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2022 (7) TMI 231 - HC - Service TaxPAN India Jurisdiction - Appointment of officers of Directorate General of Central Excise Intelligence as Central Excise Officers to exercise the power pan India - Validity of Notification No.22/2014- ST, dated 16.09.2014 issued by the Central Board of Excise and Customs under power conferred by clause (b) of section 2 of the Central Excise Act, 1944 (1 of 1944), read with Clause (55) of Section 65B of the Finance Act, 1994 (32 of 1994), Rule 3 of the Central Excise Rules, 2002 and Rule 3 of the Service Tax Rules, 1994 - Jurisdiction - competence of officer to issue SCN - HELD THAT - Initially, when service tax was introduced, the power to issue Show Cause Notice under Section 73 of the Chapter V of the Finance Act, 1994 was vested only with the Assistant Commissioner of Central Excise / Deputy Commissioner of Central Excise. Later Section 73 was amended and the expression Assistant Commissioner of Central Excise/Deputy Commissioner of Central Excise were substituted with Central Excise Officers - Reason why Officers form the Central Excise Department were given the task for implementing the provision relating to levy of service tax by the Parliament is because the Board did contemplate creation of a separate cadre of officers employees for implementing the provision of Chapter V of the Finance Act, 1994. The definition of Central Excise Officer in Section 2(b) of Central Excise Act, 1944 is expansive. It is clear that apart from officers specified therein from the Central Excise Department, any other officer including an officer of the State Government) invested with any of the powers of a Central Excise Officer this Act by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 - by default all the officer of Central Excise Department are Central Excise Officers . Apart from them such other officers including an officers of the State Government invested by the Board constituted under the Central Boards of Revenue Act, 1963 with any of the power of a Central Excise Officer under the Act are Central Excise Officers . By virtue of Notification No.38/2001-C.E. (N.T), dated 26.06.2001 issued under Section 2(b) of the Central Excise Act, 1944 read with Rule 3(1) of the Central Excise (No.2) Rules, 2001, the Board appointed several persons as Central Excise Officers and invested them with all powers of an officer of Central Excise of the rank specified in the corresponding entry in column (3) of the Table to the Notification and that such powers being the powers of a Central Excise Officer conferred under the Act, to be exercised by them throughout the territory of India. Therefore, without doubt, the officers from the Directorate are Central Excise Officers as they have been vested with the powers of central exercise officers. The officers of the Directorate of Central Excise Intelligence are empowered to act as Central Excise Officer - As per Rule 3 of the Service Tax Rules, 1944, the Board can appoint Central Excise Officers for exercising powers under Chapter V of the Finance Act, 1994 to act within such local limits as it may assign to them. The expression such local limit has not been specified. The Directorate of Central Excise Intelligence (presently The Directorate of GST Intelligence) is one of the Directorate of the Board - Since the Board can invests the powers of a Central Excise Officer on any persons including an officer of the State Government the officers of the Directorate of Central Excise Intelligence (presently The Directorate of GST Intelligence) are Central Taxes Officers for the purpose of Finance Act, 1994. Thus, officers of Directorate General of Central Excise Intelligence are Central Excise Officers for the purpose of Section 2(b) of the Central Excise Act, 1994. They are empowered to exercise power pan India under Notification No.38/2001-C.E. (N.T), dated 26.06.2001 - the other ground of challenge to the impugned Notification No.22/2015-ST dated 16.9.2014 that pan India powers have been vested with the officers from the Directorate of Central Excise Intelligence (DGCEI) presently The Directorate of GST Intelligence and contrary to the restriction under Rule 3 of the Service Tax Rules, 1944 also fails. The definition of Central Excise Officer in Section 2(b) of the Central Excise Act, 1944 was made applicable for Section 73 of Chapter V of the Finance Act, 1994 which prescribes a machinery for recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded - under Rule 3 of the Service Tax Rules, 1994, the Board can appoint any other officer to exercise power within the local limits . However, that would not mean that the officers of Directorate of Central Excise Intelligence (DGCEI) presently The Directorate of GST Intelligence who are already Central Excise Officers under Notification No.38/2001-C.E. (N.T), dated 26.06.2001 for whole of India cannot exercise power pan India. Notification No.22/2014-ST dated 6.09.2014 is to be read in conjunction with Notification No.38/2001- C.E. (N.T), dated 26.06.2001. It cannot be said that the officers who has been vested with the powers under the impugned Notification No.22/2014-S.T., dated 06.09.2014, are not the Central Excise Officers . The challenge to the proceedings which have been impugned in W.P.No.24960 of 2021 and W.P.No.17941 of 2020 (Category-2) on the ground of limitation etc, involves disputed questions of fact. Therefore these issues are best left to be adjudicated by the namely Central Excise Officer such a Central Excise Officer could be a different person from the person issued show cause notice as a Central Excise Officer under Section 73 of the Finance Act, 1994. As long as the show cause notices have been issued a competent officer under the Finance Act, 1994 read with relevant notification, challenge to the proceeding based on the alleged failure to follow the circular cannot be countenanced. Therefore, the petitioners who have been issued with show cause notices and those who have been suffered Orders in Original have to be meet out the allegations on merits before the adjudicating authority or the appellate authority as the case may be Therefore, there is no merits in these present writ petitions. Issues touching on the merits are best left to be decided by the adjudicating authorities and appellate authorities in the hierarchy of the authorities under the Act. Petition disposed off.
