CALL BOOK CASES – SERVICE TAX

[Mr. M. GOVINDARAJAN]

A call book acts as a set of records of those central excise and service tax cases where the demand could not be realized due to reasons such as the department having gone in appeal and injunction from courts, etc.

The Board’s Circular No. 162/73/95-CX, dated 14.12.1995 provides that the following four types of cases that are pending adjudication are to be transferred  to the Call Book:

• Cases in which the Department has gone in appeal in a quasi judicial or a judicial authority - This category refers to cases wherein on identical issue, the Department has filed appeal before higher appellate authority against the order passed by the lower authority, which was against the Government.
• Cases where injunction has been issued by Supreme Court/High Courts – Vide Circular No. 992/16/2014-CX, dated 26.12.2014 the Board clarified that Cases admitted by the Settlement Commission may be transferred to the Call book, as it is already covered under this Category.  It has been further clarified that where there are multiple noticees, the case can be transferred only in respect of those noticees who have made application in the Settlement Commission, and whose case has been admitted by Settlement Commission. Such cases should be taken out of the Call-Book after Settlement Order has been issued or where the case has been reverted back for adjudication. 
• Cases where audit objections were contested;
• Cases where the Board has specifically ordered the same to be kept pending and to be entered in the call book.   For example under this category, the issue of inclusion of “after sales service and pre-delivery charges in the assessable value” can be mentioned. First, vide Circular No. 909/29/09-CX, CBEC directed all its field formations to transfer SCN issued on the subject matter to call book. Later, vide Circular No. 936/36/2010-CX, dated 27/10/2010, it directed field formations to decide the cases pending in the call book on the issue of inclusion of after sales service and pre-delivery inspection charges in the Assessable value in the light of CESTAT Order dated 13.8.2010.

Once transferred to the Call Book, the cases are not to be included in the list of cases pending adjudication. The cases in the call book are to be reviewed every month to identify any cases that are to be taken out of the call book and adjudicated.

The  C&AG pointed out in its audit report that in spite of clear instructions of the Board on transfer of cases to call book, there are several other types of cases, which are transferred to call book in violation of the instructions of the CBEC.  These are-

• Cases ordered for de-nov adjudication by the Courts;
• Cases pending for want of Chemical Examiner’s report;
• Provisional assessment cases.

The Director General of Inspection (Customs and Central Excise) has reiterated the need for monthly review and stated that the review of call book cases may result in substantial reduction in the number of unconfirmed demands in call book.

C&AG in its audit report tabulated the date relating to performance of the department in respect of clearance of call book cases in service tax during the recent years and observed that the pendency of call book cases continues to be very high.

Call book cases pending on 31^st March

Year	Cases	Revenue involved (in Cr. Rs.)	Age wise pendency
			< 1 year	1 – 2 years	2 – 5 years	> 5 years
FY 11	6430	15667.47	3003	2065	1135	227
FY 12	8390	20273.45	2736	3157	2162	295
FY 13	8637	21339.85	3203	2451	2673	310

Source: C&AG Report 6/2014
The C&AG also advised that since the amount involved in these cases are also in the increase the monitoring of these cases should be done effectively.