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2019 (3) TMI 421 - HC - Service TaxValidity of rcovery/garnishee order - short payment of service tax - Section 87 of the Finance Act, 1994 - Held that:- Section 87 of the Finance Act, 1994 contemplates for recovery of any amount payable due to the Central Government which the Central Government under any of the provisions of Chapter V or of the Rules made thereunder is not paid, the Central Excise Officer shall proceed to recover the amount by one or more of the modes mentioned therein. Amount payable by a person is sine qua non for initiating recovery proceedings under the Finance Act, 1994. The discrepancy pointed out by the Audit Wing under para.2 regarding the short payment of service tax amounting to ₹ 38,66,902/- was explained by the petitioner that the same was correctly declared in page.11 of the same return under the head ‘CENVAT Credit details’. A communication was issued to the petitioner indicating that the objections were not accepted by the audit group, show cause would be issued in respect of paras.1 to 5. The show cause notice issued on 29.02.2016 relates to paras.1,3,4 and 5 of the objections raised by the Audit Wing and the said notice is yet to be adjudicated. In such circumstances, without issuing the show cause notice to the short payment of service tax of ₹ 38,66,902/-, if the explanation of the petitioner is not accepted, initiating recovery proceedings by issuing garnishee order to the bankers cannot be substantiated and is not in conformity with Section 87 of the Finance Act, 1994. The garnishee orders impugned dated 29.03.2016 and 22.05.2018 at Annexures- ‘M’ and ‘Z’ respectively are quashed - petition allowed.
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