Manual No. 3
Procedure followed in the decision making process, including channels of supervision and accountability
Procedure to be followed in pronouncing the advance rulings stands notified vide Authority for Advance Rulings (Central Excise, Customs & Service Tax) Regulations, 2005.* The said procedure has into effect from 26.01.2005.
Detailed procedure in this regard is laid down vide Regulations 4,9,15 to 20, 23, 26 and 27. Same are reproduced below:
Powers of the Authority. - (1) The Authority shall have the power to hear and determine all applications and petitions.
(2) The Authority may, if any difficulty arises in giving effect to its order/advance ruling, either suo motu or on a petition made by the applicant or the Commissioner within a period of three months of noticing the difficulty, by appropriate order remove such difficulty, and pass such other order as it considers just and necessary in the circumstances of the case.
(3) The Authority may reopen the hearing of any case, before pronouncement of its order/advance ruling, for sufficient reasons,
(4) The Authority may, in an appropriate case, direct -
(i) examination of any records and submission of report;
(ii) conduct of any technical, scientific or market enquiry of any goods or services and submission of report and may also call for reports from experts and order such further investigation as may be necessary for effectual disposal of the application.
(5) The Authority shall have all the powers of a civil court in regard to the following matters, namely:-
(i) discovery and inspection ;
(ii) enforcing the attendance of any person and examining him on oath;
(iii) issuing commissions; and
(iv) compelling production of books of account and other records.
*Notification No. 1/2005-AAR dated 7th January, 2005.
Procedure on receipt of an application. - (1) The officer receiving the applications hall put his initials and the stamp of the Authority thereon together with the date and time of receipt thereof and shall also acknowledge its receipt and he shall also enter the particulars of the application in the register of daily filing, maintained for that purpose.
(2) The application shall be scrutinized by the officer authorized by the Secretary for that purpose for any deficiency/defect and any deficiency/defect noticed in the application or annexures thereof shall be communicated to the applicant as far as possible within ten working days from the date of receipt of application.
(3) The applicant shall be required to rectify the deficiency/defect within the time granted by the Secretary and such application shall deemed to have been received on the date when it is re-submitted after removal of such deficiency/defect, for the purposes of sub-section (6) of section 28I of the Customs Act or sub-section (6) of section 23D of the Central Excise Act or sub-section (6) of section 96D of the Service Tax Provisions, as the case may be.
(4) Date of receipt of an application free from any defect or deficiency in the secretariat of the Authority shall be deemed to be the date of the application for the purposes of sub-section (4) of section 28H of the Customs Act or of sub-section (4) of section 23C of the Central Excise Act or of sub-section (4) of section 96C of the Service Tax Provisions.
(5) When an application is free from any defect/deficiency, an endorsement "examined and registered" shall be made thereon and a serial number allotted thereto.
(6) In case the defect/deficiency is not removed/made good within the time granted under sub-regulation (3), the application shall be placed before the Authority for appropriate orders.
(7) On allotment of serial number to an application under sub-regulation (5), a copy of the application shall be forwarded to the concerned Commissioner of Customs/Central Excise for furnishing relevant records with comments if any, within two weeks of the receipt of the application.
(8) On receipt of the relevant records/comments from the concerned Commissioner under sub-regulation (7) or after expiry of two weeks or such further period as may be allowed by the Authority, the application shall be placed before the Authority for passing orders in terms of sub-section (2) of section 28I of the Customs Act or sub-section (2) of section 23D of the Central Excise Act or sub-section (2) of section 96D of the Service Tax Provisions, as the case may be.
(9) In a case where the Authority considers that prima facie the application is liable for rejection, a notice shall be issued to the applicant indicating the reasons therefore together with the comments, if any, of concerned Commissioner, giving an opportunity to the applicant of being heard in person or through an authorized representative and a copy of the notice shall be endorsed to the concerned Commissioner.
(10) On the date fixed for hearing or such other date to which the case is adjourned, the Authority may pass an order either allowing or rejecting the application under sub-section (2) of section 28I of the Customs Act or sub-section (2) of section 23D of the Central Excise Act or sub-section (2) of section 96D of the Service Tax Provisions, as the case may be and a copy of the order passed by the Authority shall be sent to the applicant and the concerned Commissioner.
(11) Where an application is allowed, the comments of the concerned Commissioner and further material, if any, shall accompany a copy of the order sent to the applicant drawing his attention to the statutory provisions that he has a right to be heard, if he so desires, before pronouncement of advance ruling and the response of the applicant should reach the Authority within two weeks of receipt of the copy of the order.
(12) Hearing of the application shall normally be held between 11.00 a.m. and 5.00 p.m. on a working day in the court - room of the Authority or an alternative place fixed by the Authority.
(13) In the absence of request for personal hearing from the applicant, advance ruling shall be pronounced after hearing the concerned Commissioner or his authorized representative, if present, on the date of hearing and on the basis of records available with the Authority.
(14) Where the Authority reserves the application for consideration, the advance ruling shall be pronounced in the open court under intimation to the applicant and the concerned Commissioner and a copy of the advance ruling shall be served upon the parties to the application and the concerned Commissioner.
