TMI Blog2020 (3) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Central Government to frame rules for carrying out the provisions of the service tax regime was exhaustive, and there is absolutely nothing to suggest that the said power did not encompass the power to frame a Rule of the kind as Rule 5A, as framed w.e.f. 28.12.2007. Scope of Rule 5A - Held that:- The power vested in the Competent Authorities to recover service tax not levied or paid, or short levied or short paid, or erroneously refunded [under Section 73 of the Finance Act, 1994] would remain a dead letter, if the Competent Authority under the Act is not empowered in terms of the Rule 5A. The said Rule 5A is, even otherwise, relatable to Clause (k) of Section 94 (2), since the said Rule while casting an obligation on the assessee to produce the records, he is obliged to maintain under the Finance Act, 1994, simultaneously empowers the Competent Authorities to ensure compliance of the said obligation. Thus, we reject the submission of learned senior counsel for the Petitioner that the Central Government lacked the authority and competence to frame Rule 5A. Post GST era - Held that:- there is nothing to show that the Parliament intended to grant blanket immunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision under the CGST Act. Petitioner also assails the notices dated 06.11.2019 and 13.01.2020 issued by Respondent No. 2 requiring the Petitioner to provide several documents and records, on the ground that the same is without jurisdiction and authority of law. 4. The case of the Petitioner is that it is a company engaged in the business of providing freight forwarding services to its clients. It has offices across the country, including at Delhi, Gujarat, Haryana, Karnataka etc. For the purpose of service tax, the Petitioner had a centralized registration with the service tax department at Delhi. Petitioner states that it regularly paid taxes and filed service tax returns. 5. The Petitioner states that according to the Respondents, the impugned notice issued on 06.11.2019, was actually not served on the Petitioner. This notice has been filed along with the writ petition and the same reads as follows: M/s Aargus Global Logistics Pct Ltd. (STC NO. AAACP3701AST001) 150, AGL Chambers Village Kapashera, New Delhi-110037. Subject: Intimation for verification of Financial Records Service Tax for the period from 2014-15 (Oct 2014) to 2017-18 (June 2017) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Oct-2014) to 2017-18 (June 2017)-reg. Sir, Please refer to this office letter of even no. 6397 dated 06/11/2019 (copy Enclosed) on the above subject vide which the financial records for service tax audit/Central Excise Audit were sought. In this regard, it is to inform that the same have not been received by this officer so far. It is, therefore, once again requested to furnish the requisite records within 5 working days. If the documents are not submitted within time, then penalty under Section 77 of the finance act 1994 read with section 174 (2)(e) of the Central Goods and Service Tax Act 2017 will be imposed. Encl. as above Sd/- Assistant Commissioner 7. We may at this stage itself notice that though the first prayer of the Petitioner as stated hereinabove, is that Rule 5A of the Service Tax Rules, 1994 be declared to be in conflict with the provisions of the Finance Act, 1994 and beyond the rule making power of Respondent No. 1, there is no specific submission advanced in this regard. The feeble submission advanced by learned Senior Counsel for the Petitioner is that the rule making power does not specifically grant the power to the Central Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed as input services in the manufacturing or processing of goods exported out of India under section 93A;] (hhh) the date for determination of rate of service tax and the place of provision of taxable service [under section 66C];] (i) provide for the amount to be paid for compounding and the manner of compounding of offences; (j) provide for the settlement of cases, in accordance with sections 31, 32 and 32A to 32P (both inclusive), in Chapter V of the Central Excise Act, 1944 (1 of 1944) as made applicable to service tax vide section 83.] (k) * imposition, on persons liable to pay service tax, for the proper levy and collection of the tax, of duty of furnishing information, keeping records and the manner in which such records shall be verified; (l) make provisions for withdrawal of facilities or imposition of restrictions (including restrictions on utilisation of CENVAT credit) on provider of taxable service or exporter, for dealing with evasion of tax or misuse of CENVAT credit; (m) authorisation of the Central Board of Excise and Customs or [Principal Chief Commissioners of Central Excise or] Chief Commissioners of Central Excise to issue instru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer or the audit party, or the cost accountant or chartered accountant, within the time limit specified by the said officer or the audit party or the cost accountant or chartered accountant, as the case may be. 9. From Section 94 of the Finance Act, 1994 it would be seen that the Central Government has been empowered to make Rules for carrying out the provision of Chapter 5 of the Finance Act, 1994, which contains the provisions in relation to levy of service tax. Therefore, the Central Government is empowered to make rules with a view to enforce and recover service tax. Sub-Section (2) of Section 94 opens with the words In particular, and without prejudice to the generality of the foregoing power . . 