Central Excise Officers have All India jurisdiction, Delhi High Court

The Delhi High Court recently held that Central Excise Officers of the Directorate General of Central Excise Intelligence (DGCEI) have “all India jurisdiction”. The officers can, therefore, issue notices and inquire into the matters relating to service tax against any assessee/person even if the said assessee or person is registered with one or multiple Commissionerates..The judgment was pronounced by a Division Bench of Justices Sanjiv Khanna and Prathiba M Singh in a petition by National Building Construction Corporation Ltd (Petitioner). The Petitioner had challenged the decision of the Director General of Central Excise to authorize the Additional Director General, DGCEI, Lucknow Zonal Unit, to investigate service tax evasion cases of all the branches of the Petitioner..The Petitioner was issued notices by various Commissionerates of Service Tax at Delhi, Allahabad, Patna, Noida, etc. Consequently, the Additional Director General, Lucknow was authorized to investigate the case of service tax evasion by all branches of the Petitioner..Meanwhile, summons/notices under Section 14 of the Central Excise Act (CE Act) were also issued to the Petitioner by the Office of Assistant Director, DGCEI, Meerut, asking for details and documents on all India basis..The Petitioner had moved the High Court challenging the authorization as well as the notice under Section 14..Putting the Petitioner’s objections to rest, the Court observed that there was no concept of territorial jurisdiction laid down in the CE Act and it was possible that more than one officer may have concurrent jurisdiction to adjudicate a case..The Court held that an assessee had no vested right to be assessed by a particular functionary and the Central Board of Excise and Customs was empowered to assign cases to any one of the competent authorities..The Court rejected the challenge to the Section 14 notice as well. It was the Petitioner’s case that Section 14 summons could be issued by an officer making an enquiry, and therefore cannot be issued where no enquiry is pending. The Court held that notice under Section 14 of the CE Act can be issued even if proceedings/enquiry under Section 73 of the Finance Act, 1994 are not pending..“Pendency of proceeding of recovery under Section 73(1) of the Fin Act or any other statutory proceedings is not a condition precedent for issue of notice under Section 14 of the CE Act. Notice or summons under Section 14 of the CE Act can be issued by the Central Excise Officer when required and necessary for any enquiry relating to service tax.”.It nonetheless added a word of caution by stating,.“We should not be understood as accepting or stating that notice or summons under Section 14 of the CE Act can be issued without any cause, reason or justification. Any power given cannot be abused and exercised in an arbitrary manner or for ulterior motives.”.The Court also expressed its “reservation” on the language used in some of the notices/summons requiring the presence of the Managing Director and senior officer of the Petitioner. The said notice/summons were worded with threats or warning that they would be punished or prosecuted. The Court advised the CE “to refrain and not use and give threats”..“The letters/notices must be appropriately worded. In a given case they may refer to the penal or prosecution provisions to ensure compliance but they should not intimidate and be minatory.”, it said..Thus, the Court proceeded to dismiss the writ petition..It, however, clarified that the proceedings before the Central Excise Officer would not include the subject matter of show cause notice issued by the Patna Commissionerate as the show cause issued by Patna Commissionerate dealt with recovery of Service Tax, Education Cess and Secondary and Higher Education Cess, while others pertained to a uniform issue of Project Management Consultancy Charges..The Petitioner was represented by Advocates JK Mittal and Rajeev Singh..The Respondents were represented by Senior Advocate K Radha Krishnan along with advocates Rupesh Kumar, Satish Agarwala and Pritpal Singh Nijjar. .Read the Judgement below.