TIOL-DDT 141 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 141</font><br> 22 06 2005<br> Wednesday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>SERVICE TAX – WHO SHOULD ISSUE SHOW CAUSE NOTICE?</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prior to its amendment vide Finance Act 2005, as per Section 73 of the Finance Act 1994, where any service tax has not been levied or paid, or has been short levied or short paid, erroneously refunded, the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise could serve a notice on the person chargeable with the service tax. The power to issue show cause notice was totally vested with only the Deputy/ Assistant Commissioners irrespective of the amount of tax liability. The Commissioners were empowered under Section 84 of the Finance Act 1994, only to review the orders passed by the Assistant Commissioners. <br> <br> While things were sailing smoothly, vide Finance Act 2005, Sections 73 has been amended to replace the words Assistant / Deputy Commissioner with “any Central Excise Officer”. Corresponding replacements have been made in Sections 74, 78 and Section 84. This must have been done to grant powers to the proposed Deputy Assistant Commissioners to issue Show Cause Notices and adjudicate cases. If that was the intention, it could have been made clearer and unambiguous. But these are not traits that you can blame the government for. <br> <br> Further a new section 83 A has been inserted which reads as under:<br> <br> <b>83 A: Power of Adjudication:</b><br> <br> Where under this Chapter or the rules made thereunder any person liable to pay penalty, such penalty may be adjudged by the Central Excise Officer conferred with such powers as the Central Board of Excise and Customs constituted under the Central Board of revenue Act 1963, may, by notification in the Official Gazette specify.<br> <br> But in the mega exercise of budget Notifications, the Board forgot to specify the powers of adjudication by a Notification under Section 83 A, with the result that there is no specified authority for issue of show cause notices and adjudicate them. Any Central Excise officer ranging from the Sepoy to the Chief Commissioner can serve a notice on the service tax assesses and also adjudicate.<br> <br> Another interesting dimension is that there is a school of thought that the adjudication powers specified under Central Excise are applicable for Service tax also, but there is no authority to view so. <br> <br> Since service tax is a new levy with mostly semi literate assesses, may be the Government thought that the Commissioners are too big for them to raise the demands. But with the recent amendments, there is the possibility of Commissioners passing orders thereby depriving the assesses of an appellate forum (of Commissioner Appeals). Actually under Section 84, the Commissioner is a revision authority and he can pass an order on any order passed by his subordinates. <br> <br> There is an urgent need to clarify who has to do what. <b>In any case as of now, there is no officer designated by the Board to adjudicate a case involving penalty, under Section 83 A. So even if tax can be demanded by any <i>central excise officer</i>, as of now there is no competent officer to adjudicate on penalty. </b><br> <br> <font color="#006633"><b>Lok Satta moves to Mumbai</b></font><br> <br> The Lok Satta’s crusade to reform Central Excise is taking them to Mumbai today and tomorrow with a workshop on Central Excise. The same group of officers and NGO volunteers are in Mumbai to discuss obviously the same issues. Even the CVC is going to be there. Lok Satta’s convener, Dr. Jayaprakash Narayan said in Hyderabad that Mumbai is not going to be an encore of Hyderabad, but from the programme sent to us, it appears that Mumbai is going to be a carbon copy of Hyderabad. The next show is in Ahmedabad. The Chief Commissioner there informed us that the programme there is going to be different. <br> <br> Meanwhile officers from all corners of the country have already flown into Mumbai and are enjoying the hospitality of Mumbai Central Excise. An officer from Mumbai asks me in anguish,<br> <br> <b>At least 10 of the participants in the Mumbai seminar will come from different parts of India - Delhi, Chandigarh etc - All Commissioner level - How does the Dept make arrangements for all these officers - Does the Dept have the mechanism to house these officers/ guest houses / vehicle arrangements at the beck and call of these officers – Do they have the paraphernalia to accommodate all such officers and more so for such an obsolete exercise? Who will arrange these? Again the officers in charge of organising will arrange them from their contacts in the Industry -- Request big/ small industrial houses for their guest houses and vehicles - Is this not the stepping stone to corruption , albeit in a different and may I say undignified manner. .. Is it not asking for favours from Trade? Is it not making use of the official position? Doesn’t this amount to harassment of officers also? --- <br> <br> Will Lok Satta, CBEC and CVC discuss this issue? How many assessees were harassed for guest houses and vehicles for the Lok Satta’s crusade?<br> </b><br> <font color="#FF6666"><b>Until Tomorrow with more DDT<br> <br> Have a nice day. <br> <br> Mail your comments to</b></font> <b>vijaywrite@taxindiaonline.com </b></font></p> </body> </html>