Bharat Raichandani Advocate

Bharat Raichandani Advocate

Section 14 of CEA, 1944 - Power to summon persons to give evidence and produce documents in inquiries under this Act Section 73 of FA, 1994 - Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded Section 73A of FA, 1994 - Service Tax Collected from any person to be deposited with Central Government Section 73B of FA, 1994 - Interest on amount collected in excess Section 73C of FA, 1994 - Provisional attachment to protect revenue in certain cases

Section 73D of FA, 1994 - Publication of information in respect of persons in certain cases Section 74 of FA, 1994 - Rectification of mistake Section 75 of FA, 1994 - Interest on delayed payment of service tax Section 83A of FA, 1994 Power of Adjudication Section 87 of FA, 1994 - Recovery of any amount due to Central Government

F.No 137/39/2007-CX-4 dated 26-2-2007 At first instance: For calling for information/documents normally the mode of communication should be either in the form of a telephone call or by way of sending a simple letter. Second instance: Issuance of summons should be resorted to, only when the above mentioned modes of communications are found to be ineffective or are likely to jeopardize revenue interest or when it is essential to ensure personal presence of the person concerned to tender evidence or record statement in connection with a service tax evasion case;

Letters/Notices are not summons Must be replied Facts need to be put properly

Statement u/s 14 Facts only not law Can be used against person making such statement Retraction

Recovery of money No power

Introduced on 13.05.2005 Pari materia Section 33 of Central Excise Act, 1944 What would be the position prior to 13.05.2005? Notification No. 30/2005-ST issued on 10.08.2005.

Joint Commissioner of Central Excise Above Rs. five lakhs but not exceeding Rs. fifty lakhs Additional Commissioner of Central Excise Above Rs. twenty lakhs but not exceeding Rs. fifty lakhs Commissioner of Central Excise Without limit

ISSUANCE OF SHOW CAUSE NOTICE Finance Act, 1994 Section 73 Recovery of service tax not levied, or not paid or short levied or short paid or erroneously refunded Central Excise Officer has to issue show cause notice within one year from the relevant date Time period to issue Show Cause Notice is 5 years in case of fraud, collusion, willful mis-statement, suppression of facts and contravention of any of the provisions with an intent to evade payment of service tax by the assessee

MEANING OF RELEVANT DATE relevant date means (a) where service tax return is filed the date on which it is filed is the relevant date; (b) where no periodical return is filed, the last date to file such return under the said rules; (c) in any other case, the date on which the service tax is to be paid; (d) in case of provisional assessment the date of adjustment after the final assessment; (e) in case of erroneous refund the date of refund.

SOME ISSUES Normal period of limitationo Period April, 2005 to September, 2005 when should show cause notice be issued to be within normal period of time. Relevant date for export of service - date of payment OR date of receipt of payment OR date of payment of service tax OR date of raising invoice? Payment of service tax under section 66A relevant date for refund of service tax date of import or date of payment of service tax

SHOW CAUSE NOTICE Relied upon documents to be sought Counter each allegation separately General rebuttal not sufficient Cross examination Time bar

SERVING OF SCN SECTION 37C Mere issue not sufficient - to be served Refusal to accept notice is due service of notice. In case of partnership firm, SCN can be issued to any partner. In case of company, SCN can be issued to any of director, secretary or principal officer. Notice to agent is valid.

PROVISIONAL ATTACHMENT Section 73C: During the pendency of proceeding under section 73/ 73A, the Central Excise Officer can pass an order to provisionally attach the property of the assessee The Central Excise Officer has to take prior approval from the Commissioner of Central Excise Provisional attachment shall have effect for the period of 6 months from the date of order. Chief Commissioner of Central Excise have discretionary power to extend the attachment for the period upto 2 years. However, he must record reasons in writing.

Notification No.30/2008-ST dated 01.07.2008 has been issued under subsection (1) and sub-section (2) of Section 94 read with Section 73C of the Finance Act, 1994 notifying the Service Tax (Provisional Attachment of Property) Rules, 2008. The said rules provide for the conditions and procedure to be followed for provisional attachment of property.

Circular No. 103/6/2008-ST dated 1st July, 2008. The following types of offences committed by a service provider or an exporter may be considered for provisional attachment of property:- Provision of service w/o invoice and without payment of tax; Provision of service without declaring the correct value, where a portion of value in excess of invoice price, is received by him but not accounted for in books of account.

