A division bench of the Delhi High Court has upheld the powers of the Director General, Directorate General of Central Excise Intelligence ( DGCEI ) regarding the investigation of service tax cases.
The petitioner, National Building Construction Corporation Ltd., is a Public Sector Undertaking under the Ministry of Urban Development of the Government of India has challenged the decision of the Director General, Directorate General of Central Excise Intelligence (DGCEI), Lucknow Zonal Unit to investigate service tax evasion cases of all the branches of the petitioner,
The bench comprising Justices Sanjiv Khanna and Prathibha M Singh asked to treat the period between 10th February 2016 when the stay order was passed in respect of the summons dated 21st and 28th January 2016 till the pronouncement of judgment should be excluded for the purpose of computing limitation and period specified for issue of show cause notice under Section 73(1) of Fin Act.
“This would be in terms of Explanation to Sub-Section 1 to Section 73 of the Fin Act. It would be just and fair in terms of the decision in Grindlay’s Bank Ltd. (supra). Officers from DGCEI and Commissionerates who had issued notice under Section 14 of CE Act by the interim orders have been barred and prohibited from taking action in terms of the notices issued by them. The court must ensure that when the stay order is vacated no party should suffer on account of limitation because of the interim stay order,” the bench said.
Accordingly, the bench held that;
- Central Excise Officers of DGCEI have all India jurisdiction and can issue notices and enquire into the matters relating to service tax against any assessee/ person even if the said person or assessee is registered with one or multiple Commissionerates.
- Notice under Section 14 of the CE Act i.e. Central Excise Act can be issued even if proceedings under Section 73 of the Fin Act i.e. Finance Act, 1994 are not pending. However, the notice should relate to matters and issues relating to provisions of services and imposition of service tax.
- The petitioner should comply with the notices issued or would be issued by the Central Excise Officers, DGCEI to furnish evidence and documents pertaining to the PMC charge i.e. Project Management Consultancy Charge in respect of Commissionerate/ registration except for those subject matter of show cause notice dated 13th March 2015 issued by the Commissionerate of Central Excise and Service Tax, Patna.
- Interim orders are accordingly, vacated except and limited to evidence and documents, the subject matter of demand-cum-show cause notice dated 13th March 2015 issued by the Patna Commissionerate.
- The period between 10th February 2016 when the stay order was passed till the pronouncement of the judgement would be excluded for purpose of computing limitation period specified for the issue of show cause notice under Section 73(1) of the Fin Act.