TaxTMI 
TaxTMI 
2019 (8) TMI 396
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....nish documents for audit of accounts following the year of last audit to the years 2016-17. As stated in the writ petition, respondent No.5 has intimated to the petitioner that Internal Audit Group No.6, Circle-II, Indore shall be auditing the audit account / audit of the record of the petitioner. 04. The petitioner has further stated that he has submitted document / information vide letter dated 16.02.2018 and further details were sought by respondent No.5 vide letter dated 02.04.2018. The petitioner did submit a reply on 05.06.2018 and also objected in the matter. The petitioner has further stated that respondent No.5 has issued an audit memo on 11.09.2018 and four other audit memos on 22.10.2018. 05. The petitioner, as stated in the writ petition, under protest has deposited certain amount towards the audit memos issued to the petitioner from time to time. The petitioner has further stated that respondent No.5 has directed the petitioner to furnish documents to the Internal Audit Group for the purpose of audit of account / record. The petitioner's contention is that the internal audit is nowhere defined under the Finance Act, 1994 and he is not having any authority ....
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....or is the same within the scope and purview of rule making power of the authority. 13. It has also been stated that Rule 5A(2) is in conflict with Section 72A of the Act and beyond the rule making power of the Central Government to the extent that it empowers departmental officers or CAG to 'demand' documents mentioned therein and henceforth unjust and bad in law. 14. It has also been stated that consequently, Circular No.181/7/2014-Service Tax dated 10.12.2014 stating that "a clear statutory backing for the rule now exists in section 94(2)(k) of the said Act" also lacks validity in law, and therefore, the respondents have no authority to issue the show-cause notice. 15. It has been stated that Circular No.995/2/2015-CS dated 27.02.2015 issued by the CBEC on the "Central Excise and Service Tax Audit norms to be followed by the Audit Commissionerates" has no statutory backing, as it contemplates the officer themselves conducting audit and is bad in law. 16. After the petition was filed, a show-cause notice was issued on 25.04.2019 and the petitioner, by making an amendment, has sought quashment of notice dated 25.04.2019. 17. A reply has been filed in the matt....
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....erved under that sub-section, a statement, containing the details of service tax not levied or paid or short levied or short paid or erroneously refunded for the subsequent period, on the person chargeable to service tax, then, service of such statement shall be deemed to be service of notice on such person, subject to the condition that the grounds relied upon for the subsequent period are same as are mentioned in the earlier notices. (1B) Notwithstanding anything contained in subsection (1), in a case where the amount of service tax payable has been self-assessed in the return furnished under sub-section (1) of section 70, but not paid either in full or in part, the same shall be recovered along with interest thereon in any of the modes specified in section 87, without service of notice under sub-section (1). (2) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined :....
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....t is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of service tax under this sub-section and interest thereon. (4) Nothing contained in sub-section (3) shall apply to a case where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of- (a) fraud; or (b) collusion; or (c) wilfulmis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. 4(A) [* * * *] (4B) The Central Excise Officer shall determine the amount of service tax due under sub-section (2)- (a) within six months from the date of notice where itis possible to do so, in respect of cases falling under sub-section (1); (b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under the proviso to sub-section (1) or the proviso to sub-section (4A)]. (5) The provisions of sub-section (3) shall not apply to any....
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....(4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined. (5) The amount paid to the credit of the Central Government under sub-section (1) or sub- section (2) or sub-section (4), shall be adjusted against the service tax payable by the person on finalisation of assessment or any other proceeding for determination of service tax relating to the taxable service referred to in subsection (1). (6) Where any surplus amount is left after the adjustment under sub-section (5), such amount shall either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 (1 of 1944) or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B of the said Act and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Central....
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....h increased amount. SECTION 73C. Provisional attachment to protect revenue in certain cases.- (1) Where, during the pendency of any proceeding under section 73 or section 73A, the Central Excise Officer is of the opinion that for the purpose of protecting the interests of revenue, it is necessary so to do, he may, with the previous approval of the [Principal Commissioner of Central Excise or Commissioner of Central Excise], by order in writing, attach provisionally any property belonging to the person on whom notice is served under sub-section (1) of section 73 or sub-section (3) of section 73A, as the case may be, in such manner as may be prescribed. (2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1) : Provided that the Principal Chief Commissioner of Central Excise and Chief Commissioner of Central Excise may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed two years. SECTION 73D. Publicati....
