Notices. There was no uniformity even in the name. In some Commissionerate they are called Trade Notices, in some others Instructions. What's in a name? They were supposed to fill the gaps and provide a smooth functioning mechanism. Thousands of Trade Notices issued by various Commissionerates have made the law and procedure more complicated and confusing than they could have ever become without these supplementary instructions. With the growth of Commissionerates, it became confusing whether Trade Notices of one Commissionerate were applicable in other Commissionerates. It so happened that on a particular issue, some Commissioners issued Trade Notices while others did not. There was no uniformity even within a zone under a Chief Commissioner. Why, Commissioners sitting in the same building did not issue the same trade Notices!. There was a possibility that for two units situated across the Road to each other, two sets of instructions would apply as they would fall under different Commissionerates. With the on-going cadre review, we will have more than half a dozen Commissionerates in each of our major cities and even minor towns will have more than one Commissionerate. If each of these Commissionerates is going to issue separate Trade Notices, we will be lost in the paper maze of instructions.

Fortunately the Hon'ble Supreme Court intervened to bring in some order in the situation . In STEEL AUTHORITY OF INDIA Versus COLLECTOR OF CUSTOMS, BOMBAY - 2000 (115) E.L.T. 42 (S.C.), the Apex court observed , "It is hardly to be supposed that the Customs authorities can take one stand in one State and another stand in another State. The trade notice issued by one Customs House must bind all Customs authorities and, if it is erroneous, it should be withdrawn or amended, which in the instant case, admittedly, has not been done." This was followed in several CEGAT orders. Applied to Central Excise, it translated into one Commissioner issuing Trade Notices binding on all other Commissioners all over India. Can Pune II Commissioner set the law and procedure, say in Madurai? And what if Madurai already has a contradictory Trade Notice? If Trade Notices of one Commissionerate is applicable all over India, why should Commissioners issue Trade Notices at all? Why not this be done by the Board? – For uniformity and better clarity.

 

I believe ELT has also contributed to this confusion. Once a Trade Notice of a Commissionerate is published in ELT, other Commissionerates follow suit and the Trade Notice almost on similar lines is issued by other Commissionerates. Commissionerates do circulate their Trade Notices among themselves, which are mostly lost in the mountains of paper that go through a Commissionerate. ELT is handier and quickly noticed.

Sometime back Rajkot Commissioner issued a Trade Notice - 200(121)ELT T8, to
the effect that refund of pre deposit is not covered by Section 11B and refund would be granted on a simple application. Several Commissioners followed suit. But now this doesn't appear to be the view of the department and at least one High Court. Some Commissionerates have now withdrawn their Trade Notices. Recently there has been a spate of Trade Notices clarifying and amplifying the provisions of rule 16 of the new rules regarding retention / re entry of duty paid goods. When Trade Notices of one Commissionerate are applicable in all other Commissionerates, why each Commissioner should issue separate Trade Notices? And what is the position in Commissionerates where similar Trade Notices are not issued? Do they accept the procedure prescribed in the foreign Trade Notice? (As per the SCI order, they are bound to)

 

In this confusing situation, I suggest that we do away with the practice of issuing Trade Notices as

1. They are confusing and sometimes contradictory
   
2. They are against the principle of uniformity in the tax administration
   
3. At best they are only duplication of work – no waste of duplicating paper and multiplication of work.
   
4. Most of the Trade Notices are simply reproduction of notifications and instructions of the Board without any change. Most of the Trade Notices read, "The Notification / Circular of the Board is herewith communicated" and even the words, "Trade and field formations may be informed accordingly" are not deleted. These Notifications and circulars are any way available in ELT and the web site. There is no point in communicating after a long delay what is already available to the public.
   
5. It would save a lot of stationery and time in the offices which can be put to better use.
   

 

In any case after the new rules and the manual have come into existence, Commissioners are not supposed to issue these Trade Notices regularly. As per para 1.2 of Chapter 1 of the new Central Excise manual,

" 1.2     The Commissioner or Board, under Rule 32(sic) of the said Rules are empowered to issue written instructions providing for any supplemental matters arising out of the said Rules. Such instructions may, where the Commissioner considers absolutely essential, permit temporary deviation from the standing instructions. However, such instructions should be at once communicated to the Board and unless of purely local interest, they will normally, if approved, be subsequently incorporated in this Manual" (emphasis added)

 

 

 

EXCISE LAW TIMES – 01.04.2002- A 55