2021 (7) TMI 230 - HC - Service Tax

Interest on services tax - an adjudication was conducted and final order was passed on 17.09.2014, by the Settlement Commission seeking interest - error apparent on the face of record or not - HELD THAT - This Court is of the considered opinion that admittedly the application filed under Section 32E of the 1944 Act, for settling the issues, was entertained by the Settlement Commission. The Settlement Commission also adjudicated the issues with reference to the informations and particulars provided by the assessee. The Settlement Commission accepted the terms of reference and finally granted partial immunity from penalty to the applicant and further, granted immunity from prosecution and the order was passed. The interest is chargeable based on certain admitted facts and circumstances placed before the Settlement Commission. If at all there is any error apparent in respect of such findings with reference to the original records, the petitioner is at liberty to approach the Settlement Commission for clarification or for rectification of any such error apparent regarding the facts admitted or pleaded. However, such an adjudication cannot be done by the High Court in a writ proceedings, which require examination of original records and the admission statements made by the parties before the Settlement Commission with reference to the application filed under Section 32E of the 1944 Act. This Court is of the opinion that the order passed by the Settlement Commission pursuant to the admission made by the parties need not be interfered with. However, if there is any error apparent on record or if there is any factual error regarding the admitted statements, the Settlement Commission is empowered to rectify such mistakes by following the procedures contemplated - Petition disposed off.

Summary

Issues:
Challenge to order of Settlement Commission dated 17.09.2014 under Section 32F(5) of Central Excise Act, 1944 made applicable to Service Tax; Interpretation of duty liability disclosure under Section 32E of the 1944 Act and Section 83 of Finance Act, 1994; Settlement terms and conditions under the 1944 Act made applicable to Service Tax; Immunity from penalty and prosecution granted by Settlement Commission; Dispute over interest payment by petitioner; Scope of adjudication post-settlement by Settlement Commission; Application of Cum-tax value benefit; Authority of Settlement Commission to rectify errors.

Analysis:

The petitioner, engaged in textiles, jewellery, and household articles business, challenged the Settlement Commission's order dated 17.09.2014 under Section 32F(5) of the Central Excise Act, 1944, extended to Service Tax by Section 83 of the Finance Act, 1994. The petitioner's application for settlement was based on the confusion regarding Service Tax collection from tenants, especially Canara Bank, and subsequent actions by the Directorate General of Central Excise Intelligence, Chennai, leading to the Settlement Commission's partial immunity grant from penalty and prosecution.

The petitioner contended that they remitted Sales Tax with the department based on Service Tax collected from tenants, denying any irregularity. The Settlement Commission's order was challenged on grounds of erroneous interest settlement, contradicting facts, and the petitioner's compliance with tax payments. The respondent-Department argued short payment of Service Tax by the petitioner, justifying interest charges and Settlement Commission's decision, emphasizing no further adjudication post-settlement.

The Court acknowledged the Settlement Commission's acceptance of the petitioner's application under Section 32E of the 1944 Act, settling issues based on disclosed information. The Commission granted partial immunity from penalty, immunity from prosecution, and resolved Service Tax and interest matters, considering the absence of Cum-tax value benefit evidence. The Court highlighted the Settlement Commission's authority to rectify any apparent errors based on admitted facts, emphasizing the petitioner's option to seek clarification or rectification directly.

Concluding, the Court upheld the Settlement Commission's order, emphasizing the Commission's power to rectify any factual errors or mistakes. The petitioner was advised to approach the Commission for any clarifications or rectifications required. The Court disposed of the Writ Petition without costs, maintaining the Settlement Commission's authority to address any errors or factual discrepancies in the case.