Closure of cases under Section 73(3) of the Finance Act of 1994 - Reg. - Service Tax - ORDER NO 01/2008-ST

Closure of cases under Section 73(3) of the Finance Act of 1994 - Reg. OFFICE OF THE COMMISSIONER OF CUSTOMS CENTRAL EXCISE HYDERABAD-III COMMISSIONERATE GENERAL INSTRUCTION STANDING ORDER NO 01/2008-ST Dated: June 25, 2008 Sub: Closure of cases under Section 73(3) of the Finance Act of 1994 - Reg. It has been noticed that different practices for closure of cases covered under Section 73(3) of the Finance Act, 1994 are being followed in the Commissionerate. There is neither any separate record prescribed nor is there any standard procedure for dealing with such cases. 2. Closure of cases under Section 73(3) of the Act is akin to exercising quasi judicial function in as much as the competent authority has to decide about absence of evidence or grounds for invocation of proviso to section 73 and apply Section 73(3) of the Act. It is thus administrative propriety that closure of cases of cases under Section 73(3) of the Act should be carried out with the approval of the Commissioner who is the reviewing authority for the lower adjudicating authorities. If the case arises out of Audit objection then the closure will be approved in the Monthly Monitoring Committee (MMC) meeting chaired by the Commissioner, Anti-Evasion and Divisional cases will be put up to the Commissioner through the Additional Commissioner (Anti-Evasion). 3. Needless to mention that in all such cases full recovery of Service Tax with interest alongwith request for waiver of Show Cause Notice are necessary before closure of the case under Section 73(3) of the Act can be considered. Format for the letter to be obtained from the assessees is in the Annexure (enclosed). It is also imperative that the investigating officers should clearly certify that no evidence leading to invocation of the grounds for extended period as envisaged in the proviso to Section 73 are involved in the cases considered for closure under Section 73(3) of the Act. 4. After the approval of the competent authority, details of these cases must be entered in a separate register in the Division/ Hqrs. Audit/Hqrs. Anti-Evasion branches in the following format: Sr.No. Name of the Assessee Division/Hqrs. Anti-Evasion/Audit 335J entry No./Audit Note No. as the case may be Service tax recovered Interest recovered Issue involved Closed by whom with date Remarks (1) (2) (3) (4) (5) (6) (7) (8) (9) A monthly report in this regard in the format mentioned above should be furnished by all the Divisions/ Hqrs. Audit Branch/Hqrs. Audit/ Hqrs. Anti-Evasion Branch of the Commissionerate by 5 th of the following month to the Commissioner (to be processed in Hqrs. Service Tax (Tech) Section.) (B.B. Prasad) Commissioner ANNEXURE TO STANDING ORDER No.01/2008-SERVICE TAX Dated:June, 2008 Sub: Letter given under Section 73(3) of the Finance Act, 1994 for avoiding penalty and non-issuance of SCN-Reg. I/We M/s. ______________________________________________ falling under the jurisdiction of ______________________________________________Ranger and ________________________________________ Division state and request as under: 2. Whereas in terms of Section 73(3) of the Act, where any Service Tax has not been levied or paid or has been short levied or short paid or erroneously refunded, the person, chargeable with Service Tax, may pay the amount of Service Tax before service of notice on him under sub-section(1) in respect of Service Tax and inform the Central Excise officer in writing who, on receipt of such information shall not serve any notice under the sub-section(1) in respect of the Service Tax so paid; 3. Whereas during the course of verification of our records returns, by the Range/Division/Audit/Anti-Evasion of the Headquarters office of HYDERABAD-III Commissionerate, it is observed that there is short payment/ non-levy/ non-payment of Service Tax / Wrong availment of Cenvat Credit an account of issue/issues mentioned as per the Annexure. We having agreed to the points raised during verification/ scrutiny have paid the said amounts of Service Tax/ reversed the Cenvat Credit of Rs.________________ vide TR-6/Cenvat Register No._________dated___________along with the interest of Rs.____________vide TR-6 Cenvat Register No._____________ dated __________voluntarily. 4. Now, therefore, in terms of the provisions of Section 73(3) of the Finance Act, 1994, we requests that a SCN may not be issued to us in this case and no penalty may be imposed on us as the above short levy/ short payment /non-levy/non-payment/wrong availment of credit are not intentional on our part. We request that the above issue may be treated as closed with this letter since we have complied with the above provisions of Service Tax Law. We do not intend to file any appeal in the matter. We will also not be claiming refund of Service Tax paid as mentioned in the preceding paragraph. Yours faithfully (Authorised Signatory) Mrs._____________________ Date: Place: