Contents -
1. Machinery for recovery : Section 73 (Show Case Notice)
2. Order in original : Section 73(2)
3. Voluntary Payment : Section 73(3)
4. Service Tax collected from any person to be deposited with Central Government : Section 73A
5. Interest on amount collected in excess : Section 73B
6. Provisional attachment to protect revenue in certain cases : Section 73C
7. Publication of information in respect of person in certain cases : Section 73D
Introduction -
Excise officer empowered to demand the tax from service provider who is registered and filed the returns with the department. after verification of the returns, if the general officer is of the conclusion, that the tax paid by the the assessee. The incorrect to the extent of the information submitted, may issue the notice of demand for the disputed tax not paid by the assessee. In this chapter we will discussed the procedure of recovery of tax with reference to the connected section.
Q: Discuss the recovery of of service tax not paid or paid or short levied or short paid erroneously refunded (April 2007).
Ans : Highlights -
1. Machinery for recovery
2. Order in original
3. Voluntary payment
4. Service tax collected to be deposited with government
5. Interest on amount excess collected
6. Provisional attachment
7. Publication of information
1. Machinery for recovery : Section 73 (Show Case Notice) -
A) Where any service tax has not been levied or paid or has been shot levied or short paid erroneously refunded. The Central Excise officer may within one year from the relevant date, serve notice on person changeable with the service tax which has not been levied or paid, or which has been shot levied or short paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why we should not paid the amount specified in the notice:
Provided that where any service tax has not been levied or paid or has been shot levied or short paid or erroneously refunded by reason of
(A) fraud or
(B) collusion or
(C) willful miss statement or
(D) suppression of facts or
(E) contravention of any of the provisions of this chapter or of the rules made there under with intent or evade payment of service tax. By the person changeable with the service tax or his agent, the provisions of this sub - section shall have effect, as if, for the words "one year", the words "five years."had been substituted.
Explanation :
Where the service of the notice is stayed by an order of court, the period of such a stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be.
2. Order in original : Section 73(2) -
The central excise officer shall after considering the Representation, if any made by the person on whom notice is the served under sub-section (1) determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess the amount specified in the notice) and thereupon such person shall pay the amount so determined.
3. Voluntary Payment : Section 73(3) -
Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid :
Explanation :
The person may pay the amount of service tax by his own ascertainment for the following reasons :
1) Service tax has not been levied
2) Paid or has been short-levied
3) Short-Paid
4) Erroneously refunded
When the person paid such amount to government treasury, it will not require to assessing officer to issue a notice for the payment of service tax for the above mentioned reasons.
Provided that the central excise officer may determine the amount of short payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and then the central excise officer shall proceed to recover such amount in the manner specified in this section, and the period of one year referred to in sub-section (1) shall be counted from the date of receipt of such information of payment.
Explanation :
For the removal of doubts, it is hereby declared that the interest under section 75 shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of service tax or erroneously refunded service tax, if any as may be determined by the central excise officer, but for this sub-section.
Section 73(4) : Reasons for non applicability of section 73(3) -
Nothing contained in sub section (3) shall apply to a case where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of -
1) Fraud
2) Collusion
3) Willful miss-statement
4) Suppression of facts
5) Contravention of any of the provisions of this chapter or of the rules made there under with intent to evade payment of service tax.
Explanation :
The payment of Service Tax is payable for the reason given under section 73(1), There is no intention of the person who is tax payer under the act responsible for the payment.
But there reasons given under this sub section the person who is tax payer under the act avoids paying the tax intentionally.
Section 73(5) : Non applicability of section 73(3) -
The provisions of sub-section (3) shall not apply to any case where the service tax had become payable or ought to have been paid before the 14th day of May, 2003.
Section 73(6) : Relevant Date -
For the purpose of this section, relevant date means,-
1) In the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied for short paid -
a) Where under the rules made under this chapter, a periodical return showing particular of service tax paid during the period of which the said return relates, is to be filed by an assessee, the date on which such return is so field.
b) Where no periodical return as aforesaid is filed, the last date of which such returns is to be filed under the said rules.
c) In any other case the date on which the service tax is to be paid under this chapter or the rules made there under.
2) In a case where the service tax is provisionally assessed under this chapter or the rules made there under, the date of adjustment of the service tax after the final assessment thereof.
3) In a case where any sum, relating to service tax, has erroneously been refunded, the date of such refund.
Section 73(4A) : Declaration by service provider -
Not with standing anything contained in sub section (3) and (4) where during the course of any audit, investigation for verification is it found that any service tax has not been levied or paid or has been shot paid or erroneously refunded but the true and completed detail of transaction are available in the specified record the person chargeable to service tax or to whom erroneous refund has been made made, may pay the service tax in full or in part as he may accept to be the amount of tax chargeable or erroneously refunded along with the interest payable there on under section 75 and penalty equal to 1% of such tax, for each month for the period during which the default continuous up to a maximum of 25% of the Tax amount, before service of notice on him and inform the central excise officer of such payment in writing, who on receipt of such information shall not serve any notice under sub section (1) in respect of the amount so paid and proceeding in respect of the said amount of service tax shall be deemed to have been concluded :
Provided that the central excise officer may determine the amount of service tax, if any due from such person, which in his opinion remains to be paid but such person and shall proceed to recover such amount in the manner specified in sub section (1).