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....ted in 2016 (43) S.T.R. 67 (Delhi) and it has been brought to the notice of this Court by learned counsel appearing for the Excise Department that the aforesaid judgment has been stayed by the Hon'ble Supreme Court and the matter is pending for adjudication. 27. Learned counsel for the petitioner has also placed reliance upon a judgment delivered in the case of T.R. Sawhney Motors Private Limited v/s Union of India reported in 2019 (24) G.S.T.L. 176 (Del). 28. The aforesaid judgment was based upon the earlier judgment delivered by the Delhi High Court in the case of Mega Cabs Private Limited (supra). 29. This Court has carefully gone through the entire writ petition and the reply filed by the respondents. Now, a show-cause notice has been issued in the matter. Though the petition was filed initially for quashment of letter / notice dated 01.01.2018, however, a show-cause notice has been issued on 25.04.2019 in the matter. The Division Bench of this Court in the case of Tripti Alcobrew Limited v/s The State of Madhya Pradesh & Six Others (W.P. No.1969/2014) has held as under:- "The respondent - Union of India has filed a detailed reply in the matter and has ans....
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....ued the Show Cause Notice ie., the Addl. Director General. The petitioner shall certainly be free to raise all possible grounds and shall also be given opportunity of hearing in the matter and, therefore, the question of interference does not arise. In another case, again by the Hon'ble Supreme Court in the case of Union of India Vs. Jain Shudh Vanaspati reported in (1996) 10 SCC 520, the Hon'ble Supreme Court in paragraph 10 has held as under : It is relevant to bear in mind that the issuance of the show-cause notice under Section 124 contemplates that the respondents' response shall be considered and only thereafter will the matter be decided. The respondents shall, therefore, have full opportunity to satisfy the authorities that there was no importation of banned goods which makes them liable to confiscation. In the light of the aforesaid judgment, the respondent shall certainly grant an opportunity of hearing to the petitioner and the petitioner shall have all opportunity to satisfy the authorities in respect of grounds raised in the Show Cause Notice and the present Writ Petition is certainly a premature Writ Petition. Not only t....
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....gment, the question of interference by this Court, inspite of the fact that a complete mechanism is provided for ventilating the grievance before the authorities, does not arise. Recently, the Division Bench of this Court in similar circumstances in the case of Asha Confectionary Vs. Union of India (W.P.No. 5428/2016, decided on 7/11/2016) while dealing with again a Show Cause Notice issued by the Excise Department under the provisions of the Customs Act, 1962 has passed the following order : WP No.5428/2016 07-11-2016 Mr Vivek Dalal, learned counsel for the petitioner. Mr Prasanna Prasad, learned counsel for the respondents. The petitioner before this court has filed this present petition against the 'Panchanama' dated 19-05-2016, by which certain goods have been seized from the Excise Department. Seizure memo is under challenge. However, reply has been filed. Learned counsel for the respondent has drawn the attention of this court towards show cause notice issued u/s 124 of the Customs Act, 1962. His contention is that proceedings have been initiated under the Customs Act against the petitioner and the Customs....
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....e to file an appropriate reply to the Show Cause Notice and the authority issuing the Show Cause Notice shall proceed ahead in the matter strictly in accordance with law. With the aforesaid, the present Writ Petition stands disposed of." In light of the aforesaid judgment, the question of interference by this Court at the stage of issuance of showcause notice does not arise. 30. In the case of M/s Gitanjali Vacationville Private Limited & Another v/s The Union of India & Another decided by Calcutta High Court in W.P. No.380/2019 dated 15.01.2019 the scope and ambit of Sections 173 and 174 of the Central Goods and Service Tax Act, 2017 has been discussed, as the same provides for a saving clause and the same reads as under:- "The provisions of Chapter V of the Finance Act, 1994 stands omitted by Section 173 of the Act of 2017 save as otherwise provided under the Act of 2017. Therefore, if any provision of the Act of 2017 allows the applicability of the Chapter V of the Finance Act, 1994, then notwithstanding the omission of the Chapter V of the Finance Act, 1994 under Section 173 the same continues to apply. Section 174 is the repeal and saving provi....
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....rticles) Act and the Central Excise Tariff Act, 1985 stood repealed. 29. But Section 174(2) of the CGST Act of 2017 provides that the repeal of the said Acts and the amendment of the Finance Act of 1994 (Act 32 of 1994) to the extent mentioned in Section 174(1) or 173, as the case may be, shall not, amongst others, effect any investigation, enquiry or verification (including scrutiny and audit), assessment proceedings, adjudication or any other legal proceeding or recovery of arrears etc., and all such proceedings may be instituted, continued or enforced as if the Act had not been so amended or repealed. 31. As the provisions of Section 174(2) also is clearly applicable in respect of an omission of the enactment under Section 173, therefore, any such investigation, enquiry, etc., that was instituted, continued or enforced under Chapter V of the Finance Act of 1994, continues to remain in place inspite of such omission of Chapter V of the Finance Act. In other words, Section 174(2)(e) is a savings clause in respect of any investigation, enquiry etc., that was/to be instituted under Chapter V of the Finance Act of 1994. A conjoint reading of Section 173 and 174(2)(e) woul....