Directorate General of Vigilance
Customs & Central Excise
2nd & 3rd Floor, Hotel Samrat,
Kautilya Marg, Chanakya Puri, New Delhi-110021
F.No.V.500/39/2015 Dated /04/2015
To,
All Principal Chief Commissioners/ Chief Commissioners of Central Excise,
All Principal Chief Commissioners/ Chief Commissioners of Central Excise & Customs,
All Principal Chief Commissioners/ Chief Commissioners of Service Tax,
All Principal Chief Commissioners/ Chief Commissioner of Customs,
All Principal Chief Commissioners/ Chief Commissioners of Customs (Preventive),
All Principal Directors General/ Directors General/Principal Chief Commissioner (AR)
Sub: Preventive Vigilance Action of scrutiny of Adjudication/ Appeal Orders — clarification
regarding
Sir/ Madam,
Reference is invited to DG (Vigilance) letters F.No.V.500/100/2009-Pt.1 dated 24.02.2010
and 27.04.2010 regarding scrutiny of adjudication/appellate orders from vigilance angle as a
preventive vigilance action, in terms of which the review committees were advised to undertake
scrutiny of adjudication/appellate orders from vigilance angle as per the criteria laid down by the
Supreme Court in its decision in the case of K K Dhawan as noted in CVC Circular No. 39/11/07
dated 01.11.2007.
2. It need not be overemphasized that the adjudicating and appellate authorities are required
to pass fair, judicious and legally sustainable speaking orders which can withstand judicial scrutiny
at higher appellate fora. Apprehensions have, however, been raised that the above instructions
have created a 'fear of vigilance' amongst the field officers, due to which some of the adjudicating/
appellate authorities are resorting to confirmation of demands through non-speaking orders/
without following judicial discipline/ non consideration of pleas put forth by the parties, etc. merely
due to a fear of coming under vigilance scrutiny. Such unjust orders, besides attracting adverse
judicial scrutiny, cause harassment to the trade and undermine the efforts of the Department in
providing a non-adversarial tax regime to taxpayers.
2
3. The matter has been examined. It is noted that since 1997, only 18 adjudication orders have
been taken up for scrutiny by the Directorate General of Vigilance. This indicates that on an
average, only one case in a year i.e. 0.001% of the total quasi-judicial orders passed in the
department have been taken up for vigilance scrutiny. The fear of vigilance action against
adjudicating/ appellate authorities in respect of adjudication/ appeal orders, therefore, appears to
be totally unfounded and misplaced. With a view to remove any such misgiving/ 'fear of vigilance'
in adjudication/ appeal matters, further clarifications are being issued as under.
4. The instructions of this Directorate dated 24.02.2010 and 27.04.2010 regarding scrutiny of
adjudication/appellate orders from vigilance angle were issued based on a suggestion of CVC made
in 2009 after the vigilance audit of Customs & Central Excise Department, wherein CVC had
suggested that as a measure of preventive vigilance, adjudication orders involving a sum of Rs.50
lakh and above should be examined from the vigilance angle also. It was also informed that while
making any such scrutiny of adjudication/ appellate orders from vigilance angle, the criteria
referred in CVC's Circular 39/11/07 dated 01.11.2007 (copy enclosed) and as laid down by Hon'ble
Supreme Court in the case of Union of India and Others vs. KK Dhawan (copy enclosed) must be
kept in consideration for examining the lapses of officers exercising quasi-judicial powers to see
whether any of the said criteria was attracted or not. For reference, the criteria prescribed by the
Hon'ble Supreme Court are reproduced below:
• Where the officer had acted in a manner as would reflect on his reputation for integrity or
good faith or devotion to duty
• If there is prima facie material to show recklessness or misconduct in the discharge of his
duty
• If he has acted in a manner which is unbecoming of a government servant
• If he had acted negligently or that he omitted the prescribed conditions which are essential
for the exercise of the statutory powers
• If he had acted in order to unduly favour a party
• If he had been actuated by corrupt motive however, small the bribe may be because Lord
Coke said long ago "though the bribe may be small, yet the fault is great"
3
5. Adjudication and Appellate Orders are examined by Review Committees of Chief
Commissioners or Commissioners comprehensively, including from the angle of legality and
propriety, with a view to take a decision whether the orders are acceptable or to be appealed
against in higher appellate fora. Examination of orders from vigilance angle is also a part of this
exercise. It is, however, clarified that an adjudication/ apellate order is not required to be referred
by the Review Committee for further vigilance scrutiny merely on the ground of it being an antirevenue
order or having some legal infirmities (for which review and appellate remedy is available),
unless there are genuine reasons to doubt the bonafides of the decision or where the order shows
a conspicuous violation of the procedures involved or recklessness, etc., as per the above criteria
laid by Hon'ble Supreme Court in the KK Dhawan's judgment and as circulated by CVC in Circular
No.39/11/07 dated 01.11.2007.
6. It is expected that senior officers in the field, given their vast experience, would be able to
distinguish between the orders warranting scrutiny from vigilance angle and those which do not.
This issues with the approval of Chairman, CBEC.
sd/-
(Vanaja Sarna)
Director General (Vigilance)
Encl:
1. Hon'ble Supreme Court decision in the case of Union of India and Others vs. KK Dhawan.
2. CVC Circular No.39/11/07 dated 01.11.2007