Explanation :
For the purpose of this sub section and section 78 "Specified record means record including computerized data as are required to be maintained by an assessee in accordance with law for the time being in force or where there is no such requirement, the invoice recorded by the assessee in the books of accounts shall be considered as the specified records".
4. Service Tax collected from any person to be deposited with Central Government : Section 73A -
A) Any person who is liable to pay Service Tax under the provisions of this chapter or the rules made their under and has collected any amount in excess of the service that assessed or determined and paid on any taxable service under the provision of this chapter or the rules made there under from the recipient of taxable service in any manner as representing service tax shall forth with pay the amount so collected to the credit of the central government.
B) Where any person who has collected any amount, which is not required to be collected from any other person in any manner as representing service tax, such person shall forth with pay the amount so collected to the credit of the central government.
C) Where any amount is required to be paid to the credit of the central government under sub section 1 or sub section (2) and the same has not been so paid, the central excise officer shall serve on the person liable to pay such amount, a notice requiring him to show cause why the said amount as specified in the notice should not be paid by him to the credit of the central government.
D) The central excise officer shall, after considering the representation if any, made by the person on whom the notice is served under sub section (3), determine the amount due from such person not being in excess of the amount specified in the notice and their upon such person shall pay the amount so determined.
E) The amount paid to the credit of the central government under sub section (1) or subsection (2) or subsection (4) shall be adjusted against the service tax payable by the person on finalization of assessment or any other proceeding for determination of service tax relating to he taxable service referred to in sub section (1).
F) Where any surplus amount is left and after the adjustment under sub section (5), such amount shall either be credited to the consumer welfare fund referred to in section 12C on the central Excise Act, 1944 or, as the case may be refunded to the person who has Borne the incidence of such amount in accordance with the provision of section 11B of the said act and such person may make a an application under that section in such cases within 6 months from the date of public notice to be issued by the central excise officer for the refund of such surplus amount.
5. Interest on amount collected in excess : Section 73B -
Where an amount has been collected in excess of the tax assessed or determined and paid for any taxable service under this chapter or the rules made there under from the recipient of the service. The person who is liable to pay such amount as determined under sub section (4) of section 73A shall in additional to the amount, be liable to pay interest at such rate not below 10% and not exceeding 24% per annum, as is for the time being fixed by the central government by notification in the official Gazette, from the first day of the month succeeding the month in which the amount ought to have been paid under this chapter, but for the provision contained in sub section (4) of section 73A ,till the date of payment of such amount.
Provided that in such cases where the amount becomes payable consequent to issue of an order, instruction or direction by the board under section 37B of the Central Excise Act, 1944 and such amount payable is voluntary paid in full, without reserving any right to appeal against such payment at any subsequent state, within 45 days from the date of issue of such order, instruction or direction, as the case may be no interest shall be payable and in other cases, the interest shall be payable on the whole amount including the amount already paid.
Provided further that in the case of service provider, whose value of taxable services provided in a financial year does not exceed 6 lakhs rupees during any of the financial year covered by the notice issued under sub section (3) of section 73A or during the last preceding financial year, as the case may be, such rate of interest shall be reduced by 3% per annum.
Explanation 1 :
Where the amount determined under sub section (4) of section 73A is reduced by the Commissioner (appeal), the appellate Tribunal or as the case may be the court the interest payable there on under this section shall be on such reduced amount.
Explanation 2 :
Where the amount determined under sub section (4) of section 73A is increased by the Commissioner (appeal) the appellate Tribunal or, as the case may be, the court the interest payable there on under this section shall be on such increased amount.
6. Provisional attachment to protect revenue in certain cases : Section 73C -
A) Where during the pendency of any proceeding under section 73 of section 73A the central excise officer is of the opinion that for the purpose of protecting the interest of revenue it is necessary so to do, he may with the previous approval of the Commissioner of Central Excise by order in writing, attach provisionally any property belonging to the person on whom notice is served under sub section (1) of section 73 or sub section (3) of section 73A, as the case may be, in such manner as may be prescribed.
B) Every such provisional attachment shall cease to have effect after the expiry of the period of six months from the date of the order made under sub section (1) provided that the chief commissioner of Central Excise May, for reasons to be recorded in writing extend the aforesaid period by such further period for periods as the think fit, so however, that the total period of extension shall not be any case exceed 2 years.
Explanation :
a) The opinion of Central Excise and Custom Officer to protect the interest of revenue.
b) He will take approval from commissioner of Central Excise in writing for attachment the property of the person for recovery of the dues.
c) The attachment will be provisionally.
7. Publication of information in respect of person in certain cases : Section 73D -
1. If the central government is of the opinion that it is necessary or expedient in the public interest to publish the name of any person and any other particulars. Relating to any proceeding under this chapter in respect of such person, it may cause to be published such names and particulars in such manner as may be prescribed.
2. No Publication under this section shall be made in relation to any penalty imposed under this chapter until the time for presenting an appeal to the Commissioner (Appeals) under section 85 or the Appellate Tribunal under section 86, as the case may be has expired without an appeal having been presented or the appeal is presented, has been disposed of.
Explanation :
In the case of a firm, company or other association of person, the names of the partners, of the firm, director, managing agent, secretaries and treasurer's or managers, of the company or the member of the association, as the case may be shall also be published, if in the opinion of the central government circumstances of the case justify it.
RELATED NOTES -
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