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Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
(Service Tax Wing)
CIRCULAR No. 196/06/2016-ST
New Delhi, the 27th July, 2016.
To
All Principal Chief Commissioners of Central Excise and Service Tax/ Customs
All Chief Commissioners, Central Excise and Service Tax / Customs.
Principal Directors General of Goods & Service Tax/ Systems/ Central Excise
Intelligence.
Director General of Audit/ Tax Payer Services
All Principal Commissioners/ Commissioners of Central Excise & Service Tax
All Commissioners of Central Excise (Audit) / Service Tax (Audit), Principal
Commissioners/ Commissioners LTU, Joint Secretary TRU-I/TRU-II/Review,
Commissioner, Central Excise (Legal/PAC, Tax Payers Services)
Madam/Sir
Subject: Instructions regarding provisional attachment of property
under Section 73C of the Finance Act, 1994.
I am directed to draw your attention to Section 73C of the Finance Act, 1994,
the Service Tax (Provisional Attachment of Property) Rules, 2008 and
Circular
No. 103/06/2008-Service Tax dated 1.7.2008 on the above subject.
2. Recently, in a case of an assessee whose bank accounts were ordered to be
attached without giving any opportunity to them, the Hon'ble Allahabad High
Court after a detailed analysis of the legal provisions, observed, inter- alia,
that the order directing attachment of the property without waiting for a reply
to the show cause notice, and without giving any opportunity and without giving
any notice, was in gross violation of Rule 3 of the Rules of 2008 read with
paragraph 2 (iii) of the Circular dated 1st July, 2008. It was mandatory for the
authority to issue a notice giving 15 days time to reply before attaching a
property. The Hon'ble High Court further observed that since proceedings under
Section 73 of the Act had been initiated and a show cause notice had already
been issued to the petitioner, action for attachment could only have been
initiated by the Commissioner and should not have been initiated by the Deputy
Commissioner. The Court also directed that a certified copy of the order be sent
to the Central Board of Excise & Customs, Department of Revenue, Ministry of
Finance with specific instructions to issue a circular to all officers ensuring
that the powers under Rule 3 should be exercised with utmost care and caution
and should not be exercised frivolously.
3. It may be noted that, on this issue, there are adequate safeguards in the
law and same have been highlighted in the Circular dated 1.7.2008. The present
situation has resulted only on account of non-compliance with respect to both.
Chief Commissioners are requested to issue standing orders with respect to the
observations of the Hon'ble Allahabad High Court and to also emphasize that
non-compliance with legal provisions or administrative instructions will leave
officers with no defence in legal proceedings arising out of such
non-compliance.
Yours faithfully
Sreeparvathy S.L.
OSD (Service Tax)
F.No. 137/15/2015-Service Tax
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