Appeal, Review, and Settlement of Cases under the Customs Act, 1962

Like any other tax law, the customs law contains detailed provisions for judicial review, dispute resolution, appeal, and review. The appellate authorities for cases under Customs Law include the Commissioner (Appeals), Customs Excise, Review Authority and Service Tax Appellate Tribunal (CESTAT), High Court, and Supreme Court.  In this article, we will discuss in detail the appeal, review, and settlement of cases under the Customs Act of 1962.

Commission for appeal, review, and settlement of cases under the Customs Act, 1962

The Commission strives to ensure that customs disputes are resolved expeditiously without much tension. The provisions related to it were introduced in the Finance Act of 1998. Under this, cases are dealt with by the Commission at the request of an assessee who wants to accept liability without contesting the case.

Appeal to the Commissioner (Appeal)

Power to adjudicate cases is conferred on all officers of the rank of Superintendent/Assessor and above subject to prescribed monetary limits and other criteria. 

• The primary stage of appeal against any decision passed by any officer below the level of Chief Commissioner or Commissioner of Customs lies to the Commissioner (Appeals) within 60 days from the date of communication to the addressee of such decision or order in terms of section 128 (appeal by the person aggrieved by such order) or Section 129 (D) (4) [appeal by the union against the review of order], as the case may be, of the Customs Act, 1962. 
• The procedure for appeal by the Department against the order/decision of officers below the level of Commissioner is such that every such order is reviewed as to the legality under section 129D. If, on review, the judicial decision/decision is not found to be legal and proper, the Commissioner may by order direct any subordinate officer to appeal to the Commissioner (Appeal). The said order shall be forwarded by the commissioner within 3 months from the date of notification of the decision on the court decision and based on such order, an appeal will be filed with the commissioner (appeal) within 1 month from the date of issuance of the said order of the commissioner. 
• The limitation period for submitting an appeal to the commissioner (appeal) is 60 days from the date of notification of the order against which the appeal is being filed. However, the Commissioner (Appeals) may allow a further period of thirty days if shown sufficient cause.

Procedure for Appeal to the Commissioner (Appeal)

The procedure for filing an appeal with the Commissioner (appeal) is that the appeal must be filed on Form No. CA-1 [according to Section 128 of the said Act] and on Form CA-2 [according to Section 129D sub-section 4 of the said Act], as prescribed by rule 3 and rule 4 of the Customs (Appeal) Rules, 1982. Once the (appeal) is filed, the Commissioner (Appeal) shall give the appellant an opportunity of being heard. The Commissioner (Appeals), if sufficient cause is shown, may adjourn the hearing up to 3 times. The Commissioner (Appeals) may allow any grounds of appeal not set out in the appeal filed if he is satisfied that their omission was not willful or unreasonable. The Commissioner (Appeals) shall hear and decide every appeal within 6 months from the date of the appeal and- 

• confirm, vary, or set aside the decision or order against which an appeal has been filed; or 
• remanding the matter back to the adjudicating authority with directions for a fresh order or decision, as the case may be, in the following cases, namely:
• where the order or decision has been made without following the principles of natural justice; or 
• if no order or decision has been made after a reassessment under section 17; or  
• where a refund order has been made under section 27 by crediting the amount to the fund without recording any finding on the evidence adduced by the applicant.

An order for enhancement of any penalty or fine in place of confiscation or seizure of goods of higher value or reduction of the amount of refund shall not be passed unless a reasonable opportunity has been given to show cause against the proposed order.

If the Commissioner (Appeals) believes that any duty has not been collected or has been assessed short or erroneously returned, no order shall be passed requiring the appellant to pay any duty uncollected, short, or erroneously returned unless the appellant shall be notified within the period specified in Section 28 to prove the reason against the proposed order.

Note- The resolution of the commissioner (appeal) on the disposal of the appeal is in written form and contains the points for determination, the decision on them, and the reasons for the decision. 

Review of orders issued by the Commissioner of Customs and Commissioner (Appeals) 

The procedure for the review of the order of the Chief Commissioner of Customs or the Commissioner of Customs and the Commissioner of Customs (Appeals) by the Ministry is prescribed in Section 129D (1) and Section 129A (2) of the Customs Act, 1962.

