Service Tax

1.1 Appeals to the Commissioner (Appeals)

1.1.1 Appeals on review by the department (Section 84)

1. An application may be filed before the CCE(A) by an adjudicating authority subordinate to the CCE on the direction of the CCE who is satisfied that the order of the adjudicating authority lacks legality or propriety for determination of points arising out of the order.
2. The CCE shall direct such subordinate authority within 3 months from the date of communication of Order-In-Original and subordinate authority shall make an application before the CCE(A) within 1 month from the date of receipt of such direction / order.

1.1.2 Other Appeals by the assessee / department (Section 85 & Rule 8)

1. An appeal may be filed before the Commissioner of Central Excise (Appeals) [“CCE (A)”] by any person aggrieved by an order passed by an adjudicating authority below the rank of a Commissioner of Central Excise (“CCE”)
2. The appeal is to be filed in duplicate within 2 months of receipt of adjudication order in Form ST–4 along with statement of facts, grounds of appeal, and a copy of decision or order appealed against.
3. For filing appeals an assessee is required to make a mandatory fixed pre-deposit of duty demanded [See para 9.13]
4. Appropriate court fees stamp would be applicable.

1.2 Appeals to the Appellate Tribunal [Section 86 & Rule 9]

1.2.1 Appeals by the assessee

1. An appeal may be filed before the Tribunal where an assessee aggrieved by an order passed by a CCE u/s. 73 or 83A or an order passed by a CCE (A) u/s. 85. However in respect of orders passed by CCE(A) in matters relating to grant of rebate on inputs/ input service used for export of services the remedy would be to file a revision application before Central Government u/s. 35EE of Central Excise Act, 1944 .
2. The appeal is to be filed in quadruplicate within 3 months of receipt of order to be appealed against in Form ST-5 along with statement of facts, grounds of appeal and copies of order appealed against (including one certified copy).The Tribunal may admit filing of appeal after expiry of said period if it is satisfied that there was a sufficient cause for not presenting the appeal within the said period.
3. The filing fees is based on the quantum of demand which is as follows:

In addition to the above, a fee of ₹ 500/- is payable for a application (other than that filed by the CCE / AC / DC) for rectification of mistake in the Tribunal’s orders or for restoration of an appeal or for any other purpose.

4. For filing appeals an assessee is required to make a mandatory fixed pre-deposit of duty demanded [See para 9.13]

1.2.2 Appeal by the department

1. An application to the Tribunal maybe filed by the –
   1. CCE on the direction of the Committee of Chief Commissioners of Central Excise (consisting of 2 Chief Commissioners) objecting to any order passed by a CCE u/s. 73 or 83A or
   2. A Central Excise officer on the direction of the Committee of Commissioners of Central Excise (consisting of 2 Commissioners) objecting to any order passed by the CCE(A) u/s. 85.
2. The application is to be filed in Form ST-7, in quadruplicate, within 4 months from the date on which the order sought to be appealed against is received by the Committee of Chief Commissioners or by the Committee of Commissioners as the case may be.
3. The appeal shall be accompanied by statement of facts, grounds of application, and
   1. Copy of order passed by CCE (including one certified copy) and copy of the direction issued by the Committee of Chief Commissioners; or
   2. Copy of the order passed by the CCE(A) (including one certified copy) and copy of the direction issued by the Committee of Commissioners, as the case may be.

1.2.3 Memorandum of cross-objections (Section 86 & Rule 9)

1. An assessee or the CCE or a Central Excise Officer subordinate to the CCE may present a memorandum of Cross-objections, within 45 days from receipt of notice or information about appeal filed.
2. The memorandum of Cross-objections is to be filed in quadruplicate in Form ST-6.

1.3 Mandatory fixed pre-deposit for filing appeals

1.3.1 An assessee is required to make a fixed mandatory pre-deposit of certain percentage of adjudicated demands (‘duty / tax demanded’ or ‘penalty’) for filing an appeal as under:

Notes

1. “Duty / tax demanded” includes duty/tax collected (even if not payable), erroneous CENVAT credit taken, amount payable u/r. 6 of CENVAT Credit Rules, 2004.
2. The above provisions shall not apply to stay application/appeals pending as on 6-8-2014.

1.4 Refunds

1.4.1 In the event the assessee has to claim a refund he has to comply with section 11B of the Central Excise Act, 1944 which is made applicable to service tax.

1.4.2 A refund claim must comply with the following conditions:

1. An application for refund should be made. No specific form is prescribed for making such application..
2. It should be filed before the expiry of the limitation period of one year from the relevant date as specified in Explanation to Section 11B one of which is from the date of payment of tax.
3. Proof should be adduced that the incidence of tax has not been passed on to any person i.e. tax has been borne by the applicant.

