Law: Federal Excise Act, 2005

Section: 3,4,8,19

Law: Federal Excise Rules, 2005

Section: 40A(2)

[Federal Excise Act (VI of 2005)].....Sections 3, 4, 8 & 19---Federal Excise Rules, 2005, R.40-A (2)---Duties specified in the First Schedule to be levied---Levy of Federal Excise Duty on Miscellaneous Income Service Charges/Services & Handling Charges---Validity---Both the authorities below ignored the fact that departmental official had incorrectly extended the scope of charging provision of law without any legal support that L/C commission included all services pertaining to processing of L/C handling, renewal of L/C on account of import or export which were not liable to Federal Excise Duty---Federal Excise Duly levied on Miscellaneous Income Service Charges/Services & Handling Charges was deleted by the Appellate Tribunal being unlawful. 2007 PTD 115 (H.C.) ref. (b) Federal Excise Act (VII of 2005)--- ----S.3---Federal Excise Rules, 2005, R.40-A (2)(1)---Duties specified in the First Schedule to be levied---Exchange gain---Levy of Federal Excise Duty---Validity---Taxpayer contended that income termed as "dealing in foreign currencies" by the auditor was, in fact, an income generated during the course of trading, due to difference in the rate prevailing on the date of buying and selling (or on closing date of accounts) of foreign currency i.e. "exchange gain"; and there was no service rendered to any customer or any commission or brokerage was earned for generation of such income; and First Appellate Authority wrongly confirmed the treatment meted out by the auditor by treating the "exchange gain" on dealing in foreign currency as "commission and brokerage on foreign exchange dealings"---Validity---Assertions made by the taxpayer carried weight and auditor had wrongly treated the "exchange gain" on trading in foreign currency as "commission and brokerage on foreign exchange dealings"---Federal Excise duty levied on income from dealing in foreign currencies was deleted by the Appellate Tribunal; and as a result, levy of default surcharge was not applicable which was also deleted. ORDER Through the present appeal regarding levy of Federal Excise Duty for the period from July to September, 2006, the appellant/taxpayer has assailed the impugned…

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