Powers , Classes, Appointment of officers of Customs & Central Excise Officer under Indirect Tax Laws

1. Introduction

1.1. It is essential that officers working in various wings of Customs, Excise and Service tax department remain aware of legal provisions relating to their appointment, powers and functions under three main tax laws dealing with in-direct taxes, namely, Customs Act, 1962; Central Excise Act, 1944 and the Finance Act, 1994.

1.2. In addition to exercising powers under three indirect tax statutes, they also derive powers given to them under various other allied laws such as NDPS Act,1985; PITNDPS Act, Chemical Weapons Convention Act,2000 etc. in which certain powers for specific purposes have been given to our departmental officers for implementation in the field.

1.3. As the officers of our department have been given powers under various allied Acts, similarly the officers of various other departments have also been empowered under Customs Act, 1962 to exercise power of Custom officers subject to such limitation as have been specified in such empowering notification.

1.4. Therefore, to understand the topic, it would be appropriate to divide this topic into three parts:

(a). Legal provisions (including notifications)providing for appointment, powers of officers of Customs, Central Excise and Service Tax department under three indirect tax statutes:

(b). Powers given to the officers of other departments under the indirect tax statutes.

(c). Legal provisions under various other allied Acts empowering officers of Customs, Central Excise and Service Tax department to exercise powers under these Acts.

1.5. Further, at the end of this e-book, provisions relating to delegation of powers and notification issued have also been discussed and explained.

2. Classes of Officers:

Under Customs Act, 1962:

1.1 The section 3 of the Customs Act, 1962 deals with Classes of officers of Customs and reads as under:-

Section 3.- Classes of officers of customs.–

There shall be the following classes of officers of customs, namely.–

(a) Chief Commissioners of Customs;

(b) Commissioners of Customs;

(c) Commissioners of Customs (Appeals);

(cc) Joint Commissioners of Customs;

(d) Deputy Commissioners of Customs;

(e) Assistant Commissioners of Customs or Deputy Commissioner of Customs

(f) such other class of officers of customs as may be appointed for the purposes of this Act.

1.2 Under Central Excise Act, 1944,

the term ―Central Excise Officer‖ has been defined under clause (b) of Section 2. In the definition itself, various classes of the officers have been mentioned. It reads as under:-

“Central Excise Officer” means the Principal Chief Commissioner of Central Excise, Chief Commissioner of Central Excise, Principal Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act.

1.3 Under the Finance Act, 1994, vide Rule 3 of the Service Tax Rules, 1994,

the CBEC has been empowered to appoint such Central Excise officer as it thinks fit for exercise of powers under Chapter V of the Finance Act, 1994. It may also specify the jurisdiction of such officer as well as specify taxable service in respect of which these officers shall exercise such powers.

1.4 Since there is no concept of specific category of ‗Service Tax officers‘, certain officers who exclusively deal with Service Tax matters such as Principal Chief Commissioner of Service Tax, Chief Commissioners of Service Tax, Principal Commissioners of Service Tax, Commissioners of Service Tax, Commissioners of Service Tax (Audit), and Commissioners of Service Tax (Appeals) , and all the officers subordinate to such officers has been appointed as Central Excise Officers by issuing notification under Rule 3 of the Service Tax Rules, 1994.

1.5 Further, they are large number of officers of Central Excise Commissionerates, Commissioner of Central Excise (appeals), officers of various Directorates such as Audit/ DGCEI, officer of Large Taxpayer Units, who also attend to service tax works in addition to Central Excise work, have also been appointed as Central Excise Officers‘ for the purpose of Chapter V of the Finance Act, 1994 by issuing a notification under the Rule 3 of the Service Tax Rules, 1994.

3. Appointment of officers of Customs / Central Excise Officer

1.6 The legal provisions dealing with appointment and powers of officer of Customs / Central Excise Officer under Customs, Central excise and Service Tax laws have been mentioned in the following paragraphs.

1.7 Under Custom Act, 1962, the provisions relating to Appointment of Officer of Customs and Power of officers of Customs are contained in Section 4 and Section 5 respectively. The section 4 and 5 of the Customs Act, 1962, as amended vide Finance Act, 2014, read as under:-

Section 4:- Appointment of officers of customs.

(1) The Board may appoint such persons as it thinks fit to be officers of customs.

