Law: Federal Excise Act, 2005

Section: 3,7,14,33

FEDERAL EXCISE ACT, 2005 (VII OF 2005) Sections: 3, 7, 14, 33 - Entry No. 8 of Table II of First schedule - Federal Excise Rules, 2005, Rule, 40A - SRO 550(I)/2006 dated 05.06.2006 - Short payment of Federal Excise Duty - Scope of tax - Determination of tax liability - Offences and penalties - Show Cause Notice - Charging of income from dealing in foreign currency, correspondent rebate, rebate from State Bank of Pakistan on home remittance, re-imbursement of actual expenses (Godown rent and staff salaries, legal charges and valuation charges) - CIR(A) disapproved levy of FED on income from dealing in foreign currency and rebate from State Bank of Pakistan and remanded back case to DCIR - On the issue of re-imbursement of godown expenses - Challenge to - FACTS Brief facts of the case are that registered person is a banking company having multiple branches across the country and provides commercial banking services. During the course of scrutiny of financial statements and FED relevant to the tax period spanning the calendar year 2011 it was observed that registered person has short paid Federal Excise Duty u/s 3 read with Entry No. 8 of Table II of First Schedule to the Federal Excise Duty Act, 2005 and rule 40A read with section 7 of the Federal Excise Act, 2005 read with SRO 550 (1)/2006 dated 05.06.2006. On the basis of above irregularity the registered person was issued necessary show cause notice, which was duly complied with. However, after considering the reply filed assessment was completed vide order No. 14/2013 dated 01.01.2014, wherein Federal Excise Duty [FED] was charged amounting to Rs.79.542 (M) on the following heads:- i. Income from dealing in foreign currency. ii. Correspondent rebate. iii. Rebate from State Bank of Pakistan on home remittances. iv. Reimbursement of actual expenses (godown rent and staff salaries, legal charges and valuation charges). In first appeal, the learned CIR(A) disapproved levy of FED on “Income from dealing in foreign currency” and “rebate from State Bank of Pakistan”, whereas, case was remanded back to the DCIR on the issue of “reimbursement of godown expenses” with specific directions. The department feeling…

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