As per section 129D (1), the Committee of the Chief Commissioner of Customs or the Chief Commissioner may call for and examine records of any proceedings in which the Chief Commissioner of Customs or the Commissioner of Customs has made any decision or order as an adjudicating authority to ascertain the legality or propriety of any such decision or order. A Committee of Chief Commissioners of Customs or a Chief Commissioner of Customs consisting of two, one of whom is the Chief Jurisdictional Commissioner, may by order direct the Commissioner to appeal to the Court of Appeal. In case the Committee differs in its opinion as to the legality or propriety of the decision or order, it shall refer to the Board and the Committee shall review such order and, if it is of opinion that the order is not lawful and proper, may by resolution order the Commissioner concerned, to appeal to the tribunal.

As prescribed in section 129D (2), the Chief Commissioner of Customs or the Commissioner of Customs may call for and examine the record of any proceeding in which any decision or order under the Customs Act has been passed by a Magistrate subordinate to him to ascertain whether of the legality or propriety of any such decision or order and may by order direct such authority or any customs officer subordinate to him to apply to the Commissioner (Appeals) for a determination of such point arising from the decision or order as the Chief Commissioner of Customs or the Commissioner of Customs may in his order specify.

Such orders must be passed within 3 months from the date of communication of the decision. On sufficient cause, such time may be extended by another 30 days.

Application for Revision

The Central Government may, on the application of any person affected by an order of the Commissioner or Commissioner (Appeals), in the case of baggage, returns, and short landing/non-landing of goods, cancel, or modify such orders as may be prescribed under section 129DD of the Customs Act, 1962. However, the Central Government may refuse to accept an application relating to an order if the differential duty or fine, or penalty imposed by such order does not exceed Rs.5000. 

• An application for review by the Central Government must be made within three months of the date on which the order against which the application is made is communicated to the applicant. The Central Government may allow a further period of three months if it is satisfied that there is sufficient reason for not submitting it within the period of limitation. 
• An application for revision is to be made in Form No. CA 8 prescribed in Rules 8A and 8B. The prescribed fee is- 
• Rs.200/- where the amount of duty and interest, fine, or penalty demanded is up to Rs.1 lakh;  
• Rs.1,000/- where the amount of duty and interest, fine, or penalty demanded is more than Rs.1 lakh. However, no fee is payable in the case of a request for review by the Ministry.

Appeal to the High Court

An appeal lies to the High Court from any order passed in appeal by the Appellate Tribunal (CESTAT) on or after 01.07.2003 which does not relate to the determination of the rate of duty if the High Court is satisfied, that the case includes a substantial question of law. However, where the question relates to the determination of the rate of duty or value for assessment purposes, [and an order made by the Appellate Tribunal before the establishment of the National Revenue Tribunal] we shall appeal to the Supreme Court. 

The period of limitation for filing an appeal to the High Court is one hundred and eighty days from the date on which the Chief Commissioner of Customs or the Commissioner of Customs or the other party receives the order appealed. The High Court may, after the expiry of this period, allow the appeal if it is satisfied that there is sufficient cause for its failure to present it within the period of limitation. 

If the appeal is filed by the other party, it shall be accompanied by a fee of Rs. 200. 

If the High Court is convinced that it is a question of law, it formulates a question of law. The High Court may consider any other material question of law which it has not formulated if it is satisfied that the case involves such a question. The High Court may decide any question which has not been decided by the Appellate Tribunal or which has been wrongly determined by the Appellate Tribunal. 

The Civil Procedure Code of 1908 applies to an appeal filed in this way to the High Court unless otherwise provided in the said Act.

Appeal to the Supreme Court

Under section 130E of the Customs Act 1962, an appeal may lie to the Supreme Court against: 

• any judgment of the Supreme Court given
• in an appeal brought under section 130; or 
• a reference made by the Appellate Tribunal under section 130;
• on an application made under section 130A, provided that the High Court, of its motion or on an oral application made by an aggrieved party, certifies fit for an appeal to the Supreme Court; or 
• any order made [before the establishment of the National Tax Tribunal] by the Appellate Authority relating to the determination of any question relating the value of the goods or to the rate of duty or for assessment.

An aggrieved party does not normally make any application to the High Court to confirm that the case is appealable to the Supreme Court. Therefore, in such cases, the aggrieved party can agitate the order/judgment of the Supreme Court before the Supreme Court by applying for special leave under Article 136 of the Constitution of India. The time that the court elapses from the date of submission of the application for a certified copy of the order to the time when the copy is ready for delivery is not included in the calculation of the limitation period.

Final words

Any appeal by the department to any appellate body shall be made only after the order review procedure under the Customs Act has been followed. In addition to the appeal route, an alternative dispute resolution mechanism is also provided through case resolution by a dispute settlement committee.