'DRRA staff cannot act like excise officer'

In a landmark judgement, the Customs, Central Excise and Sales Tax Appellate Tribunal, Islamabad has ruled that the staff of Directorate General of Revenue Receipt Audit (DRRA) is not authorised to operate as excise officers and have no jurisdiction to enter premises of an industrial unit. They can not get hold of equipment/stock or books of accounts.
Syed Sultan Ahmed, Member Judicial has dismissed a case framed by DRRA against Bestway Cement Limited saying that the DRRA staff have no authority to obtain taxpayer's record through the Collectrates of Sales Tax and federal Excise.
While interpreting SRO. 1195(I)/90 (charter and functions of Auditor General of Pakistan), tribunal held that President of Pakistan has empowered the Auditor General to audit the receipt of federal government and not the record of the industrial units licensed under the Central Excise Laws. Thus the whole exercise conducted by the DRRA in this particular case is quorum non-judice.
The tribunal has observed that audit of unit was done by staff of DGRRA, Lahore which is the staff of DRRA. It is a branch of Auditor General of Pakistan and its officers are neither central excise officers under Central Excise Act nor they are authorised by the collector of central excise concerned under Central Excise Rules to have access to premises, equipment, stocks and accounts of any licensed premises. They do not even fall in the category of officers mentioned in section 15 of the Central Excises Act, 1944 who are required to assist central excise officers in the execution of the aforesaid Act.
Staff of DRRA is non-existent authority under the Central Excises Act. Such a non-existent authority cannot have access to the books of accounts and other record under the Central Excise Laws.
According to details, DRRA staff conducted audit of the unit and detected that raw material was short-accounted, which resulted in short-payment of central excise duty. The Collector, Adjudication said that the unit has not properly maintained record and committed procedural lapses. He imposed penalty and warned the unit to properly maintain record.
Feeling aggrieved of the order-in-original, the unit filed an appeal with the tribunal. Unit observed that the department was not justified in holding that RT-3 for the period July Sept, 1998 was not properly maintained when evidence pointed to the contrary.
That the department was not justified in law in imposing penalty under rule 210 of he Central Excise Rules, 1944 in peculiar circumstances of the case. After hearing both the sides, tribunal held that no lapse on the part of the unit was found. If this was the situation then there was no justification to impose any penalty. This aspect is enough to hold that the imposed order is not tenable in law.
The instant case the audit was got conducted by audit party of DRRA. The officers of AG office are neither central excise officers nor they are authorised by the collector of central excise to have access to premises and record of the taxpayers. They do not even fall in the category of officers who are required to assist central excise officers.
It becomes vivid from SRO.1195(I)/90 that the President has required the Auditor General of Pakistan to audit the receipt of the federal government and not the record of the industrial units licensed under the excise laws, the tribunal added.