(2) Without prejudice to the provisions of sub-section (1), the Board may authorise a Principal Chief Commissioner of Customs, Chief Commissioner of Customs or principal Commissioner of Customs or a Commissioner of Customs or a Joint or Assistant Commissioner of Customs or Deputy Commissioner of Customs to appoint officers of customs below the rank of Assistant Commissioner of Customs.

Section 5 of the Customs Act, 1962:- Powers of officers of customs. –

(1) Subject to such conditions and limitations as the Board may impose, an officer of customs may exercise the powers and discharge the duties conferred or imposed on him under this Act.

(2) An officer of customs may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of customs who is subordinate to him.

(3) Notwithstanding anything contained in this section, a Commissioner (Appeals) shall not exercise the powers and discharge the duties conferred or imposed on an officer of customs other than those specified in Chapter XV and section 108.

1.8 In exercise of powers under section 4 of the Custom Act, 1962, several notifications have been issued by CBEC. The details of important notifications issued under Section 4 or under Section 4 read with Section 5 of Customs Act, 1962 are given in Table below.

Table 1

3.4 In the various sections of the Customs Act, 1962, the term “Proper officer” is used very frequently. The term “Proper Officer” has been defined under clause (34) of Section 2 of the Customs Act, 1962 and it reads as under:-

“proper officer”, in relation to any functions to be performed under this Act, means the officer of Customs who is assigned those functions by the Board or the Commissioner of Customs.

3.5 The provision of this section came under scrutiny of the Hon‘ble Supreme Court in the case of the Commissioner of Customs vs Syed Ali and anothers. In this case, Hon‘ble Supreme Court examined the question of validity of the demands raised by virtue of re-assessment orders passed by the Collector of Customs (Preventive) Mumbai, pursuant to the issue of show cause notices under Section 17 and 28 of the Act, 1962.

3.6 While dismissing the appeal filed by the Revenue Department, Hon‘ble Supreme Court held as under:-

“ that the Collector of Customs (Preventive), not being a “proper officer” within the meaning of Section 2(34) of the Act, was not competent to issue show cause notice for re-assessment under Section 28 of the Act. Nothing has been brought on record to show that the Collector of Customs (Preventive), who had issued the show cause notices was assigned the functions under Section 28 of the Act as “proper officer” either by the Board or the Collector/Commissioner of Customs. We are convinced that Notifications No. 250-Cus and 251-Cus., both dated 27th August, 1983, issued by the Central Government in exercise of the powers conferred by sub-section (1) of the Section 4 of the Act, appointing Collector of Customs (Preventive) etc. to be the Collector of Customs for Bombay, Thane and Kolaba Districts in the State of Maharashtra did not ipso facto confer jurisdiction on him to exercise power entrusted to the “proper officers” for the purpose of Section 28 of the Act.

3.7 The implication of the above said judgment had a serious revenue implication as all the SCN issued by the DRI/Commissioner of Customs (Preventive) under Section 28 of the Customs Act, 1962 became legally unsustainable. Consequent to the this judgment, the Board issued an Instruction F.No.437/143/2009-Cus.IV(pt) dated 15.04.2011 directing the field formations to examine pending Show Cause Notices and wherever these are not hit by time limitation to get these issued afresh by the jurisdictional Commissionerates.

3.8 Further, as a prospective remedial measure, in terms of Section 2(3 4) of the Customs Act, 1962, the Board issued Notification No. 44/2011-Customs (NT), dated 6.7.2011. By virtue of this Notification, officers of Directorate General of Revenue Intelligence (DRI), Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence (DGCEI) and Central Excise Commissionerates were assigned the functions of the ‗proper officer‘ for the purposes of Sections 17 and 28 of the said Act.

3.9 To address the issue of validity of Show Cause Notices issued prior to 06.07.2011, which was likely to have adversely impacted by the said judgment of the Hon‘ble Supreme Court, a suitable legislative change was made vide the Customs (Amendment and Validation) Act, 2011 on 16.09.2011 ( Act No.14 of 201 1). The said Act amended Section 28 of the Customs Act, 1962 by inserting clause (11), which reads as follows:

“(11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any court of law, tribunal or other authority, all persons appointed as officers of Customs under sub-section (1) of section 4 before the sixth day of July, 2011 shall be deemed to have and always had the power of assessment under section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section.”

