This reference application, instituted under section 34-A of the Federal Excise Act, 2005 (ACT, 2005), is directed against order dated 19.02.2015 of learned Appellate Tribunal Inland Revenue ("Appellate Tribunal"), in STA No. 933/LB/2014, whereby Appellate Tribunal allowed appeal of the registered person:
2. Following question of law - epicenter of controversy - is proposed and pressed for determination, which is reproduced as under:- (VII). Whether, on the facts and in circumstances of the case, the learned ATIR, was justified to hold that SED has been levied without issuance of show-cause notice under the relevant provisions of the Federal Excise Act, 2005 which is a separate levy and require separate proceedings, whereas show-cause notice for levy of SED was issued vide C. No. 314 dated 03.10.2013 under section 3A of the Federal Excise Act, 2005 confronting the amount of SED."
3. When confronted that whether Notice was issued under section 14 of the Act, 2005 for recovery of alleged special excise duty (SED), learned counsel conceded that single notice dated 03.10.2013 was issued but it also contained allegation of non-payment of (SED). Learned counsel referred to the contents of the order to read reference to allegations in the context of Act, 2005.
Upon perusal of selected portions of the text of the show-cause notice, as reproduced in the orders available on record, it appears that except quantifying the amount of loss, with respect to non- payment of Sales tax and SED, and only referring to 3A of Act, 2005, nothing was mentioned to indicate alleged violations, breaches and consequences thereof - under the Act, 2005. The notice under reference cannot be construed to be a notice in terms of section 14 of the Act, 2005. The substance of allegations in notice, predominantly embodied the violations of Sales Tax Act, 1990.
And allegations regarding breaches of Act, 2005 are conspicuously missing. It is expedient to reproduce findings recorded by the Appellate Tribunal, which read as; "17. The most important issue of maintainability of appeal under the Federal Excise Act, 2005 is that there is no controversy existed on record that a consolidated appellate order is passed in consequent to a single adjudication order impugned on the basis of a single consolidated show- cause notice for recovery of sales tax as well as special excise duty. Special Excise Duty (SED) under section 3A can only, be imposed by initiating proceedings under enabling provisions of Federal Excise Act, 2005. Since, no separate order for special excise duty is existed on record and the order- in-original bear a single number on its face for both the levies jointly and not distinctly, therefore, we feel that no absurdity is caused in filing of a single appeal by the appellant on the same cause against the same order before the learned CIR (Appeals) by the appellant. In view of all this, reliance on the judgment of Hon'ble Supreme Court of Pakistan as referred in impugned order appealed against is distinguishable and not relevant to this particular situation, hence; dismissal of appeal on this very ground is not fair and justified.
18. With regard of levy of SED, it has been observed by us that the same has been levied without issuance of show-cause notice under the relevant provisions of the Federal Excise Act. In fact the Revenue Authorities during Sales Tax proceedings in the same SCN demanded SED, which in no way can be termed as justified. The SED levyable under section 3A of the Federal Excise Act is a separate levy under a separate Act and require separate proceedings. In our considered opinion, since SED has been imposed without taking cognizance of the same, therefore, is not warranted under the law and liable to be set aside on this score."
4. In view of the aforesaid, we do not find any illegality, committed by the Appellate Tribunal.
5. Question of law is answered in the affirmative, Tribunal had justifiably decided the matter, in wake of the facts of the case-when substance of allegations in the context of Act 2005 were absent. This Reference Application is decided against the department.
6. Office shall send a copy of this order, under seal of the Court, to learned Appellate Tribunal, in terms of section 34A(5) of the Federal Excise Tax Act, 2015.