FEBRUARY 05, 2016

By P Anbuchelvan

IT is better to resolve all existing disputes in Central Excise and Service Tax by introducing suitable schemes in this Budget, so, that all existing assessees and entrepreneurs may study the new taxation law leaving behind the past memories.

2. As a first step, CENVAT Credit on all the inputs and input services where the duty/Service Tax has been paid and the invoice is in the name of the company, must be allowed. It is not necessary to go into the invoice and look into whether the same has been utilized only for manufacturing activity. None of the manufacturer/service provider is going to buy/receive services which are not relevant to his business activity except few unscrupulous ones. Judicial decisions allow input service credit on almost all the services received by the manufacturer/service provider. Therefore, there may not be much harm to revenue collection by providing CENVAT credit to all the inputs/input services received with the invoice in the name of company. If required, a very stringent penal provision may be included in case it has been proved that the invoice only has been received without actual receipt of input/input services.

3. Withdraw all adjudication/departmental appeals pending on CENVAT Credit except the offence cases where it is pending on the issue of credit availed on documents but not received by the said manufacturer. Similarly, in all assessees' appeals, the Department should graciously concede that credit is admissible. It will reduce considerable litigation pending before various forums.

4. Similarly, appoint a committee at each Commissionerate comprising of officers of Group A to review all the pending appeals on technical issues of Central Excise/Service Tax and these committee should look into the pending issues with the available precedent, wherever it feels that it is a weak case to pursue, the same should be withdrawn/ conceded. For the issues wherever the Committee feels that there is a fair chance to succeed, in these cases discuss with the party to litigation on the issues and try to convince the party to pay the duty with interest to close the litigation. Such "convincing" should never become "coercive". Still if the party is not ready to withdraw the cases and the committee feels it as a strong case then the litigation may be allowed to continue. Here, a free hand has to be given to the Committee to resolve the issues to collect the duty with interest and to withdraw the cases filed by the department, the only accountability is where it has been recommended to continue the litigation of departmental appeals. Selection of officers for this committee should be made very carefully.

5. The aforesaid dispute resolution may reduce the pending litigation to a large extent and we will be left with very few cases, which could be decided within a short span of time.

(The author is Superintendent, Central Excise &views expressed in this article are strictly personal.)