Negotiable Instruments: Exhaustive Coverage by Adv Roma Bhagat. Register Now!
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  • According to the Madras High Court, as the Central Board of Excise and Customs has given DGGI officials the authority of Central Excise Officers, they are considered "Central Excise Officers" for the purposes of Rule 3 of the Service Tax Rules, 1994. (CBEC). 
  • When deciding on a number of writ petitions, the Single Bench of Justice C. Saravanan determined that the term "Central Excise Officer" as defined in Section 2(b) of the Central Excise Act, 1944, is broad and includes any person, including an officer of the State Government, who has been granted any authority by the CBEC under the Central Excise Act.
  • The CBEC granted the aforementioned officials all the authority granted to the Central Excise Officers by Chapter V of the Finance Act of 1994 and its implementing rules to be used throughout India. 
  • The officers of the Directorate of Central Excise Intelligence (now known as the Directorate of GST Intelligence) issued the Show Cause Notices to recover the service tax that the petitioners were alleged to have evaded under the terms of the Finance Act of 1994, but the petitioners, including M/s. Redington (India) Limited, challenged the Show Cause Notices on the grounds that the said officers lacked the authority to issue the Show Cause Notices. 
  • Before the Madras High Court, the petitioners argued that the aforementioned Notification violated Rule 3 of the Service Tax Rules, 1994.
  • The petitioners asserted that only a certain and particular Central Excise Officer, and not just "all" Central Excise Officers, are contemplated by the Finance Act, 1994, as being able to issue and decide a Show Cause Notice under Section 73 of the Finance Act. 
  • According to the petitioners, the Central Excise Officer, as defined by Section 73 of the Finance Act of 1994, is the official under whose jurisdiction the assessee obtains registration, pays taxes, submits returns, and complies with all other requirements set forth by the Finance Act. 
  • So, according to the petitioner, the personnel working for the Directorate General of Goods and Service Tax Intelligence lack the authority to issue the aforementioned Show Cause Notices.
  • The Court noted that Section 73 of the Finance Act, 1994 offers a mechanism for recovering Service Tax that has not been charged, paid, or that has been incorrectly imposed, short-paid, or refunded. 
  • The Court noted that such Show Cause Notices may alternatively be decided by the "Central Excise Officer." 
  • As a result, the Court determined that the Central Excise Act of 1944's Section 2(b) definition of "Central Excise Officer" is broad and that, by default, all Central Excise Department officers are "Central Excise Officers."
  • The Court further stated that in addition to the officers from the Central Excise Department listed above, any other officer, including an officer from the State Government, who is granted any of the powers of a Central Excise Officer by the CBEC would also be considered a "Central Excise Officer."
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