TMI Blog2015 (12) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... No cogent reason has been given justifying the action for attaching the property. Only a cursory remark has been indicated namely that there is fair possibility of the funds getting dissipated. In our opinion, cogent and sufficient justification was found lacking in the satisfactory note. The attachment proceedings could not be initiated on such ground. - action of the respondents was not malafide and consequently considering this fact, we issue only a warning to respondents 2 and 3 that they need to be careful while resorting to exercise the powers contemplated under Rule 3 of the Rules of 2008. Such exercise of power has to be resorted to with utmost circumspection and with maximum care and caution. - impugned orders are quashed - Decided in favour of assessee. - Writ Tax No. - 872 of 2015 - - - Dated:- 30-11-2015 - Hon'ble Tarun Agarwala And Hon'ble Vinod Kumar Misra, JJ. For the Petitioner : Nishant Mishra For the Respondent : Ashok Singh ORDER We have heard Sri Nishant Mishra, learned counsel for the petitioner and Sri Ashok Mehta, learned Senior Counsel assisted by Sri Ashok Singh, learned counsel for the respondents. The petitioner is a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents to place the original records relating to the proceedings towards the attachment of the bank accounts and satisfaction so recorded. We have perused the original records and the affidavits filed by the respondents. In exercise of the powers contained in 73 of the Finance Act, 1994 read with Section 94, the Central Government promulgated the Service Tax (Provisional Attachment of Property) Rules, 2008 (hereinafter referred to as the Rules of 2008). Rule 3 provides a procedure for provisional attachment of property and Rule 4 provides what property could be attached. For facility, Rule 3 and Rule 4 are extracted hereunder: 3. Procedure for provisional attachment of property: (1) If the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, is satisfied that it is necessary or expedient, for the purpose of protecting the interest of revenue, during the pendency of any proceeding under Section 73 or Section 73 of the Act, to attach provisionally any property belonging to a person on whom a notice has been served under sub-section (1) of section 73A or sub-section (3) of Section 73 A of the Act, shall after due verification of the facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly attached and, in absence of immovable property, attachment of movable property could be done. In furtherance to the Rules of 2008, the Central Board of Excise Customs, New Delhi issued a circular no. 103 dated 1st July, 2008. Paragraph 2 (i) to Paragraph 2(v) are relevant. The said relevant portion are extracted hereunder: 2. In this connection the following guidelines are issued to maintain uniformity in its implementation by field formations. (i) The proceedings for provisional attachment can be initiated only after issue of Show Cause Notice under Section 73 or Section 73 A of the Act. (ii) During the pendency of the proceedings under Section 73 or 73 A of the Act, if the Central Excise Officer is of the opinion that, in order to protect the interests of revenue, it is necessary to attach the property of the notice, he shall prepare a proposal in the format prescribed under the sub-rule (1) of rule 3 of the Service Tax (Provisional Attachment of Property) Rules, 2008, issued vide Notification No. 30/2008-S.T., dated the 1st July, 2008, and forward the same to the jurisdictional Commissioner of Central Excise for his approval, except in cases where the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisional attachment of the property and the Central Excise Officer before whom the proceedings under Section 73 or 73 A of the Act are pending, may, by order in writing, attach the said property. The Commissioner shall grant such approval, or, where proceedings under Section 73 or 73 A of the Act are pending before him, order the attachment of the property, within fifteen days of holding of personal hearing. A copy of the order of provisional attachment should be served by the Central Excise Officer in the same manner as prescribed under Section 37 C of the Central Excise Act, 1944, as made applicable to service tax vide section 83 of the Act. Paragraph 2(iii) of the Circular indicates that the provision for attaching a property provisionally is of an extraordinary nature and should be resorted to in the utmost circumspection and with maximum care and caution. The authorities should have a reasonable belief that the assessee may dispose of, or remove the property which would not be in the interest of the revenue and, therefore, a firm opinion should be formed that the interest of the revenue is required to be protected. The circular contemplates that once an opinion is formed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons, the Court issued a show cause to the respondent nos. 2 and 3 to show cause as to why disciplinary proceeding should not be instituted against them in terms of paragraph 2 (iii) of the Circular. We perused the replies and we find that the reasons indicated by them is a mere afterthought and an eye-wash. New grounds have been taken to justify their action which in our opinion was not available. Considering the totality of the facts that have been brought on record we find that the action of the respondents was not malafide and consequently considering this fact, we issue only a warning to respondents 2 and 3 that they need to be careful while resorting to exercise the powers contemplated under Rule 3 of the Rules of 2008. Such exercise of power has to be resorted to with utmost circumspection and with maximum care and caution. In the light of the aforesaid, the impugned orders are quashed. The Writ Petition is allowed with cost of ₹ 25,000/-, which shall be paid by the respondents to the petitioner within four weeks from today. The Court has been informed that 15th December, 2015 has been fixed in the proceedings under Section 73 of the Act pursuant to the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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