Issues Involved:
1. Jurisdiction of officers to issue Show Cause Notices (SCNs) and Orders-in-Original under the Finance Act, 1994. 2. Validity of Notification No.22/2014-ST dated 16.09.2014. 3. Requirement of pre-consultation before issuing SCNs. 4. Validity of SCNs and Orders-in-Original based on jurisdiction and procedural grounds. Issue-wise Detailed Analysis: 1. Jurisdiction of Officers to Issue SCNs and Orders-in-Original: Analysis: - The petitioners challenged the jurisdiction of officers from the Directorate General of GST Intelligence (DGGI) to issue SCNs and Orders-in-Original under the Finance Act, 1994. - The court examined the definition of "Central Excise Officer" under Section 2(b) of the Central Excise Act, 1944, which includes officers from the Central Excise Department and any person vested with such powers by the Central Board of Excise and Customs (CBEC). - The court noted that Notification No.38/2001-C.E. (N.T), dated 26.06.2001, appointed officers from the Directorate General of Central Excise Intelligence (DGCEI) as "Central Excise Officers" with pan-India jurisdiction. - The court concluded that the officers from DGCEI (now DGGI) are "Central Excise Officers" and have the jurisdiction to issue SCNs and Orders-in-Original under the Finance Act, 1994. 2. Validity of Notification No.22/2014-ST dated 16.09.2014: Analysis: - The petitioners argued that Notification No.22/2014-ST, which appointed officers from DGCEI as "Central Excise Officers" with pan-India jurisdiction, was ultra vires Rule 3 of the Service Tax Rules, 1994. - The court examined the historical context and previous notifications, including Notification No.46/98-S.T., dated 28.01.1998, and Notification No.38/2001-C.E. (N.T), dated 26.06.2001. - The court concluded that the Board has the power to appoint officers with pan-India jurisdiction and that Notification No.22/2014-ST is valid and within the powers conferred by the relevant statutes. 3. Requirement of Pre-consultation Before Issuing SCNs: Analysis: - The petitioners argued that the SCNs were issued without pre-consultation, as mandated by the CBEC Master Circular No. 1053/2/2017-CX, dated 10-3-2017. - The court held that the circular is intended to facilitate compliance and reduce the burden on the department but is not binding on the courts. - The court concluded that the absence of pre-consultation does not render the SCNs illegal or without jurisdiction. 4. Validity of SCNs and Orders-in-Original Based on Jurisdiction and Procedural Grounds: Analysis: - The court examined the procedural grounds raised by the petitioners, including the argument that the SCNs and Orders-in-Original were issued by officers without jurisdiction. - The court reiterated that the officers from DGCEI (now DGGI) are "Central Excise Officers" with the jurisdiction to issue SCNs and Orders-in-Original. - The court concluded that the SCNs and Orders-in-Original are valid and within the jurisdiction of the officers who issued them. Conclusion: - The challenge to Notification No.22/2014-ST dated 16.09.2014 fails, and the writ petitions challenging the SCNs and Orders-in-Original based on jurisdiction and procedural grounds are dismissed. - The petitioners in Category-2 (those who received SCNs) are directed to file their replies within 30 days, and the adjudicating officer shall conclude the proceedings within 90 days thereafter. - The petitioners in Category-3 (those who received Orders-in-Original) are permitted to file statutory appeals within 30 days, and the appellate authority shall dispose of the appeals accordingly. - The writ petitions in Category-1 are dismissed, and the writ petitions in Category-2 and Category-3 are disposed of with the above observations.
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