M/S.Infant Travels Pvt Ltd., v. The Customs & Excise
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 01.07.2016
CORAM:
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.No.18568 of 2016 & W.M.P.No.16274 of 2016 M/s.Infant Travels Pvt. Ltd., Rep. By is Managing Director - Mr.John Louis No.5, Krishna Temple Road Subedar Garden, Indira Nagar Bangalore-560 038 ... Petitioner vs.
1.The Customs & Excise Settlement Commission Additional Bench II Floor, Narmada Block, Customs House 60, Rajaji Salai Chennai - 600 001 2.The Principal Commissioner of Service Tax Service Tax -II Commissionerate TTMC/BMTC Building, Old Airport Road Domlur Bengaluru-560 071 ... Respondents PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of certiorarified Mandamus calling for the records of the Respondent No.1 made in final order No.30/2016 dated 25.04.2016 pertaining to Settlement Application No.SA (ST) 22/2015-SC of the petitioner and quash the same and consequently direct the Respondent No.1 to pass appropriate order under Section 32F. For Petitioner :
Mr.A.R.L.Sundaresan Senior Counsel for Mr.A.L.Gandhimathi For Respondent :
Mr.A.P.Srinivas Senior Panel Counsel
O R D E R
Heard Mr.AR.L. Sundaresan, learned senior counsel for the petitioner and Mr.A.P.Srinivas, learned senior panel counsel appearing for the respondent. With the consent of learned counsel appearing on either side, the writ petition itself is taken up for final disposal.
2. The petitioner has filed this writ petition challenging the order passed by the Customs, Central Excise and Service Tax Settlement Commission dated 20.04.2015. The issue involved in the writ petition lies on a narrow compass. It would suffice to refer to the following facts for the purpose of disposal of the writ petition. The petitioner filed an application before the Settlement Commission for settlement of the dispute arising out of show-cause notice dated 27.02.2003 issued by the second respondent. The petitioner is registered with the Service Tax Department under the taxable service category of 'Rent-a-cab Scheme Operator Services''.
The case of the petitioner was taken up for investigation by the Anti-Evasion Wing of the Service Tax Commissionerate, Bangalore and summons were issued to the Managing Director, on whose behalf the Manager of the company appeared before the investigation agency. Thereafter, after verification of the documents and scrutiny of the Service Tax liability Statement, show-cause notice was issued to the petitioner calling upon him to show-cause as to why the Service Tax amounting to Rs.10,94,71,349/- payable with 'Rent-a-cab Scheme Operator Services'' provided during the period 01.04.2010 to 30.09.2012 under the proviso to Section 73(1) of the Finance Act, interest and penalty should not be levied. The Settlement Commissioner allowed the application to be proceeded in which the petitioner had admitted his liability to a certain extent.
After inviting the report from the jurisdictional Commissioner, personal hearing was granted by the Commission and the case was taken up for consideration.
3. From the impugned order, more particularly from paragraph 6, it is seen that there is no dispute or controversy with respect to the following matters, namely turnover, sale of fuel, income from educational institutions and other income. With regard to income from hospitality services, the petitioner themselves admitted the liability. The only issue which was not decided in favour of the petitioner is with regard to income from SEZ. However, on a perusal of Paragraph 6.10 of the impugned order, it is seen that the claim for exemption for the income of Rs.81,10,41,888/- from the SEZ units for the year 2011-12 and 2012-13, the Commissioner has referred to a report submitted on 06.04.2016 and came to a conclusion that petitioner has not furnished the exclusive income at the time of
investigation and pointed out that it is not possible to furnish the quantum of taxable income received from SEZ units.
4. The petitioner's case is that they were never put to notice about such a report and had they been informed about the same, they would have definitely conceded to the claim and also paid tax .
Section 32E of the Act deals with Application for Settlement of cases and in terms of sub-Section (5) of Section 32E, after examination of the records and the report of the Principal Commissioner of Central Excise or Commissioner of Central Exercise received under sub-Section (3) and the report, if any, of the Commissioner (Investigation) of the Settlement Commissioner under Sub-section (4), an opportunity has to be granted to the applicant before the Settlement Commission to be heard either in person or through his representative duly authorized in this behalf and after examining such further evidence, as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of the Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Principal Commissioner of Central Excise and Commissioner of Central Excise] and Commissioner (Investigation) under SubSection (3) or sub-section (4).
5. On a reading of the impugned order passed by the Settlement Commission, it is evidently clear that this vital opportunity was not granted to the petitioner before the case came to be referred back to the jurisdictional Commissioner for adjudication. The respondents are not in a position to justify the impugned order as procedural error looms large on the face of the impugned proceedings. Therefore, the impugned order to that extent, namely with regard to the income from SEZ, calls for interference. The learned senior counsel appearing for the petitioner informed the Court that after the impugned order was passed and before filing the writ petition, the petitioner has further admitted the liability and paid a sum of Rs.2,31,12,732/- apart from the payment already made i.e., Rs.6,10,21,642/-. This aspect of the matter shall also be considered by the Settlement Commission while taking up the case for settlement of issue, viz., Income from SEZ, which has been remanded for consideration.
Accordingly, the writ petition is partly allowed and the impugned order is set aside insofar as the findings rendered by the Commissioner under the head "Income from SEZ" and the matter is remanded to the Settlement Commissioner for fresh consideration and the findings rendered on the other issues stand confirmed and the case can be settled on those lines. The
Settlement Commissioner is directed to afford an opportunity of personal hearing to the petitioner and decide the issue in accordance with the provisions of the statute. No costs.
Consequently, the connected miscellaneous petition is closed. Sd/- Assistant Registrar(CS III) //True Copy// Sub Assistant Registrar gpa To
1. The Customs & Excise Settlement Commission Additional Bench II Floor, Narmada Block, Customs House 60, Rajaji Salai Chennai - 600 001
2. The Principal Commissioner of Service Tax Service Tax -II Commissionerate TIMC/BMTC Building, Old Airport Road Domlur Bengaluru-560 071 1 cc to M/s.AL.Ganthimathi, Advocate, sr.37214 W.P.No.18568 of 2016 & W.M.P.No.16274 of 2016 mpi co kra 12.07.2016