Appeals by the party to the First Appellate Authority (FAA) :

Section 2(45) defines “First Appellate Authority” as an authority referred to in section 79. Section 79(1) refers to the “prescribed First Appellate Authority”. Section 2 (76) defines “prescribed’’ as prescribed by the rules, regulations or by any notification issued under the Act. Presently, in the central indirect taxes, a Commissioner (Appeals) is the first appellate authority. In the states, the first appeals are decided by a Deputy Commissioner (Appeals); some states also have JC (Appeals) / ADC (Appeals).

Section 79 provides that a person who is aggrieved by a decision or order passed against him by an adjudicating authority, can file an appeal to the First Appellate Authority (FAA, for short). It is important to note that it is only the aggrieved person who can file the appeal. Also, the appeal must be against a decision or order passed under the Act. Further, as will be discussed later, some decisions or orders are not appealable (section 93).

The time limit for the party to file an appeal before the FAA is 3 months from the date of communication of the impugned order. But the FAA may condone a delay of upto one month, if he is satisfied that there was sufficient cause for such delay.

The appeal forms etc. will be prescribed by Rules being made separately.

The FAA has to follow the principles of natural justice – such as hearing the appellant, allowing reasonable adjournments (not more than 3), permitting additional grounds (if found reasonable), etc. The FAA can also make such further inquiry as may be necessary.

On conclusion of the appeal process, the FAA will pass his order (Order-in- Appeal) which may confirm, modify or annul the decision or order appealed against. The FAA can also increase the “rigour” of the order appealed against by enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit, but this can only be done after the FAA has given to the appellant a reasonable opportunity of showing cause against the proposed order. Further, if the FAA is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 51.

The Order-in-appeal has to be a “speaking order” i.e. it should state the points fordetermination, the decision thereon and the reasons for the decision.

The law provides an advisory (“where it is possible to do so”) time limit of 1 year for the FAA to decide the appeal.

Copies of the Orders passed by the FAA will be sent to the appellant, the adjudicating authority, the CGST Commissioner, and the SGST Commissioner. National Academy of Customs Excise and Narcotics (NACEN) Page 227