Law: Federal Excise Act, 2005

Section: 2(12a),2(46),3(1)(d),4(3),8, 2, 2(2),14,19(1),43A,43A(2)

FEDERAL EXCISE ACT, 2005 (VII OF 2005)---Sections: 2(12a), 2(46), 3(1)(d), 4(3), 8, 12, 12(2), 14, 19(1), 43A & 43A(2) - SRO. 56(1)/2006, dated 05.06.2006 - F.E.D. charge on A.S.P. support revenue - Essential pre-requisites to create charge on FED under head Franchise services - Duties specified in the First Schedule - Filing of return and payment of duty etc:- Determination of value for the purpose of duty - Recovery of unpaid duty or of erroneously refunded duty or arrears of duty, etc:- Issuance of duplicate Federal Excise documents - Special procedure for payment of FED on franchise fees or technical fees or royalty under Franchise Agreement - Distribution Agreement executed between the appellant and foreign group entities - Failure to pay FED on franchise services - Show Cause Notice - Passing of order-in-original by DCIR creating demand of FED on franchise services along with penalties u/s 19(1) and default surcharge u/s 8 of the Act - Order of DCIR upheld by the CIR(A) - Appeals accepted by the Appellate Tribunal. - Matter remanded back to Appellate Tribunal on making a reference application by the Department, for the decision of appeals afresh - Validity - FACTS Brief facts giving rise to the instant appeals are that the appellant, a private limited company, remained engaged in the supply of hardware and sublicensing of software along with related support services to customers across Pakistan. These business activities were undertaken in terms of a distribution agreement executed between the appellant and foreign group entities. Show cause notices under section 14 of the Federal Excise Act, 2005 were issued by the concerned Deputy Commissioner Inland Revenue which culminated in orders-in-original whereby principal amounts of FED demand relating to “franchise services held to be recoverable along with penalties imposed under section 19(1) of the Act and default surcharge under section 8. Feeling aggrieved, the appellant preferred appeals before the Commissioner Inland Revenue (Appeals-1). The Commissioner Inland Revenue (Appeals-1), upheld orders-in-original. Feeling aggrieved, the appellant preferred appeals before the Appellate Tribunal Inland Revenue…

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