Law: Federal Excise Act, 2005

Section: 2(122),3(1)(d),2(23),19(1),3,14(1),33(2)

Law: Federal Excise Rules, 2005

Section: 43A

Federal Excise Act, 2005) - Sections 2(122), 3(1)(d), 2(23), 19(1), 3, 14(1) & 33(2) - Federal Excise Rules, 2005, R. 43-A - Levy Off Federal Excise Duty - Franchise services - Contract payment @ 15% to Licensor for allowing to use technical knowledge and knowhow along with letter patent & trademarks etc: - DCIR considered payment as per contract titled "knowhow and patent license and trade agreement" liable to Federal Excise Duty - Creation of demand of FED and imposition of penalty - Validity - Appellant is branch of Company incorporated in Panama - Engaged in execution of contracts with oil exploration and production Companies - Executed contract with Company in Pakistan for use of technical knowledge and knowhow along with letter patent and trademarks etc! Paying certain amount @ 15% of its revenue to contracting company - DCIR opined that there was special procedure laid down for payment of Federal Excise Duty on such ,services as per rule 43A of Federal Excise Rules, 2005, therefore, he passed order from January, 2007 to June 2011, thereby creating demand of excise duty and penalty - Appellant #led appeals on grounds that order is bad in law, Show Cause Notice is required to be issued within three years of relevant date, that DCIR erred in interpreting provisions of section 14(1) by incorrectly considering revised limitation period of five years introduced vide Finance Act, 2011 which was much after relevant tax periods and transactions were thus past and closed, that DCIR erred in charging FED in periods which were already time-barred even under period of limitation prescribed under revised provisions of section 14(1), that DCIR erred in treating payments under agreement between STBV and Appellant Company as consideration for franchise services by misinterpreting meaning of term "Franchise;" that DCIR erred in charging Federal Excise Duty by applying rate of 1% for FED periods from January to June, 2008 instead of 5% - Appeal dismissed by Appellate Authority - Scope - Whether Section 14(1) of F. E. A, 2005 was amended and limitation period of "three years" was changed and extended to "five years" by Finance Act, 2011 - Held yes - Whether…

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