GRAFT CHANGED THE DRAFT ?????

CBEC, after the FY 2015-16 ended, sincerely conveyed a big “THANK YOU” to all the tax payers.

24^th April is the deadline to serve Show Cause Notices to whoever has been found to be in default  or have evaded Service Tax. The officers of the entire Service Tax Zone are busy with finalizing the SCNs so that the revenue is protected and not time barred.

The essence of the Gita can be summed up as “Do your duty and do not expect for fruits.”  It is the system who makes the officers indispensable and thereafter a nexus gets developed between individuals, for mutual self enrichment, but at the cost of compromising revenue.

In our previous column, CESA Mumbai mentioned about the loss of revenue amounting to Rs. 460 Crores of  Kingfisher Airlines. And now, we are going to unmask another case, which is equally shocking...

Nowadays, even a child is not safe in his own home… a horse is not safe in its own stable… and revenue is not safe in the hands of a few officers in the Department, who are at the fag end of their career...

In Mumbai, when there were two Commissionerates of Service Tax, one Commissioner was very receptive while the other was very vindictive. He was very autocratic, arbitrary and not open to any sensible suggestions.

Mr R Sekar joined in Service Tax-II Commissionerate in June, 2012 and continued to be in charge till September, 2015. During his tenure in Service Tax, Mumbai, he chaired several MCMs and each such MCM, he used to keep the subordinate officers attending the MCM under tremendous mental pressure due to his habit of humiliating them. Several officers were victimized due to such pressure tactics, resulting in them suffering Heart attacks, increase in BP, Diabetes and other health issues.

The special audit group conducted an audit of M/s. Reliance Communications Infrastructure Limited (RCIL) for the period 2009-10 to 2013-14 and the same was placed before MCM for discussion and finalization.  Reliance Big TV provides Broadcasting Services in India. RCIL does the installation and commissioning of DTH equipment at the premises of subscribers of Reliance Big TV. RCIL availed Cenvat credit on Capital Goods viz. equipment (STB, LNB, Dish, etc.) required  for providing such services by Reliance Big TV. As per the Special Audit group, the Cenvat credit of Rs. 107 Crores availed by RCIL on such “Capital Goods” was inadmissible. In the MCM dated 18.10.2013, the learned Commissioner observed that:

“Regarding availment of CENVAT credit on Set Top Boxes under the category of Capital Goods”, the goods are classifiable under CH. 85 and falls within the scope of Capital Goods. Since the goods are used for providing taxable service to M/s. Reliance Big TV (RBTV) and the goods are classifiable under capital goods, there is no bar to avail cenvat credit on Set Top Boxes under the category of capital goods. In view of these facts it was decided that the objection raised is not sustainable and the para is dropped”.  

Subsequently, Audit Party did not proceed further in the matter and the Final Audit Report (FAR) 40/2013 was issued to RCIL.

A  whistle blower approached the DGCEI, Mumbai on the same issue and they carried out their own investigation for the same period and issued SCN bearing F. No. DGCEI/MZU/I & IS ‘C’/12(4)/151/2013 in October, 2014, amounting to approximately Rs. 107 Crores, effectively reversing the MCM findings. The said SCN was made answerable to the Commissioner, Service Tax-VII, Mumbai.  The same was taken up for adjudication and was decided vide Order-in-Original No. 23/ST-VII/RK/2015-16 dated 22-Feb-2016.

During the Personal Hearing RCIL gave reference of the MCM minutes and produced a copy of the FAR 40/2013 and the decisions of the MCM chaired by the then Commissioner Mr R Sekar. On the basis of the said report the adjudicating authority was constrained to drop the demand of Rs 100,05,10,375/- relating to the extended period from 2009-10 to 2012-13 (upto Sept-2013) and confirmed only Rs. 7,20,67,400/- for the normal period.  In a nutshell, due to the decisions of the MCM chaired by Mr R Sekar, there is a revenue loss of Rs. 100 Crores. Had Mr R Sekar let the Audit group to proceed and/or referred the matter to the Anti Evasion, the Department would have not lost Rs. 100 Crores.

Now, as regards to the issue of wrong availment of CENVAT credit on Capital goods, the stand taken by Mr R Sekar was motivated with malafide interest as the DGCEI, Mumbai has rightly reversed the stand of the MCM and issued the SCN and subsequently the adjudicating authority upheld the merit of the same.

Who will be held accountable for the loss of Rs.100 Crores of revenue ???????

Presently major parts of our country are facing the worst draught situation over the years. Had the Rs.100 Crores of revenue been protected, at least 20,000 bore wells could have been dug or any other project for the welfare of the people of India…………

This is only a tip of the iceberg, many more skeletons are in there in his cupboard...

Is it possible that this was a "THANK YOU" extended by Mr Sekar towards the company which provided him with their guesthouse during his initial stay in Mumbai from June to …... ? You be the judge…

Had there been any small lapse on the part of a junior officer, the administration under Mr R Sekar would have pounced on the officer without even giving him an opportunity of natural justice.

CESA Mumbai demands the most stringent & exemplary action to be taken against Mr Sekar, as well as to unearth the nexus between the corporate giants and the corrupt officials.

 

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