2019 (9) TMI 284 - HC - Service Tax

Recovery of amount due to Central Government - threat of coercive action - the second respondent has called upon the petitioner to remit the admitted service tax along with appropriate interest, penalty and late fee under the threat of coercive action. Since there was no compliance with the notice measures were initiated in terms of the Revenue Recovery Act. - applicability of Certificate No.1 of 2013 issued under Section 11 of the Central Excise Act, 1944 - HELD THAT - The provisions of the Finance Act, 1994 are adequate to support the action taken in the present case for recovery. No doubt, the Certificate referred to in the impugned communication states at the top 'Section 11 Certificate No.1/2012' - However, mere reference to Section 11 (without even reference to the statute) would not vitiate the Certificate itself. Clearly, the provisions of Section 87 (D) provide for the drawing-up of a certificate for tax arrears and that is what has been done in the present case. The objections raised by the petitioner are seem to hyper-technical and rejected as such - Petition dismissed.

Summary

Issues:
1. Challenge to communication for recovery of service tax dues.
2. Applicability of Central Excise Act provisions in service tax levy.
3. Validity of Certificate under Section 11 of Central Excise Act.

Analysis:
1. The petitioner, an assessee to service tax, filed returns but failed to remit the admitted liability of ?53,93,359. Respondents initiated action for recovery under the Revenue Recovery Act due to non-compliance with the notice. The petitioner challenged a communication dated 05.02.2013 seeking recovery of the amount along with interest, penalty, and late fee.

2. The petitioner contended that the communication referred to Certificate No.1 of 2013 under Section 11 of the Central Excise Act, which they argued was inapplicable to service tax levy under the Finance Act, 1994. The court examined Section 83 of the Finance Act, which does not include Section 11 of the Central Excise Act for service tax levy. However, the court found Section 87(D) of the Finance Act sufficient for recovery actions without invoking the Central Excise Act provisions.

3. The court held that the provisions of the Finance Act, 1994 were adequate for the recovery process in this case. Although the Certificate mentioned Section 11, the court deemed it non-prejudicial as Section 87(D) allowed for the preparation of a certificate for tax arrears. The court dismissed the petitioner's objections as hyper-technical, upholding the validity of the recovery action. The Writ Petition was consequently dismissed without costs, and connected miscellaneous petitions were closed.