BURDEN OF PROOF

The onus or burden to prove that a product falls within a particular tariff item is always on the revenue. This is what the apex court has been repeatedly saying, the latest judgment being Puma Ayurvedic Herbal (P) Ltd. vs. Commissioner of Central Excise, Nagpur, dated March 8, 2006 reported in 145 STC page 200. It is the settled law. As early as in the year 1997, the Court had severely criticized the revenue for leading no evidence which could disprove the averment made by the assessee. See Hindustan Ferrodo Ltd. vs. Collector of Central Excise, Bombay 106 STC 214 (SC). In fact, the Court, in that case, has also expressed its anguish over the attitude of the Tribunal for making suppositions that would tantamount to evidence that the party before it had failed to lead.

Despite such frequent censure by the apex court, the bureaucracy has not changed its style of working. The Determination proceedings under the VAT law and erstwhile Bombay Sales Tax Act are the statutory proceedings. One should see how these proceedings are conducted. Fifteen minutes per applicant. We have not come across any Bench of the Tribunal who could complete the hearing on classification of goods in one sitting. Most of such matters are being heard for days together. But the Commissioner’s office does not require more than fifteen minutes. This is because, they have to just reject whatever has been submitted. In their view affidavits and certificates are always given by interested persons. The judgments forwarded to bring out the legislative intention are always, in their view, not applicable, since bureaucratic intention is otherwise. Entire attempt is to throw the product out of the coverage of the entry, which legitimately applies, only because it attracts lower rate of tax and while doing so no efforts are made to lead the evidence which would justify such act.

This is a sorry state of affairs. In the days of cut throat competition the quasi-judicial authority is expected to be more careful and judicious. That apart, the unsettled law does not help any one. Revenue and assessee both keep on litigating. Dealers who can understand the correct legal position do not follow such ruling given by the Commissioner. Ultimately their liability is protected. Those may or may not be major in number but their revenue contribution is always major. Big industries can only afford to have the legal battles. Small dealers follow such rulings and ultimately close their shutters.

This was not the scenario in early eighties. We appeal to the Hon'ble Commissioner to have a look to the decisions given then. In every matter wherein the technical knowledge was required, experts opinions were called for. The applicants were given opportunity to have their say on such opinions obtained by the revenue and finally the decisions were given considering all aspects of the matter. Such decisions stood on the judicial book, undisturbed, for years together and even the Court has respectfully followed them. Merind’s judgment of our own High Court is one such example.