10. The specific aspects in respect of which the Rules may be framed as enumerated in clauses (a) to (m) of Section 94(2) do not take away the general and omnibus power to make Rules conferred by the opening words of Section 94 (2). The Parliament consciously while enumerating the specific matters in respect of which Rules may be framed, preserved the general Rule making power of the Central Government. The only statutory limitation placed on the said Rule making power is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard, learned Senior Counsel for the Petitioner has drawn our attention to Sections 173 and 174 of the CGST Act, which read as follows: 173. Save as otherwise provided in this Act, Chapter V of the Finance Act, 1994 shall be omitted. 174. (1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, and the Central Excise Tariff Act, 1985 (hereafter referred to as the repealed Acts) are hereby repealed. (2) The repeal of the said Acts and the amendment of the Finance Act, 1994 (hereafter referred to as such amendment or amended Act , as the case may be) to the extent mentioned in the sub-section (1) or section 173 shall not- (a) revive anything not in force or existing at the time of such amendment or repeal; or (b) affect the previous operation of the amended Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (2) of Section 174 have to be read in conjunction. Therefore, what is not affected by the omission of Chapter V of the Finance Act, 1994, is the duty, tax, surcharge, fine, penalty, interest which were due, or may become due even after the enactment of the CGST Act and the omission of Chapter V of the Finance Act, 1994. He submits that such duty, tax, surcharge, fine, penalty, interest could be only in respect of, and arising out of proceedings already initiated, and ongoing proceedings on the date of enactment of the CGST Act. In this regard, learned Senior Counsel for the Petitioner has laid special emphasis on the use of the words in respect of the any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid contained in Clause (e), as also the words and any such investigation, inquiry, verification used in the same clause. We cannot agree with this submission of learned Senior Counsel for the Petitioner. Clause (e) expressly empowers the Competent Authorities to initiate and institute even fresh proceedings under the omitted chapter V of the Finance Act, 1994 and the rules framed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CGST Act. This omission came into effect only from the date of enforcement of the CGST Act and not earlier. Therefore, Chapter V of the Finance Act, 1994 remained on the statute book till the enforcement of the CGST Act. Secondly, even this Amendment of the Finance Act, 1994 (by Section 173 of the CGST Act) saves what was otherwise provided in the Act, which included what is provided in Section 174. Therefore, to the extent the provisions of Chapter V of the Finance Act, 1994 are saved, they do not stand omitted by amendment of the Finance Act, 1994. Thirdly, the Rules under Chapter V of the Finance Act, 1994, were framed, as noticed hereinabove, to carry out the provisions of Chapter V of the Finance Act, 1994. The rules are subordinate legislation and without the said Rules, the provisions of Chapter V of that Act itself could not be worked. The Service Tax Rules were framed under Chapter V of the Finance Act, 1994. Those rules are, therefore, saved by Clause (b) of Section 174 (2) which states that, inter alia, anything duly done under the Chapter V of the Finance Act, 1994 shall not be affected by the amendment of the Finance Act, 1994. Thus, the amendment of the Finance A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondents vide the notice dated 06.11.2019, read with notice dated 13.01.2020. We do not find any merit in this submission as well. Rule 5A (2) of the Service Tax Rules, as noticed hereinabove, empowers the Competent Officer to demand records mentioned (sic: maintained) or prepared in terms of Sub Rule (2) of Rule 5. This takes us to Rule 5 (2) of the Service Tax Rules which reads as follows: (2) Every assessee shall furnish to the Superintendent of Central Excise at the time of filing of return for the first time or the 31st day of January, 2008, whichever is later, a list in duplicate, of- (i) all the records prepared or maintained by the assessee for accounting of transactions in regard to,- [(a) providing of any service;] (b) receipt or procurement of input services and payment for such input services; (c) receipt, purchase, manufacture, storage, sale, or delivery, as the case may be, in regard of inputs and capital goods; (d) other activities, such as manufacture and sale of goods, if any. (ii) all other financial records maintained by him in the normal course of business. 17. Thus, the assessee is obliged to maintain and provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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