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2016 (4) TMI 1078 - HC - Service TaxSeeking declaration that the search conducted and summons issued to be illegal and ultra vires to the provisions of the Finance Act, 1994 - Wrong availment of exemption under Notification No. 26/2012-ST dated 20th June, 2012 from payment of Service tax on some of the services provided by claiming to be a “tour operator” - evasion of payment of service tax. Held that:- it is not clear whether the DGCEI was conscious of the pending proceedings and show cause notices issued by the CST under Section 73(1) of the Finance Act, 1994 and the proceedings consequent thereto. This aspect is significant since the invocation of the powers of arrest without warrant under Section 90(1) read with Section 89(1)(ii) of the Finance Act 1994 presupposes the arrival of a satisfaction regarding the Assessee having collected service tax but failing to pay to the Department as envisaged in Section 89(1)(d) thereof. The question that would arise is whether there can be a pre-determination regarding the offence under Section 89(1)(d) of the Finance Act 1994 without issuance of a notice under Section 73(1) regarding the alleged evasion of payment of service tax, followed by an adjudication. In such circumstances, the Court is satisfied that the Petitioner has made out a prima facie case and accordingly an interim direction is hereby issued restraining the DGCEI from taking any further coercive action against the Petitioner or any of its officers or employees till the next date of hearing. As far as the proceedings consequent upon the arrest of the MD of the Petitioner pending in the Court of the learned ASJ is concerned, it will proceed in accordance with law and this Court expresses no opinion in that regard. Further, it is made clear that the Petitioner will continue to cooperate with the DGCEI, answer the queries and provide whatever documents are available in its possession as and when required by the DGCEI. - Adjourned for next hearing
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