3.10 Accordingly, as per the amended Section 28 of the Customs Act, 1962, Show Cause Notices issued prior to 06.07.2011 by officers of Customs, which would include officers of Commissionerates of Customs (Preventive), Directorate General of Revenue Intelligence (DRI), Directorate General of Central Excise Intelligence and similarly placed officers stand validated since these officers are retrospectively recognized as ‗proper officers‘ for the purpose of Sections 17 and 28 of the said Act.

3.11 Later by issuing the notification No. 40/2012-Customs (NT), dated 2.5.2012, the Board specified proper officers for each section wherever the word ―proper officer‖ were used in the Customs Act, 1962. The details of notification issued in terms of section 2 (34) are detailed in the Table 2 below.

Table 2

3.12 The proper officer notified vide Notification No. 40/2012-Customs (NT), dated 2.5.2012  as amended by notification No. 53/2012-Customs(NT), dated 21.6.2012 ; 76/2012-Customs (NT), dated 27.8.2012 and No. 12/2014-Customs (NT), dated 17.02.2014, is as given in Table under:-

Table 2 A

3.13 vide Notification No. 44/2011-Customs (NT), dated 6.7.2011 as amended vide notification No. 53/2012-Customs (NT), dated 21.06.2012. , the Board has assigned the functions of the proper officer to the following officers of DRI/DGCEI/Customs preventive Commissionerates /Central Excise Commissionerates for the purposes of section 17 and section 28, and Section 28 AAA of the Custom Act, 1962.

Table 2 B

Under Central Excise Act, 1944

3.14 As discussed in Para 3.2 above, in the Central Excise Act, 1944, in Section 2(b), the term “Central Excise Officer” has been defined. This provision empowers Board to entrust any other officer of the Central Excise Department or any person (including an officer of the State Government) with any of the power of the Central Excise officer under Central Excise Act, 1944. The section 2(b) of the Central Excise Act, 1962 reads as under:-

“Central Excise Officer” means the Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act.

3.15 Further, Rule 3 of the Central Excise Rules, 2002 empower Board to appoint any person to be Central Excise officer as well as specify power to be exercised by such officer. Further, it also empowers Board to specify jurisdiction. The Rule 3 of the Central Excise Rules, 2002 reads as under:-

RULE 3. Appointment and jurisdiction of Central Excise Officers. —

(1) The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer to exercise all or any of the powers conferred by or under the Act and these rules.

(2) The Board may, by notification, specify the jurisdiction of a Principal Chief Commissioner of Central Excise or Chief Commissioner of Central Excise, as the case may be, Principal Commissioner of Central Excise or Commissioner of Central Excise as the case may be, or Commissioner of Central Excise (Appeals) for the purposes of the Act and the rules made there under.

(3) Any Central Excise Officer may exercise the powers and discharge the duties conferred or imposed by or under the Act or these rules on any other Central Excise Officer who is subordinate to him.

3.16 In term of section 2(b) of the Central Excise Act, 1944 and rule 3 of the Central Excise Rules, 2002, several notifications have been issued by the Board. The details of the important notifications issued by the Board are given in Table-3 below.

Table-3

Under Chapter V of the Finance Act, 1994

3.17 In respect of Service Tax, the Rule 3 of the Service Tax Rules, 1994 deals with appointment of officers for the purpose of exercise of powers under Chapter V of the Finance Act, 1994. There is no special category of Service tax officer as it exists in case of customs or Central Excise. The Rule 3 of the Service Tax Rules, 1994 reads as under:-

Rule 3 of Service Tax Rules, 1994. Appointment of officers –

The Central Board of Excise and Customs may appoint such Central Excise Officers as it thinks fit for exercising the powers under Chapter V of the Act within such local limits as it may assign to them as also specify the taxable service in relation to which any such Central Excise Officers shall exercise his powers.

3.18 The term “Central Excise Officers” has not been defined under the Finance Act, 1994 (Chapter V) or under Service Tax Rules, 1994. However, under Clause (55) of the Section 65B of the Finance Act, 1994, there is provision which provides that “words and expressions used but not defined in this Chapter and defined in the Central Excise Act, 1944 or the rules made there under, shall apply, so far as may be, in relation to service tax as they apply in relation to a duty of excise”. Therefore, the meaning of term ―Central Excise Officer‖ has to be seen in terms of section 2(b) of the Central Excise Act, 1944.

