CANON INDIA CASE UPDATE SERIES PART III: GST VS CENTRAL EXCISE/SERVICE TAX ACT

In our previous update we discussed about CANON INDIA case wherein it was analyzed that the notification issued for defining powers of proper officer issued under the Customs Act, 1962 was not proper as it was issued by referring to the provisions of section 2(34) rather than provisions of section 6 of the Customs Act, 1962. In the present update, we will discuss whether the analogy laid down by the Hon’ble Supreme Court that DRI is not proper officer to issue show cause notice under section 28 of the Customs Act, 1962, can be applied to Central Excise and Service Tax matters or not. We further submit that the provisions as regards demand of duty/tax under Central Excise Laws and Service Tax Laws are pari materia so the analysis will be applicable for both the laws.

If the provisions of Central Excise Act, 1944 and the Finance Act, 1944 are observed, it is found that for issuance of show cause notice under section 11A of the Central Excise Act, 1944 and under section 73 of the Finance Act, 1994, the term “Central Excise Officer” has been used as compared to the Customs Act, 1962, where the term ‘proper officer’ has been used. Nonetheless, the definition of ‘Central Excise Officer’ as given under section 2(b) of the Central Excise Act, 1944 reads as follows:-

"Central Excise Officer" meansthe [Principal Chief Commissioner of Central Excise, Chief Commissioner of Central Excise, Principal Commissioner of Central Excise], Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, [Joint Commissioner of Central Excise] [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act.]”

It is pertinent to mention that the definition of ‘Central Excise Officer’ as stated above is very wide in its ambit so as to include any officer of the Central Excise Department. Consequently, even the Directorate General Of Central Excise Intelligence would be considered as the ‘Central Excise Officer’ for the purpose of issuance of show cause notice under the provisions of Central Excise Laws and Service Tax Laws. Therefore, the dispute as regards the fact whether DGCEI is proper officer for the purpose of issuance of show cause notice does not arise under the Central Excise Laws or the Service Tax Laws. Hence, in our opinion, there is no relevance of the decision of the Supreme Court as far as the provisions of Central Excise Laws and Service Tax Laws are concerned.

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CANON INDIA CASE UPDATE SERIES PART III: GST VS CENTRAL EXCISE/SERVICE TAX ACT

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