Manoj Jain vs Union Of India And Others

[1] Communication dated 19/02/2007 is the cause for filing present petition. The communication is by the Superintendent, Central Excise to the petitioner, a proprietor of M/s Kalp Advertisers:-

"कार्यालय अधीक्षक, केन्द्रीय उत्पाद शुल्क

रेन्ज-1, 19/1265, तृतीय तल

सिटी सेन्टर, टच टेल के सामने

ग्वालियर (म.प्र.) 474001

प.क्रं. S.T./R-1/Gwl/Adv/70/480

To,

M/s Kalp Advertisers

D-3, Basant Vihar,

Gwalior (M.P.)

Sir,

दिनांक 19-02-07

Subject:- Non payment of service tax and non submission of S.T.3 return reg.

---x---x---

Kindly refer to TR-6 challans dated 12/01/07 for the period of May 06 to Sept. 06 and Oct. 06 to Dec. 06 on the above cited subject.

During perusal of above TR6 challans, it is observed that you have paid service tax for the period of May 06 to Dec. 06 only and have not paid for the period of Oct. 05 to April 06, therefore, you are requested to pay service tax along with interest for the period of Oct. 05 to April 06 within two days.

Further, it is observed that you have filled S.T. 3 return upto Sept. 05, therefore, you are again requested to file ST-3 return for the period of Oct. 05 to March 06 & April 06 to Sept. 06.

In addition to above, it is noticed that you had applied for new service tax registration on 06.10.06. Although you are already registered with the department for the service sought for new registration having No. Gwl/S.T./ Adv./ 70/97-98 dated 07.01.98, which is still alive and valid for payment of service tax, therefore, you are advised to mention service tax registration No. GWL/ S.T./Adv./70/97-98 in all correspondence like TR-6 challan, S.T.3 return etc. and accordingly new service tax registration No. S.T./R-1/Gwl/Adv./03/2006-07 has to be treated as cancelled.

In view of these facts as narrated above you are advised to use only the registration No. GWL/S.T./Adv./70/97-98 in all your correspondence with the department as the same is still in force and cannot be cancelled under the prevailing circumstances.

This letter may please be treated as most urgent.

Yours sincerely,

अधीक्षक

SUPERINTENDENT

केन्द्रीय उत्पाद शुल्कध्ब्मदजतंस म्गबपेम

रेन्ज-1 ग्वालियर /Range-I Gwalior"

[2] The facts on record reveals that with the advent of Finance Act, 1994, Service Tax was introduced and with the inclusion of services provided to a client by an advertising agency (as defined under Section 65(3)) in relation to advertisement in any manner as taxable service (Section 65 (105)(e)), the petitioner obtained registration under the Service Tax Act in his individual capacity in the year 1997; and was issued registration certificate No. GWL/ SER-TAX/ADV/70/97-98 dated 07/01/1998. Later on, invoking the provisions under Rule 4 of the Service Tax Rules, 1994, which provides for:-

"4. Registration - (1) Every person liable for paying the service tax shall make an application to the concerned Superintendent of Central Excise in Form ST-1 for registration within a period of thirty days from the date on which the service tax under section 66B of the Finance Act, 1994 (32 of 1994) is levied:

Provided that where a person commences the business of providing a taxable service after such service has been levied, he shall make an application for registration within a period of thirty days from the date of such commencement:

Provided further that a person liable for paying the service tax in the case of taxable services referred to in sub-section (4) or sub-section (5) of section 66 of the Finance Act, 1994 (32 of 1994) may make an application for registration on or before the 31st day of December, 1998:

Provided also that a person liable for paying the service tax in the case of taxable services referred to in sub-clause (zzp) of clause (105) of section 65 of the Act may make an application for registration on or before the 31st day of March, 2005.

(1A) For the purposes of sub-rule (1), the Central Board of Excise and Customs may, by an order specify the documents which are to be submitted by the assessee along with the application within such period, as may be specified in the said order.

(2) Where a person, liable for paying service tax on a taxable service,

(i) provides such service from more than one premises or offices; or

(ii) receives such service in more than one premises or offices; or,

(iii) is having more than one premises or offices, which are engaged in relation to such service in any other manner, making such person liable for paying service tax,

and has centralised billing system or centralised accounting system in respect of such service, and such centralised billing or centralised accounting systems are located in one or more premises, he may, at his option, register such premises or offices from where centralised billing or centralised accounting systems are located.

(3) The registration under sub-rule (2), shall be granted by the Commissioner of Central Excise in whose jurisdiction the premises or offices, from where centralised billing or accounting is done, are located:

Provided that nothing contained in this sub-rule shall have any effect on the registration granted to the premises or offices having such centralised billing or centralised accounting systems, prior to the 2-11-2006.

(3A) Where an assessee is providing a taxable service from more than one premises or offices, and does not have any centralized billing systems or centralized accounting systems, as the case may be, he shall make separate applications for registration in respect of each of such premises or offices to the jurisdictional Superintendent of Central Excise.