Hearing of application.-(1) On the day fixed, or any other day to which the case is adjourned, the Authority shall hear the applicant or his authorized representative in cases where it is proposed to reject the application or where the applicant seeks an opportunity of being heard and the Authority may also hear the Commissioner or his authorized representative, if it considers it necessary, before pronouncing its advance ruling.
(2) In an appropriate case, the Authority may call upon any person to depose or to supply such material, as it may consider necessary to arrive at a decision.
(3) The Authority may, in an appropriate case where an important question of law arises, issue notice to a Law Officer of the Central Government including the Attorney General and Solicitor General to assist the Authority in the matter.
(4) It will also be open to the Authority to appoint an advocate as amicus curie to assist the Authority in an application.
(5) The Authority may, on such conditions as the circumstances of the case require, adjourn the hearing of the application.
Hearing of application ex parte.- Where on the day fixed for hearing or any other day to which the case is adjourned, the applicant or the Commissioner does not appear in person or through an authorized representative when the application is called for hearing, the Authority may dispose of the application ex parte on merits:
Provided that where an application has been disposed of under this regulation and the applicant or the Commissioner, as the case may be, applies within seven days of receipt of a copy of the order/advance ruling and the Authority is satisfied that there was sufficient cause for his non-appearance when the application was called for hearing, the Authority may, after allowing the opposite party a reasonable opportunity of being heard, make an order setting aside the ex parte order and restore the application for fresh hearing.
Withdrawal of application.- The applicant may withdraw his application within thirty days from the date of such application and thereafter only with the leave of the Authority.
Modification of the order/advance ruling.- The Authority may suo motu or on a representation made to it by the applicant or the Commissioner or otherwise, but before an advance ruling pronounced by the Authority has been given effect to, on coming to know that there is a change in law or facts on the basis of which the advance ruling was pronounced, it may by order modify such ruling in such respects as it considers appropriate, after allowing the applicant and the Commissioner a reasonable opportunity of being heard.
Rectification of mistakes.(1) The Authority may, with a view to rectifying any mistake apparent from the record, may amend any advance ruling pronounced by it before such ruling has been given effect to.
(2) Such amendment may be made suo motu or when the mistake is brought to the notice of the Authority by the applicant or the Commissioner, but only after allowing the applicant and the Commissioner a reasonable opportunity of being heard.
Amendment of the Record.- If at any stage of the proceedings it is brought to the notice of the Authority that there is any factual or material error in the records, the Authority may permit amendment of the records after hearing the applicant and the Commissioner.
Regulation 23.Declaration of advance ruling to be void in certain circumstances.- (1) Where it is brought to the notice of the Authority on a representation made by the Commissioner or otherwise that an advance ruling pronounced by it has been obtained by the applicant by fraud or misrepresentation of facts, the matter shall be examined by the Authority and any such representation shall be supported by an affidavit duly attested and accompanied with attested copies of documents relied upon.
(2) If the Authority after examining the representation is prima facie of the view that the advance ruling appears to have been obtained by the applicant by fraud or misrepresentation of facts, the applicant shall be given a notice to explain as to why the ruling should not be declared void ab initio under sub-section (1) of section 28K of the Customs Act or sub-section (1) of section 23F of the Central Excise Act or sub-section (1) of section 96F of the Service Tax Provisions, as the case may be.
(3) Such notice to the applicant shall be in writing -
(a) informing him of the grounds on which it is proposed to declare the advance ruling as void ab initio;
(b) enclosing copies of the documents, if any, sought to be relied upon;
(c) giving an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds for declaring the advance ruling void ab initio; and
(d) giving a reasonable opportunity of being heard in person or through an authorized representative in the matter.
(4) A copy of the notice with enclosures shall also be forwarded to the Commissioner for comments, if any, and a reasonable opportunity shall also be allowed to the Commissioner or his authorized representative of being heard before passing any order.
(5) Where the Authority finds that the advance ruling was obtained by the applicant by fraud or misrepresentation of facts, the same shall be declared void ab initio.
Authentication and communication of orders/advance rulings.- (1) Every order/advance ruling of the Authority shall be duly signed by the Chairperson and the members of the Authority pronouncing the order/advance ruling and bear the official seal of the Authority.
(2) A certified copy of order/advance ruling of the Authority shall be communicated to the applicant and the Commissioner under the signature of the Secretary or another officer of the Authority authorized by the Secretary in this behalf and bear the official seal of the Authority.
Proceedings of Authority- (1) When one or both of the Members of the Authority other than the Chairperson is unable to discharge his functions owing to absence, illness or any other cause or in the event of occurrence of any vacancy or vacancies in the office of the Members, the Chairperson alone or the Chairperson and the remaining Member may function as the Authority.
(2) Subject to the provisions of sub-regulation (3), in case there is difference of opinion among the Members hearing an application, the opinion of the majority of Members shall prevail and order/advance ruling of the Authority shall be expressed in terms of the view of the majority but any Member dissenting from the majority view may record his reasons separately.
(3) Where the Chairperson and one other member hear a case under sub-regulation (1) and are divided in their opinion, the opinion of the Chairperson shall prevail.