Circular No. 103/6/2008-ST dated 1st July, 2008. Taking of Cenvat credit without the receipt of goods/services Taking of Cenvat credit on non- genuine invoices Issue of service tax invoices, without providing or to be providing a taxable service, as specified in the said invoice, Claiming of refund or rebate in a fraudulent manner such as on non genuine invoice

RECTIFICATION OF MISTAKE Central Excise Officer under Section 74 of the Finance Act, 1994 can rectify a mistake apparent on record within a period of 2 year from the date of the order passed. Central Excise Officer can make an amendment on his own motion; or if any mistake is brought to his notice by the assessee or the Commissioner of Central Excise or the Commissioner of Central Excise (Appeals). Amendment to enhance the liability or reduce the refund can only be after giving a notice to the assessee and after giving a reasonable opportunity of being heard Where an amendment is made under this section, an order shall be passed in writing by the Central Excise Officer concerned.

SOME ISSUES Applied for rectification of mistake under section 74 No appeal filed under section 85 What is the position? Appeal is time barred beyond condonable period What happens?

Section 76- penalty for failure to pay tax Minimum Rs. 100/- per day or, 1% of such tax per month, whichever is higher. Maximum 50% of service tax payable. Section 77- Penalty for contravention of rules and provisions of Act for which no penalties is specified elsewhere- general penalty can extend to Rs. 10,000/-.

Section 78- Penalty for suppressing, etc., of value of taxable services- Penalty under this section will be imposed where any service tax has not been levied or paid or short-levied or short-paid or erroneously refunded, by reason of- Fraud; or Collusion; or Willful mis statement; or Suppression of facts; or Contravention of any of the provisions of this chapter or of the rules made thereunder with an intent to evade the payment of service tax.

Section 78- Penalty for suppressing, etc., of value of taxable services- Equal to the amount of service tax so not levied or paid or short-levied or short-paid or erroneously refunded. Penalty is reduced to 25 % if paid within 30/90 days. If penalty is payable under this section, the provisions of section 76 shall not apply. Section 80- Reasonable Cause No penalty is imposable if assessee proves that there was reasonable cause for the failure.

REVISION (BEFORE 19-8-2009) Section 84 of the Finance Act, 1994 Commissioner of Central Excise can revise any order passed by the adjudicating authority subordinate to him An opportunity of being heard must be given to the assessee. Revision cannot be done in case the appeal against the such issue is pending before the Commissioner of Central Excise (Appeals). Order cannot be passed after the expiry of two years from the date on which the order sought to be revised has been passed.

SECTION 84 (FROM 19-8-2009) Commissioner of Central Excise can on his own motion, call for & examine records of any order passed by the adjudicating authority subordinate to him, to ascertain the legality & propriety of such decision or order. An order under this Section shall be made within 3 months from the date of communication of the order of the adjudicating authority. Inserted by amendment in Budget 2009-2010.

APPEAL AGAINST ORDER-IN- ORIGINAL Section 85 for an appeal against the order of an adjudicating authority subordinate to Commissioner Normal period of limitation to file appeal- 90 days 60 days Cenvat credit Extended period of limitation: 90/60 days, as the case may be

SOME ISSUES Mr. X received a SCN from the Assistant Commissioner (Service Tax) Can Mr. Y, Mr. X s friend, philosopher and guide appear before the authorities? Section 35Q authorized representative

SOME ISSUES Can commissioner (appeals) condone delay beyond period of 30 days? Singh enterprises 2008 (221) ELT 163 (SC)

SOME ISSUES Can department file appeal under section aggrieved person for the purpose of filing an appeal Narendra P Unrao 15 ELT 275 (T)

SOME ISSUES Power of commissioner (appeals) to remand matter back to the adjudicating authority MIL India Limited 2007 (210) ELT 188 (SC)

SOME ISSUES PRIOR TO 18.04.2006 11D(1A) w.e.f. May 2008, applied to exempted goods also. No such provision under 73A to apply to exempted services. 11DD not borrowed. Hence no interest on 11D amount Interest is a substantive provision - India Carbon (SC) and VVS Sugar (SC).

SOME ISSUES Section 18 not borrowed as such. Since it relates to power to search and arrest. However, Section 82 provides for search as no arrest can be made even in case evasion of service tax. Section 31 to 32P not borrowed. Hence, no settlement of case in case of service tax.