Escolar Documentos
Profissional Documentos
Cultura Documentos
under
Service Tax
Udayan Choksi
9th July 2011
Why summons and investigation/search and
seizure?
(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 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.
summoned
(2) All persons so summoned shall be bound to attend,
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 1908 (5 of 1908) shall be applicable to requisitions for attendance under
Procedure,
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, 1860 (45 of
1860).
Key provisions – Section 37C of Central Excise Act
(1) Any decision or order passed or any summons or notices issued under this
Act or the rules made there under, shall be served,
served -
(a) by tendering the decision, order, summons or notice, or sending it by
registered post with acknowledgment due, to the person for whom it is intended
or his authorised agent, if any;
(b) if the decision, order; summons or notice cannot be served in the manner
provided in clause (a), by affixing a copy thereof to some conspicuous part of the
factory or warehouse or other place of business or usual place of residence of
the person for whom such decision, order, summons or notice, as the case may
be, is intended;
(c) if the decision, order, summons or notice cannot be served in the manner
provided in clauses (a) and (b ), by affixing a copy thereof on the notice board of
the officer or authority who or which passed such decision or order or issued
such summons or notice.
(2) Every decision or order passed or any summons or notice issued under this
Act or the rules made there under, shall be deemed to have been served on the
date on which the decision, order, summons or notice is tendered or delivered by
post or a copy thereof is affixed in the manner provided in sub-section (1)
Key provisions – Section 82 of Finance Act, 1994
82. Power to search premises – (1) If the Joint Commissioner of Central Excise
has reason to believe that any documents or book or things which in his opinion
will be any useful for or relevant to proceedings under this Chapter are secreted
in any place, he may authorize any Superintendent of Central Excise or, as the
case may be, Deputy Commissioner of Central Excise to search for and seize or
may himself search for and seize, such documents or books or things.
things.
(2) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating
to searches, shall, so far as may be, apply or searches under this section as they
apply to searches under that Code.
Key provisions – Rule 5A of Service Tax Rules, 1994
Summons
Investigative agencies
Who has the powers to issue summons
Mode of service
Tendering or sending it by registered
post with acknowledgment due
By affixing a copy thereof to some
conspicuous part of the factory or
warehouse or other place of business
or usual place of residence of the
person
By affixing a copy thereof on the notice
board of the officer or authority who or
which passed such decision or order or
issued such summons or notice
Latter modes to be resorted to only if the
earlier modes are not possible
Service may be made on the person
himself or any authorised agent
Document is deemed to have been
served on the date on which it is
tendered or delivered by post or a copy
thereof is affixed
Obligations of person summoned
The belief of the assessing authority is mandatory. “Reason to believe” is stronger than “is
satisfied”. The belief entertained by the assessing officer must not be arbitrary or irrational and it
must be reasonable
[S. Ganga Saran & Sons (P) Ltd. v. ITO [(1981) 3 SCC 143]
Mere suspicion cannot take the place of reasonable belief - officers must have reason to believe
[Mitexco vs Commissioner of Customs (E.P.), Mumbai - 2003 (155) E.L.T. 69 Tri. - Mumbai)]
In the instant case, there is no acceptable proof to find that the inspecting staff of the Central Excise
Department or the Assistant Collector of Central Excise had at any time prior to the search and seizure
entertained any reasonable belief, on material scrutinised by them that the petitioner was likely to
arrive in Madras with tainted Indian currency attributable to the sale of smuggled goods or goods of
illicit origin. As the foundation for the exercise of power is conspicuously absent in the instant case
[Abdul Kader vs Inspector of Central Excise [2000 (126) E.L.T. 48 (Mad.)]
The words “reason to believe” cannot mean that the assessing officer should have finally
ascertained the fact by legal evidence, they only mean that he forms a belief on the basis of
examination he makes, and from any information that he receives
[Praful Chunilal Patel vs CIT [(1999)
[(1999) 236 ITR 832 (Guj)]
(Guj)]
Whether reasons need to be recorded in writing..
Power of search and seizure has to be conceded in the larger interest of the society and
to check evasion of tax. Exercise of power of seizure is liable to be struck down unless
“reasons to believe” were duly recorded before action of search and seizure was taken.
