Page 33 - ELT_1st August 2020_Vol 373_Part 3

2020 ] INDIAN CUSTOMS LAW — RECOMMENDATIONS FOR A REVAMP A71

revamp the AAR Mechanism. Its proposals in a summarized form are -
(1) Definition of the Applicant under Section 28E(c) has been proposed
to widen and aligned with the WTO’s Trade Facilitation Agreement
which will be included importers, exporters, and other persons.
(2) Definition of the Advance Ruling under Section 28E(b) is also pro-
posed to be amended and extended to other aspects.
(3) The existing Authority for Advance Ruling for Customs Act will be
redesigned as “Appellate Authority” by amending Section 28E.
(4) A new exclusive Authority for Customs called ‘The Customs Au-
thority for Advance Rulings – (CAAR)’ is proposed to be constitut-
ed.
(5) To empower the Central Government to notify cases other than
those specified in Rules by inserting Clause (f) in Section 28H(2)(C)
where Advance Ruling can be sought.
(6) Suitable amendments have been proposed to allow an applicant
where he may be represented by a duly authorized person who is a
resident in India.
(7) Definition of ‘non-resident’ as provided under the Income Tax Act,
1961 is proposed to be made applicable for the purposes of a non-
resident applicant seeking Advance Ruling.
(8) The time frame for pronouncement of an Advance Ruling is pro-
posed to be reduced to 3 months from current 6 months, etc.
Further, it is expected that these measures will correct some existing flaws as
pointed out by the ‘Tax Administration Reform Commission (TARC)’s First Re-
port dated 30th May, 2014, which are -
(1) Inordinate delays in pronouncing rulings despite a statutory limit
provided;
(2) Delayed appointment of the Chairs of the Authority;
(3) Inconsistency in decisions;
(4) Limited reach being accessible only to certain classes of taxpayers;
(5) Limited utility and precedential value of the ruling by virtue of it
being applicable to the applicant taxpayer alone and binding only
on the facts of each ruling; and
(6) Lack of accessibility, i.e. the Authority is being located at New
Delhi.
Customs & Litigation
Backlog of Cases at various forums as on 31st March, 2017
(Revealed by Economic Survey 2017-18)

Dispute Resolution Forum Number of Tax amount locked
cases pending in litigation
Customs, Excise and Service Tax Appel- 83,338 ` 1.92 lakh crores
late Tribunal - CESTAT
High Courts 14,141 ` 0.37 lakh crores
Supreme Court 2,946 ` 0.2 lakh crores
EXCISE LAW TIMES  1st August 2020  33