3.19 In exercise of powers under section 2(b) of the Central Excise Act, 1 944read with section 65B (55) of the Finance Act, 1994, Rule 3 of the Central Excise Rules, 2002 and Rule 3 of the Service Tax Rules, 1994, the Board has issued two notifications mentioned in Table-4 below

Table-4

4. Legal provisions for empowering officers of Central Government or State Government or a local authority to exercise powers under the Customs Act, 1962/Central Excise Act, 1944/Finance Act, 1994

4.1 Under Section 6 of the Customs Act, 1962, the Board has power to entrust any officer of the Central or the State Government or a local authority any function of the Board or any officer of Customs. This can be done by issuing a notification. The section 6 of the Customs Act, 1962 reads as under:-

Section 6 of the Customs Act, 1962:- Entrustment of functions of Board and customs officers on certain other officers. –

The Central Government may, by notification in the Official Gazette, entrust either conditionally or unconditionally to any officer of the Central or the State Government or a local authority any functions of the Board or any officer of customs under this Act.

4.2 Under Section 6 of the Customs Act, 1962, Central Government has issued several notifications empowering officers of police of states having international border, paramilitary organization such as BSF, ITBP, CRPF etc at border as officers of custom and giving them power to search, seizure and arrest under the Customs Act, 1962. The details of notifications issued under Section 6 of the Customs Act, 1962 are given in Table-5 below.

Table-5

Note: As the Government publications or CBEC website does not contains the details of the above said notification, the above said details have been collected from available private publication.

4.3 Under Central Excise Act, 1944, under Section 2(b), the Board has power to invest any person (including an officer of the State Government) with any of the power of Central Excise officer under this Act. The detail of a notification issued so far is given in Table below.

Table-6

5. Legal provisions under various other allied Acts empowering officers of Customs, Central Excise and Service Tax department to exercise powers under these Acts

5.1. In several Acts, administered by Ministries other than the Ministry of Finance, our departmental officers (i.e. the officer of Customs or the Central Excise officers) have been empowered to exercise certain powers under these Acts. As the number of such allied Actsis fairly large, this topic will be discussed in more details in separate E-book. For the purpose of illustration, two specific Acts, enacted rather recently,have been discussed in the following paragraphs.

Chemical Weapon Convention Act, 2000

5.2. For the Chemical Weapon Convention Act, 2000 (No. 34 of 2000), the Ministry of Chemical and Fertilizers (Department of Chemical and Petro-Chemicals) is the administrative Ministry. Under this Act, vide notification S.O. 1491 (E), dated 13.09.2006, the officers of Directorate of Revenue Intelligence (DRI) of the level of Intelligence Officer (IO) and above, have been appointed as enforcement officer.

5.3. The notification S.O. (E), dated 13.09.2006 reads as under:-

In exercise of the powers conferred by Sub-section (1) of Section 9 read with Sub-section (2) of Section 6 of the Chemical Weapons Convention Act, 2000 (34 of 2000), the Central Government hereby appoints the following officers as the Officer of the National Authority, Chemical Weapons Convention and entrusts the said officers the powers and functions of Enforcement Officers for the purpose of the said Act with effect from the date of the publication of this notification in the Official Gazette, namely:-

1. Officers of the Directorate General of Revenue Intelligence of the level of Intelligence Officer and above.

2. Officers of the level of Deputy Director and above in the National Authority, Chemical Weapons Convention.

3. Officers of the rank of Assistant Industrial Advisor and above in the Department of Chemicals and Petro-chemicals.

[ F. No.40020/6/2005-Ch.I]

5.4. Further, the National Authority, Chemical Weapon Convention comprises a Chairperson and three Directors as per Notification S.O.1490 (E) dated 13.09.2006. Three Directors are,-

(i) the Joint Secretary in NACWC,

(ii) the Director General, Directorate of Revenue Intelligence, and

(iii) the Joint Secretary of the Department of Chemicals and Petrochemicals.

Cigarette and other Tobacco Product (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003

5.5. The Ministry of Health & Family Welfare is the administrative Ministry for the Cigarette and other Tobacco Product (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 [also known as COTPA, 2003). In exercise of power under COTPA, 2003, the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008 have been issued. These rules deal with statutory warning to be displayed on packing of Cigarette and other tobacco products.

