2015 (11) TMI 838 - HC - Service Tax

Power to conduct service tax audit - Petitioner apprehends that there is likelihood of a statutory audit being conducted in the course of excise of jurisdiction of access to a registered premises under Rule 5A of the Service Tax Rules, 1994 - Held that - petitioner is required to comply with Rule 5A of the Rules in as much as providing access to its registered premises so as to assist the audit party in discharge of duties assigned as per departmental instructions. Even according to learned counsel Rule 5A of the Rules does not permit conducting an Audit but only providing access to the registered premises as also to the documents demanded for scrutiny by the Audit party. Therefore, the apprehension of the petitioner that audit team is likely to conduct an audit at the registered premises of the petitioner under the Service Tax Rules, is misconceived - Decided against appellant.

Summary

Issues:
1. Apprehension of statutory audit under Rule 5A of the Service Tax Rules, 1994.

Analysis:
The petitioner filed a petition apprehending a statutory audit being conducted at their registered premises under Rule 5A of the Service Tax Rules, 1994. The notice indicated the Internal Audit Group No. LG-I would conduct an audit for the year 2010-2011 and requested certain documents to be furnished. The notice also emphasized the need for full cooperation and availability of records during the audit. However, the court noted that Rule 5A does not permit conducting an audit but only provides access to registered premises and documents for scrutiny by the audit party. The court rejected the petitioner's apprehension that an audit would be conducted at their premises, clarifying that the audit team's role is limited to accessing the premises for document scrutiny as per departmental instructions.

This judgment clarifies the distinction between a statutory audit and providing access under Rule 5A of the Service Tax Rules. It emphasizes that Rule 5A does not authorize conducting an audit but only grants access to registered premises for document scrutiny. The court rejected the petitioner's apprehension of a statutory audit, affirming that the audit team's function is limited to accessing premises for document inspection in compliance with departmental instructions.