1.5 Penal Consequences

Notes:

1. If the service tax amount gets increased in any appellate proceeding, then the benefit of reduced penalty (i.e. 25%) under para (iii) in respect of Section 76 and under para (iv) in respect of section 78 shall be admissible if service tax, interest and reduced penalty (i.e. 25% of the increase in penalty) is paid within 30 days of receipt of such appellate order.
2. If the service tax amount gets modified in any appellate proceeding where penalty u/s. 78 is sought to be imposed, then the person liable to pay service tax shall be liable to pay the modified tax, interest and penalty as specified in the order.
3. Further, the assessee can file an appeal and he can keep the matter alive even if he opts for the above options proposed except option under para (ii) in respect of section 76 or option under para (iii) in respect of section 78, since in such cases the proceedings are deemed to be concluded.
4. Where the proceedings under a SCN are concluded by exercising option under para (ii) in respect of section 76 or option under para (iii) in respect of section 78, then the proceedings for imposition of personal penalty u/s. 78A on directors, managers, secretary and other officers in charge of company shall also be deemed to have been concluded.

1.6 Prosecution under service tax law

1.6.1 The prosecution provisions under the service tax law are governed by section 89. Further sections 9A, 9AA, 9B, 9E and 34A of the Central Excise Act, 1944 have been made applicable to service tax. These provisions together constitute the provisions relating to prosecution of offences which are briefly described below.

1.6.2 Section 89 prescribes the offences and the quantum of punishment. The punishable offences enumerated in section 89(1) are the following :

1. knowingly evading payment of service tax.
2. availment and utilisation of credit without actual receipt of taxable service or excisable goods either fully or partially in violation of the Act or Credit Rules;
3. maintenance of false books of account;
4. failure to supply information or supply of false information;
5. failure to pay to the Government any amount collected as service tax beyond a period of six months from the date on which such payment became due.

1.6.3 The quantum of punishment imposable is detailed in the table below:

1.6.4 The provisions of ss. 9A, 9AA, 9B, 9E and 34A of the Central Excise Act, 1944 have been made applicable to service tax. These are briefly dealt with below:

1. The offences would be ‘non-cognizable’ i.e. an offence in which a police officer has no authority to arrest without a warrant. Further the Principal Chief Commissioner/Chief Commissioner of Central Excise is also empowered to compound the offences on payment of the compounding amount as may be prescribed [s. 9A].
2. If an offence is committed by a company (which includes a firm), the persons liable to be proceeded against and punished are: (a) the company; (b) every person, who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business except where he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence; and (c) any director (who in relation to a firm means a partner), manager, secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom the offence has been committed. [s.9AA]. The court is empowered to publish the name, place of business, etc. of persons convicted under the Act [s. 9B]
3. In case of a person who is less than 18 years of age, the court, under certain circumstances, is empowered to release the accused on probation of good conduct under section 360 of the Code of Criminal Procedure, 1973 or to release the offenders on probation under the Probation of Offenders Act, 1958. [s. 9E]
4. The imposition of penalty would not prevent infliction of other punishment on the offender. [s. 34A].

1.14 Cognisance of offences and power to arrest

The provisions relating to arrest of persons for offences under the Act are summarised below:

1. Arrest can be made only in case of cognisable offence. Cognisable offences means an offence where the person can be arrested without ‘warrant’;
2. Failure to pay tax collected beyond 6 months from due date where the ‘amount’ exceeds ₹ 50 lakh (200 lakh post 14-5-2016) is the only cognisable offence. In case of all other punishable offences (viz., knowingly evading service tax, availing bogus credits, supplying false information, etc.) arrest cannot be made.
3. If the Principal Commissioner/Commissioner of Central Excise has reason to believe that any person has committed an offence u/s. 89 of the Act where the ‘amount’ exceeds ₹ 50 lakh (₹ 200 lakh post 14-5-2016) he may, by general or special order, authorise any officer of Central Excise, not below the rank of Superintendent of Central Excise, to arrest such person.
4. Where a person is arrested for any cognizable offence [see point (ii) above], every officer authorised to arrest a person shall, inform such person of the grounds of arrest and produce him before a magistrate within 24 hours.
5. All arrests shall be carried out in accordance with the provisions of the CrPC relating to arrests.

Repeal and Savings - CGST Act

As per sec 174(2) of Central Goods and Services Tax Act, 2017 - The repeal of the amendment of the Finance Act, 1994 (32 of 1994) shall not—

1. revive anything not in force or existing at the time of such amendment or repeal; or
2. affect the previous operation of the amended Act or repealed Acts and orders or anything duly done or suffered thereunder; or
3. affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Act or repealed Acts or orders under such repealed or amended Acts:

   Provided that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded on or after the appointed day; or

4. affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or
5. affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed;
6. affect any proceedings including that relating to an appeal, review or reference, instituted before on, or after the appointed day under the said amended Act or repealed Acts and such proceedings shall be continued under the said amended Act or repealed Acts as if this Act had not come into force and the said Acts had not been amended or repealed.

(3) The mention of the particular matters referred to in sub-sections (1) and (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeal