No. 103/ 06 /2008-ST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Delhi, dated the 1st
Commissioners of Central Excise & Customs (All)
Commissioners of Central Excise (All)
General of Service Tax
General of Central Excise Intelligence
of Service Tax (All)
Subject: - Instructions regarding provisional attachment of property under section 73 C of the Finance Act, 1994-reg.
Section 73C of the Finance Act, 1994 (hereinafter referred to as the
Act) provides for provisional attachment of property for
the purposes of protecting the interests of revenue during the pendency
of any proceedings under section 73
or section 73A of the Act.
In this connection the following guidelines are
issued to maintain uniformity in its implementation by field
(i) The proceedings for provisional attachment can be initiated only after
issue of Show Cause Notice under section 73 or section 73A of the Act.
pendency of the proceedings under section 73 or 73A of the Act,
if the Central Excise Officer is of the opinion that, in order to protect the
interests of revenue, it is necessary to attach the property of the noticee,
he shall prepare a proposal in the format prescribed under the sub-rule(1) of
rule 3 of the Service Tax (Provisional Attachment of Property) Rules, 2008, issued vide notification No.
30/2008-ST, dated the 1st July, 2008, and
forward the same to the
jurisdictional Commissioner of Central Excise for his approval, except in
cases where the proceedings under section 73 or section 73A of the Act are
pending before such Commissioner of Central Excise, in which case he shall
himself make the order of attachment, in accordance with the procedure set out
in para (iv) below.
important to note that there should be sufficient justification to hold a view
that the provisional attachment of property is necessary to protect the
interests of revenue. The remedy of attachment
being, by its very nature, extraordinary, has to be resorted to in the utmost
circumspection and with maximum care and caution. The grounds on which the Central Excise Officer entertains the
reasonable belief that the notice would dispose of, or remove, the property
and the sources of his information, if any, should be clearly stated while
seeking the approval of the Commissioner of Central Excise. Normally,
the proposal should be forwarded within one month’s period of the issue of
show cause notice. It
may also be noted that appropriate disciplinary action shall be initiated
against the officers who may be found to exercise the powers of provisional
attachment of property frivolously and without sound reasons. [Recommendation
of the Standing Committee on Finance (Fourteenth Lok Sabha) in its 27th
The Commissioner of Central Excise, on receipt of proposal, or on his
own, if he is satisfied that circumstances of the case justify provisional
attachment, may serve a notice on the person on whom a notice is served under
Section 73 or 73A of the Act, requiring such person to make submissions, in
writing or in person or both, within fifteen days of serving of the notice as
to why the property belonging to such person, and as may be specified in the
notice, be not provisionally attached. The said notice should also specify the
condition that the noticee should not sell, transfer, mortgage, charge, lease
or otherwise alienate or encumber the property specified in the notice, till
the decision of the said notice. In case of proposal for provisional
attachment of immovable property, the notice should also be sent to the
concerned registration authorities with a direction not to allow any sale,
transfer, mortgage etc., of the property.
After due consideration of the materials before him, and after hearing
the person, if such person so desires, the Commissioner of Central Excise may
grant approval to the provisional attachment of the property and the Central
Excise Officer before whom the proceedings under Section 73 or 73A of the Act
are pending, may, by order in writing, attach the said property. The
Commissioner shall grant such approval, or, where proceedings under section 73
or 73 A of the Act are pending before him, order the attachment of the
property, within fifteen days of holding of personal hearing. A copy of the
order of provisional attachment should be served by the Central Excise Officer
in the same manner as prescribed under section 37 C of the Central Excise Act,
1944, as made applicable to service tax vide section 83 of the Act.
The following types of offences committed by a service provider on an
exporter may be considered for provisional attachment of property:-
Provision of a taxable
service without the cover of an invoice or any other document, as prescribed,
and without payment of tax;
Provision of a taxable
service without declaring the correct value for payment of service tax, where
a portion of value of taxable service, in excess of invoice price, is received
by him or on his behalf but not accounted for in the books of account.
Taking of CENVAT
credit without the receipt of goods or services specified in the document
based on which the said credit has been taken;
Taking of CENVAT
credit on invoices or other documents which a person has reasons to believe as
Issue of service tax
invoice or any other document, without providing or to be providing a taxable
service, as specified in the said invoice or other document;
Claiming of refund or
rebate in a fraudulent manner such as on invoice or other documents which a
person has reason to believe as not genuine.
The provisional attachment of property shall be resorted only in a case
where the service tax or CENVAT credit alleged to be involved is more than Rs.
25 lakh (twenty five lakh).
(viii) Period of Attachment :
The order of provisional
attachment of property shall be operational only for a period of six months
from the date on which the order is served on the noticee. However, the Chief
Commissioner of Central Excise may, for reasons to be recorded in writing,
extend the aforesaid period by such further period or periods as he thinks
fit, but the total period of extension shall not, in any case, exceed two
The order of provisional
attachment shall cease to have effect if the noticee pays the entire duty
amount along with interest.
(ix) Types of property which can be
Personal property of a sole proprietor or partners shall not be
attached. Personal property means
any movable or immovable property which is in personal use of the sole
proprietor or partner. However, immovable property/ properties
which is/ are used for commercial
purpose may be provisionally attached.
Movable property should be
attached only if the immovable property available for attachment is not
sufficient to protect the intersts of revenue.
should also be ensured that such attachment does not hamper normal business of
the assessees. This would mean that inputs required for provision of a service
should not be attached by the department.
Attachment not to be excessive: Provisional
attachment by arrest or distrain of the property shall not be excessive, that
is to say, the property provisionally attached shall be of value as nearly as
may be equivalent to that of the amount demanded in the proceedings under
section 73 or section 73A of the Act.
Attachment between Sunrise and Sunset: The
provisional attachment of the property of the concerned person by arrest or
distrain shall be made after sunrise and before sunset and not otherwise.
provisional attachment of the property, the Central Excise Officer shall
prepare an inventory of the property attached and specify in it the place
where it is lodged or kept and shall hand over a copy of the same to defaulter
or the person from whose charge the property is distrained.
Private alienation to be void in
where a notice has been served on a person for provisional attachment,
the person on whom such notice has been served or his representative in
interest shall not be competent to mortgage, charge, lease or otherwise deal
with any property belonging to him except with the written permission of the
Commissioner of Central Excise.
Where a provisional attachment has been made, any private transfer or
delivery of the property attached or of any debt, dividend or other moneys
contrary to such provisional attachment, shall be void as against all claims
enforceable under the provisional attachment.
Share in property : Where
the property to be provisionally attached consists of the share or
interest of the concerned person in property belonging to him and another as
co-owners, the provisional attachment shall be made by a notice to the
concerned person prohibiting him from transferring the share or interest or
charging it in any way.
Property exempt from
All such property as is by the Code of Civil Procedure, 1908 (5 of 1908),
exempted from attachment and sale for execution of a decree of a Civil Court
shall be exempt from provisional attachment.
The decision of the Commissioner of Central Excise as to what property is so
entitled to exemption shall be final.
Trade & field formations may be informed suitably.
version will follow.
Secretary to Government of India
PPS to Chairman (CBEC)
PPS to Member (CBEC) (All)
Directorates-General/ Directorates under CBEC (All)