5.6. Under the above said Rules, the Ministry of Health & Family Welfare has issued the Notification S.O.1866 (E), dated 30.07.2009 as amended vide Notification S.O.23 (E),dated 06.01.10. Under this notification, the officers at the level of Superintendents and above of the Customs & Central Excise department have been conferred with the power of Entry, Search and Seizure under the said provisions of COTPA. The powers given are for enforcing provisions of Section 5,which deals with prohibition of advertisement of cigarettes and other tobacco products, & Section 7, which deals with Restrictions on trade and commerce in and production, supply and distribution of cigarettes and other tobacco products. Vide Notification S.O. 1866(E) dated 30th July 2009, following officers have been empowered:-

Table 7: Authorized officers

6. Delegation of powers

6.1 Specific provisions have been incorporated in the Customs Act, 1962/Central Excise Act, 1962 and Finance Act, 1994 where in Central Government has been given powers to delegate power of the Board or powers of other senior officers to junior Gazetted officers by issuing notification in the official Gazette. In exercise of these powers, several notifications have been issued by the Central Government. It is important for the department officers to have idea about the various notifications so issued to have a correct perspective.

6.2 Summary of legislative provisions dealing with delegation of powers under Customs Act, 1962/Central Excise Act, 1944/Finance Act, 1994 along with notifications issued are summarized in table below:-

Section 152 of the Customs Act, 1962: Delegation of Powers

The Central Government may, by notification in the Official Gazette, direct that subject to such conditions, if any, as may be specified in the notification –

(a) any power exercisable by the Board under this Act shall be exercisable also by a Chief Commissioner of Customs or a Commissioner of Customs empowered in this behalf by the Central Government;

(b) any power exercisable by a Commissioner of Customs under this Act may be exercisable also by a Joint Commissioner of Customs or an Assistant Commissioner of Customs or Deputy Commissioner of Customs empowered in this behalf by the Central Government;

(c) any power exercisable by a Joint Commissioner of Customs under this Act may be exercisable also by an Assistant Commissioner of Customs or Deputy Commissioner of Customs empowered in this behalf by the Central Government;

(d) any power exercisable by an Assistant Commissioner of Customs or Deputy Commissioner of Customs under this Act may be exercisable also by a Gazetted Officer of Customs empowered in this behalf by the Board.

6.3. The notification issued by the Central Government under Section 152 of the Customs Act, 1962 and power delegated and the officer to whom the power has been delegated is summarized in the Table-8below.

Table-8

Under Central Excise Act, 1944

6.4. Section 37 A of the Central Excise Act, 1944 contains provisions for delegation of powers of Board or other higher authorities to lower authorities. The section 37 A of the Central Excise Act, 1944 reads as under:-

Delegation of powers: The Central Government may, by notification in the Official Gazette direct that subject to such conditions, if any, as may be specified in the notification ²

a) any power exercisable by the Board under this Act may be exercisable also by a Principal Chief Commissioner of Central Excise or Chief Commissioner of Central Excise , or a Principal Commissioner of Central Excise or Commissioner of Central Excise empowered in this behalf by the Central Government;

b) any power exercisable by a Principal Commissioner of Central Excise or Commissioner of Central Excise under this Act may be exercisable also by a Joint Commissioner of Central Excise or an Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise empowered in this behalf by the Central Government;

c) any power exercisable by a Joint Commissioner of Central Excise under this Act may be exercisable also by an Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise empowered in this behalf by the Central Government; and

d) any power exercisable by an Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under this Act may be exercisable also by a gazetted officer of Central Excise empowered in this behalf by the Board.

6.5. The notifications issued by the Central Government under Section 37 A of the Central Excise Act, 1944. Power delegated and the officer to whom it has been delegated are summarized in the Table-9 below.

Table-9

Under Finance Act, 1994

6.6. Under Section 83 of the Finance Act, 1994, the provisions of the Section 37A of the Central Excise Act, 1944 has been extended to service tax as they apply in relation to a duty of excise. In exercise of power under Section 37 A of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, the Central Government has issued the following notification summarized in the Table-10 below:-

Table-10

ote: In this E-book, attempts have been made to know about Classes, Appointment of officers of Customs/Central Excise Officer under Indirect Tax Laws. It is expected that it will help the new entrants into the service. Though all efforts have been made to make this document error free, but it is possible that some errors might have crept into the document. If you notice any errors or if you have any suggestion to improve this document, the same may be brought to the notice to the NACEN, RTI, Kanpur on the Email addresses: rtinacenkanpur@yahoo.co.in or goyalcp@hotmail.com (Email address of ADG, RTI, NACEN, Kanpur). This may not be a perfect E-book and all are requested to assist us to make it better.