Law: Federal Excise Act, 2005

Section: 3,8,14

Law: Federal Excise Rules, 2005

Section: 40A,43C

(A) Federal Excise Act, 2005 - Sections 3, 8 & 14 - Federal Excise Rules, 2005, Rule 40A & 43C - SRO 550(I)/2006, dated 5-6-2006 - Default in payment of federal excise duty on various receipts including late payment charges for arranging financial facilities to clients on overdue amounts by Respondent/Taxpayer who derived income in business as stock broker - Show Cause Notice and passing of order-in-original by DCIT for recovery of federal excise duty along with default surcharge and penalty - In appeal, CIR(A) held that vide SRO 550(I)/2006, dated 5-6-2006, stock brokers are required to pay federal excise duty on their brokerage services only in respect of purchase or sale of shares in stock exchange and late charges earned for arrangement of financing facilities are distinctly different from brokerage and commission in respect of purchase or sale of shares in stock exchange, therefore, other income i.e. late charges will 110 attract federal excise duty in Sales Tax mode under Notification 550(I)/2006, dated 5-6-2006 read with rule 43C of Federal Excise Rules, 2005 - CIR(A) further held that if for argument stake it is assumed that mark-up on financial services are covered even then same will not attract federal excise duty in sales tax mode as same are exempt under Federal Excise Rules, 2005 meaning thereby that services rendered by them do not fall under Rule 43C of Federal Excise Rule, 2005 - Justification for CIR(A) to exclude services of arrangement of financing facilities from value of service provided to clients by Respondent in light of Federal Excise Act, 2005 - Validity - Whether hearing and factual grant of opportunities and adjournment fully justified officer to step in additional time limits, which is beyond 120 days and also construed valid reason; hence it is held that Order-in-Original is within days of statutory time limit and plea of taxpayer is rejected on this score - Held yes - Whether where departmental practice had followed particular course in implementation of some rule whether right or wrong, it would be extremely unfair to make departure from it and thereby disturb rights that have been settled by long and consistent course…