The search and seizure was declared illegal where nothing was produced before the
court to show as to whether reasons were recorded or not before the search was
authorised or seizure took place.
Mapsa Tapes (P) Ltd. v. Union of India [(2006)
[(2006) 201 ELT 7 (P&H)],
(P&H)]
Search and seizure operations were lawful though no reasons were recorded by the
person responsible to order the search and seizure in furtherance of his belief that any
goods liable to confiscation or any documents or things which he considers might be
useful for or relevant to any proceedings under the Customs Act were secreted in any
place. The Court observed the affidavit of the Associate Directorate of DRI and various
documents clearly suggested that there were enough reasons for the respondents to
order the search of the premises of the petitioners.
Ajit Kumar Agarwalla vs Union of India [1998 (100) E.L.T. 333 (Cal.)],
(Cal.)]
Article 20(3) of the Constitution of India states that “No person accused of
any offence shall be compelled to be a witness against himself”
M.P. Sharma & 4 others vs. Satish Chandra [AIR 1954 SC 300]
Issue as to whether a search to obtain documents for investigation of an offence,
which is a compulsory procuring of incriminatory evidence from the accused
himself, can be said to be hit by said Article 20(3) of the Constitution of India
In this context, the Hon’ble Apex Court held that it is not legitimate to assume that
the constitutional protection under Article 20(3) would be defeated by the statutory
provisions for searches, as a power of search and seizure is, in any system of
jurisprudence, an overriding power of state for the protection of social security and
that power is necessarily regulated by law.
Documents seized when to be returned?
Section 100-
100- Persons in charge of closed place to allow search
(1) Whenever any place liable to search of inspection under this Chapter is closed, any
person residing in, or being in chare of, such place, shall, on demand of the officer or
other person executing the warrant, and on production of the warrant, allow him free
ingress thereto, and afford all reasonable facilities for a search therein-
(2) If ingress into such place cannot be so obtained, the officer or other person executing
the warrant may proceed in the manner provided by sub-section (2) of section 47.
(3) Where any person in or about such place is reasonably suspected of concealing about
his person any article for which search should be made, such person may be searched
and if such person is a woman, the search shall be made by another woman with strict
regard to decency.
(4) Before making a search under this Chapter, the officer or other person about to make
it shall call upon two or more independent and respectable inhabitants of the locality in
which the place to be searched is situate or of any other locality if no such inhabitant of
the said locality is available or is willing to be a witness to the search, to attend and
witness the search and may issue an order in writing to them or any of them so to do.
Important Provisions of CrPC
Section 100-
100- Persons in charge of closed place to allow search
(5) The search shall be made in their presence, and a list of all things seized in the
course of such search and of the places in which they are respectively found shall be
prepared by such officer or other person and signed by such witness; but no person
witnessing a search under this section shall be required to attend the court as a witness
of the search unless specially summoned by it.
(6) The occupant of the place searched, or some person in his behalf, shall, in every
instance, be permitted to attend during the search, and a copy of the list prepared under
this section, signed by the said witnesses, shall be delivered to such occupant or person.
(7) When any person is searched under sub-section (3), a list of all things taken
possession of shall be prepared, and a copy thereof shall be delivered to such person.
(8) Any person who, without reasonable cause, refuses or neglects to attend and witness
a search under this section, when called upon to do so by an order in writing delivered or
tendered to him, shall be deemed to have committed an offence under section 187 of the
Indian Penal Code (45 of 1860).
At the entry point of your premises, you are well within your rights to
Ask each of the officers to identify himself by showing his identity card
Ask the leader of the team to show you the authorization letter of Joint Commissioner before
the search operation commences.
In case of the premises under search are residential premises where women reside, no
search can be carried out unless the search team includes a lady. Women’s rooms can only
be searched in the presence of the female members of the search team. Women can only be
searched by female members of the search team.
Personnel can insist that the search operation is conducted in the presence of at least two
independent witnesses (akin to a Panchnama).
Upon completion of the search, the records collected should be properly numbered and
listed, and only listed documents and records should be taken away by the officers. In case of
seizure of goods, they are not taken away except as samples. The seized goods are generally
left with the owner himself under a document with a direction not to use or dispose off
without the permission of the department
Personnel can insist that a copy of the signed witness statement be provided at the end of
the search
Access to registered premises