Issue of summons in Central Excise and Service Tax matters - CBEC Instructions
IT has been brought to the notice of the Board that:
1. Summons under Section 14 of the Central Excise Act, 1944 have been issued by the field formations to the top senior officials of the companies in a routine manner to call for material evidence/ documents.
2. Summons have been issued to enforce recovery of dues, which are under dispute.
Board says that it is desirable that summons need not always be issued when a simple letter, politely worded, can also serve the purpose of securing documents relevant to investigation. It is emphasized that the use of summons be made only as a last resort when it is absolutely required.
Board has issued the following guidelines to be followed in both Central Excise and Service Tax matters: -
(i) Summons by Superintendents should be issued after obtaining prior written permission from an officer not below the rank of Assistant Commissioner with the reasons for issuance of summons to be recorded in writing;
(ii) Where for operational reasons it is not possible to obtain such prior written permission, oral/telephonic permission from such officer must be obtained and the same should be reduced to writing and intimated to the officer according such permission at the earliest opportunity;
(iii) In all cases, where summons are issued, the officer issuing summons should submit a report or should record a brief of the proceedings in the case file and submit the same to the officer who had authorised the issue of summons.
(iv) Senior management officials such as CEO, CFO, General Managers of a large company or a PSU should not generally be issued summons at the first instance. They should be summoned only when there are indications in the investigation of their involvement in the decision making process which led to loss of revenue.
Board wants strict compliance by the field officers. Non observance of the instructions will be viewed seriously.
CBEC had in Circular F.No dated 13.10.1989 observed,
Complaints have been received from the trade that in some of the Collectorates summons under Section 14 of the Central Excises and Salt Act, 1944 are being issued to the Managing Directors and other high officers with a view to enforce recovery of dues which are under dispute. Action under this section is to be taken only as a last resort in cases where assessees are not cooperating or investigations are to be completed expeditiously. This section should not be used for harassing the top management for forcing them to pay up demands which are disputed by them. For recovery of demands normal procedure under the law should be followed.
If any instance of issue of summons to Managing Directors and other Directors without justification is noticed, a serious view will be taken by the Board. Collectors will be held personally responsible for enforcing these instructions in their charges.
That was twenty five years ago.
Eight years ago in F. No. dated 26.2.2007, Board issued some instructions on summons and firmly declared, Non-observance of these instructions would be viewed seriously.
All these years Board had no time to view the indiscriminate summons, let alone view seriously. And all these years, officers have used summons as a power to threaten and harass assessees. The summons are menacingly and misleadingly worded to instill fear among the assessees and the summoned persons are made to sit for hours - just to teach them a lesson.
Why can't there be a record of summons to be frequently inspected by senior officers and available for public scrutiny.
Board will come up with another circular after ten years.
CBEC Instruction in F. No. 207/07/2014-CX-6., Dated: January 20, 2015