(4) Where an assessee is providing more than one taxable service, he may make a single application, mentioning therein all the taxable services provided by him, to the concerned Superintendent of Central Excise.

(5) The Superintendent of Central Excise shall after due verification of the application form, or an intimation under sub-rule (5A), as the case may be, grant a certificate of registration in Form ST-2 within seven days from the date of receipt of the application or the intimation. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted.

(5A) Where there is a change in any information or details furnished by an assessee in Form ST-1 at the time of obtaining registration or he intends to furnish any additional information or detail, such change or information or details shall be intimated, in writing, by the assessee, to the jurisdictional Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, within a period of thirty days of such change.

(6) Where a registered assessee transfers his business to another person, the transferee shall obtain a fresh certificate of registration.

(7) Every registered assessee, who ceases to provide the taxable service for which he is registered, shall surrender his registration certificate immediately to the Superintendent of Central Excise.

(8) On receipt of the certificate under sub-rule (7), the Superintendent of Central Excise shall ensure that the assessee has paid all monies due to the Central Government under the provisions of the Act, and the rules and the notifications issued there under, and thereupon cancel the registration certificate."

[3] Without having any order in his favour of cessation of the registration certificate, petitioner applied for fresh registration under Rule 4 of Service Tax Rules, 1994, whereon the petitioner was given the registration certificate No. ST/R-1/GWL/ADV/03/06-07.

[4] It was in the context of these facts that impugned communication was entered into.

[5] Though it is contended that the petitioner by mistake got himself registered under the Service Tax Act in the year 1997 which he realized only when by Finance Act, 2006 the term "Commercial Concern" is substituted by the term "any person", and being an individual he was not within the purview of 'advertising agency'. These contentions, however, have no legs to stand.

[6] Neither the provisions under the Service Tax Act, nor under the Rules, the expression "Commercial Concern" is defined. It is nowhere in the Act that Commercial Concern can only be a Partnership Firm, Company, or a Sole Trader. A Commercial Concern as understood in common parlance would mean a public limited company or a co-operative society or a firm or any other person or body of persons engaged in trade or commerce. (Please see: The Major Law Lexicon at Page 1265).

[7] In the case at hand, evident it is that the petitioner was engaged in the business of advertising thus cannot claim that he is not a commercial concern and had rightly obtained the registration certificate under Service Tax Act in the year 1997.

[8] Furthermore, "advertising agency" as defined under Section 65(3) of the Act means "any person engaged in providing any service connected with the making, preparation, display or exhibition of advertisement and includes an advertising consultant".

[9] That by substituting the expression "person" in place of "Commercial Concern", in our considered opinion, will not lead to a conclusion that the "person" was a different from "Commercial Concern".

[10] Thus, the assumption drawn by the petitioner that with the substitution of "Commercial Concern" with the word "person" in 2006, the petitioner was not amenable to service tax cannot be countenanced.

[11] Furthermore, as regard to contention that by moving an application for cessation of registration, the registration automatically ceases, it is seen that sub-rule (7) of Rule 4 of 1994 Rules provides for that "(7) Every registered assessee, who ceases to provide the taxable service for which he is registered, shall surrender his registration certificate immediately to the Superintendent of Central Excise". Respondents have referred to paragraph 5.7(ii) of Chapter II of CBEC Central Excise Manual, which provides for:-

"5.7(ii) Registration already issued can be revoked/ suspended on finding any in consistency major discrepancy by the verifying officer i.e. Range Superintendent after providing reasonable opportunity to the registrant to explain the case."

[12] That as per paragraph 6(7) of Chapter II of said manual "A registration certificate granted under this rule may be revoked or suspended by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, if the holder of such certificate or any person in his employment, is found to have committed breach of any of the provisions of the Act or the rules made there under or has been convicted of an offence under Seciton 161, read with Section 109 or with Section 116 of the Indian Penal Code (45 of 1860)".

[13] Thus the contention that the petitioner was not required to pay the service tax prior to Finance Act, 2006 is not correct.

[14] Furthermore, Section 14 of the Central Excise Act, 1944 envisages:-

"14. Power to summon persons to give evidence and produce documents in inquiries under this Act.-

(1) Any Central Excise Officer duly empowered by the Central Government in this behalf shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purposes of this Act. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.

(2) All persons so summoned shall be bound to attend, either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required:

Provided that the exemptions under sections 132 and 133 of the Code of Civil Procedure (5 of 1908) shall be applicable to requisitions for attendance under this section.

(3) Every such inquiry as aforesaid shall be deemed to be a "judicial proceeding" within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860)."

[15] The communication which is under challenge emanates from the procedure stipulated under Section 14 of the Central Excise Act, 1944. The Range Superintendent, being the registration issuing authority, is well within its competence to summon the petitioner to ascertain that there is no misuse of the provision of the Act, in other words, to ascertain that in the presence of earlier registration certificate, the petitioner does not use new registration certificate.

[16] In view whereof, the impugned communication cannot be faulted with, as would warrant an indulgence.

[17] Consequently, petition fails and is dismissed. No costs.