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2014 (8) TMI 200 - HC - Service TaxPower to conduct service tax audit / Revenue Audit – Validity of Rule 5A of Service Tax Rules, 1994 - instruction of the Central Board of Excise and Customs (“CBEC”) no. F. No. 137/26/2007-CX.4 dated 1.1.2008 - whether special audit can be ordered by recourse to Section 72-A of the Finance Act, 1994 – Held that:- It is apparent that the only type of audit within the contemplation of the statute is that stipulated for in Section 72A, i.e. a special audit when only certain circumstances are fulfilled. The Parliament thus had a clear intention to provide for only a special audit. The fact that Section 72A prescribes the conditions meriting such special audit compels the necessary inference that the Parliament did not intend to provide for a general audit that “every assessee” may be subjected to, “on demand”. - Decided in favour of assessee. Any attempt to include provision for such a general audit through the back-door, such as through the impugned rule, is ultra-vires the rule making power conferred under Section 94(1). Rule 5A(2) must consequently be struck down. - Decided in favour of assessee. Likewise the CBEC instruction dated 1.1.2008, being in furtherance of Rule 5A(2), which rule is ultra-vires the Finance Act, 1994, is void for the same reasons. - Decided in favour of assessee. The Service Tax Audit Manual, 2011 is merely an instrument of instructions for the service tax authorities; it is but obvious that it is not a statutory instrument and has no statutory force. Thus, Rule 5A(2) cannot be sought to be justified as against it. - Decided in favour of assessee.
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