2015 (3) TMI 625 - HC - Central Excise

Validity of summons issued - Powers under Section 14 - Wrong utilization of CENVAT Credit - STL Company is operating on papers only and has no physical existence, therefore no services could be provided by the said company to petitioner-Company - petitioner received various summons/ notice asking petitioner s Directors to appear before Excise Authorities in enquiry under Section 14 of Act, 1944 - Held that - The custom authorities, have statutory right to examine persons and to summon them to give evidence and produce documents in connection with enquiry relating to any goods or services. In absence of any material on record, i.e., pleading with due support of the documents that the summoning for examination of persons etc. is on account of any malice, coercion, duress or undue pressure, the statutory power exercised by authorities is not to be lightly interfered in writ jurisdiction under Article 226 of the Constitution. This provision is not confined to the persons or documents within the territorial jurisdiction of concerned Officer. The purpose of summoning involves multifarious reasons which includes the inquiry into the truth of transactions in which the persons who are summoned are or may be involved or otherwise have some information etc. The mere fact that the letters sent by the Excise authorities requiring certain documents have been replied or the documents have been supplied would not entitle individuals not to be summoned for the purpose of giving evidence or otherwise examination by the Central Excise Officer. The mere order of summoning for giving evidence or to participate in enquiry issued by Central Excise authorities under Section 14 of Act, 1944, in our view, is not to be interfered only on the ground that it has submitted reply to earlier letters and therefore need not appear in person before the authorities concerned. When there is a specific power contained in the Act and there is nothing on record to show that it has been exercised with male fide etc., no interference at this stage is called for. - Decided against assessee.

Summary

Issues:
Challenging various orders summoning petitioners by Central Excise authorities under Section 14 of Central Excise Act, 1944.
Petitioner's claim of cooperation and submission of demanded documents, yet being required to appear for inquiry.
Validity of summoning petitioners for inquiry under Section 14 of the Act.
Comparison with a Division Bench judgment and its applicability to the current case.

Analysis:
The petition challenged orders summoning petitioners for inquiry by Central Excise authorities under Section 14 of the Central Excise Act, 1944. The petitioner argued that despite supplying requested documents, they were required to participate in the inquiry, deeming the summoning as arbitrary. The petitioner cited a Division Bench judgment in Dr. Lalji Singh Vs. National Commission, emphasizing cooperation and document submission as grounds for non-summoning. However, the Court examined the statutory power conferred by Section 14, allowing authorities to summon individuals for evidence or document production, irrespective of prior document submission.

The petitioner, a company engaged in power sub-station work, outsourced a project to another company, claiming service tax credit. After receiving a notice for information, the petitioner complied by submitting the required details. Subsequently, Central Excise authorities summoned the petitioner's directors for inquiry, alleging improper utilization of service tax credit. The Court noted that the summoning power under Section 14 is distinct from document submission, highlighting the statutory right of authorities to examine individuals and request their presence for evidence provision.

The Court emphasized that the summoning power under Section 14 is not negated by prior document submission, as it constitutes a separate authority granted by the Act. The petitioner's reliance on the Dr. Lalji Singh judgment was deemed inapplicable, as the nature of power exercised by Central Excise authorities differed from that in the referenced case. The Court clarified that unless there is evidence of malice or coercion, interference in statutory summoning is unwarranted. The judgment dismissed the writ petition, affirming the legality of summoning petitioners for inquiry under Section 14 of the Central Excise Act, 1944.