TaxTMI 
TaxTMI 
2016 (1) TMI 928
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....ation No. 142/ST/JL/2014-SC(MB) SA(ST) 262/2014 dated 29th May 2014. By that order, the Settlement Commission rejected the application in question as impermissible under Section 32E of the Central Excise Act, 1944 ("CEA"). 3. The Petitioners are a partnership firm. They provide event management services. These services are covered by Section 65(40) read with Sections 65(41) and 65(105)(zu) of the Finance Act, 1994. The Petitioners are registered with the Service Tax Department under registration No. AAFFC3158GST001. 4. During the Financial Years 2007-2008 to 2010-2011, the Petitioners claim to have suffered a set back in their business. This is inter alia attributed to various prominent clients defaulting in paying the Petitioners' fees for event management services rendered. The Petitioners say that they had no option but to write off the amounts of unpaid fees by reversing the entries in question in their books of account. 5. 1During this period (FY 2007-2008 to 2010-2011) in view of the provisions of Section 68 of the Finance Act, 1994 read with Rule 6 of the Service Tax Rules, 1994, service tax was payable by the 5th of the month immediately following the calendar month in w....
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....3/- for the period from FY 2007-2008 to 2011- 2011. 8. The Petitioners responded by their letter dated 29th November 2012 to this audit objection and submitted that the calculation of service tax allegedly short paid was incorrect due to various reasons. Among the reasons cited by the Petitioners was the credit they gave to non-paying clients such as Star India, Hindustan Unilever Limited & Zee TV of the amount first charged for event management services. In other words, since the fees charged by the Petitioners had not been paid, the amounts were reversed. It was also pointed out that an amount of Rs. 2,00,000/- due from Reliance Broadcast Network for the FY 2010-2011 was written off since the party did not agree to pay these amounts. Supporting documents were forwarded along with this response. Exhibit "E", pp.56-57 The Petitioners recomputed the amounts that, according to them, were due and arrived at a figure of Rs. 20,84,792/-. This was paid along with interest of Rs. 16,77,519/-. Thus, a total amount of Rs. 37,62,311/- was paid between 21st September 2012 and 22nd May 2014. Details of these payments, giving their dates, amounts and corresponding challan numbers are set out i....
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....irected the Revenue to examine the Petitioners' calculations and present a factual report within 15 days. Exhibit "M", pp. 96-97 By their letter dated 31st October 2014, the Petitioners submitted a reconciliation statement and various supporting documents. Exhibit "N", pp. 98-162 The Revenue did not submit any verification report as directed by the Settlement Commission. 13. On 23rd December 2014, the Petitioners received a communication stating that since one of the Members of the Settlement Commission has retired, a fresh date for re-hearing of the matter was scheduled on 15th January 2015. At that hearing, the Settlement Commission noted that no report had been received so far from the Revenue despite specific directions in that behalf. The response from the Revenue's representative was that he was unaware of any such directions. The Settlement Commission, therefore, adjourned the matter with a specific direction to submit a report within 10 days. Exhibit "P", pp. 165-166 14. The Petitioners then received the impugned Final Order dated 18th February 2015 by which the Settlement Commission rejected the Petitioners' Application as not admissible. The Final Order indicates that t....
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....n does not prejudice the Petitioners. I say that every contention of the Petitioners will be examined by the adjudicating authority on the basis of evidence and material furnished. I therefore most respectfully submit that no cause or intervention having been made out, this Honorable Court may be pleased to dismiss the petition with costs." (Emphasis added) 17. We will turn to this paragraph presently, as it appears to us to be one that vitiates the entire basis of the Final Order impugned in this Petition, but before we do so it is necessary only to note that the Affidavit in Reply does not contain a parawise traverse of the Petition. Some of the claims by the Petitioners are disputed but in paragraph 3, Mr. Dwivedi says that a copy of the verification report was made available to the Petitioners' authorized representative, one Mr. Piyush Satra, on 5th February 2015. In our view, this is insufficient. What was required to be given to the Petitioners was a copy of the Revenue's Report and also an opportunity of dealing with it. That opportunity appears to us clearly to have been denied. 18. We have also carefully considered the impugned order in question. From paragraph 8.1 o....
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....t and duty liability which is accepted by him, he could not be fastened with the liability which he never intended as accepted to be payable by him. (iii) Section 127(1) as it stood then, used the expression "complexity of the Investigation" which shows that highly complex and contentious questions of fact cannot even be admitted for processing. 50. It was thus held that if the case involves highly complex and disputed questions of fact for which detailed inquiry is necessary, the Settlement Commission should refer the matter back to the adjudicating officer to be taken up from the stage from which the matter was before such officer just before the making of the settlement application. 51. The above principles were reiterated by two other judgments of this Court:- (i) Ashwani Tobacco Company Pvt. Ltd. V UOI & Ors., 2010(251) E.L.T. 162 (Del.); (ii) Director General or Central Excise (intelligence) v. Murarilal Harishchandra Jaiswal Pvt. Ltd. And Ors., 172 (2010) DLT 593 + 2013(291) E.L.T. 484 (Del.) 52. In the second of the above decision, this Court observed the "where at the admission stage under Section 127 C (1) the case throws a high decree of variation betwe....
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....des for the jurisdiction and powers of the Settlement Commission. Section 32-I, sets out the powers and procedures of the Settlement Commission and subsection (1) clearly says that the Settlement Commissioner has all the powers that are vested in a Central Excise Officer under the CEA or the Rules made thereunder. Section 14 of the Act confers on the Central Excise Officer the power to summon persons to given evidence and to produce documents in enquiries under this Act. From this it is at once clear that the Settlement Commission has plenary powers to summon and take evidence. If there was any doubt about this, it is completely set at rest by the plain wording of Section 32-L(2) which speaks specifically of the Central Excise Officer being entitled to use all the materials and information produced by a petitioner before the Settlement Commission, "or the result of the enquiry held or evidence recorded" by the Settlement Commission in the course of proceedings before it "as if such materials, information, enquiry and evidence had been produced before such Central Excise Officer or held or recorded by him in the course of proceedings before him". For the Respondents to say, therefor....
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.... of the Settlement Commission were examined, including that it was set up and constituted on the recommendation of the Wanchoo Committee Report. The idea was to open the doors of settlement to taxpayers with the primary object of ensuring revenue returns and avoiding revenue loss. The Legislature intended to keep at bay an overly rigid approach and favoured a statutory regime that allows the defaulting taxpayers to come clean. The purpose is to avoid an unnecessary burden on Government resources. This is, clearly, the statutory mandate. 24. We will assume for the purpose of this Petition that a copy of the Revenue's report was in fact made available to the Petitioners. We find, however, that the Petitioner was given no opportunity of meeting it. The Settlement Commission seems to have straightaway accepted that Report not only as gospel, but as totally incontrovertible, and incapable of being subjected to any rational settlement. There is absolutely no basis for this, other than the Settlement Commission saying, to all intents and purposes, that the matter is apparently too onerous and too taxing on the Settlement Commission's time, energy and resources. This is wholly unacceptabl....