VCES payment deadline proviso applies only to balance dues, while default permits statutory recovery.

The proviso to Section 107(4) of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 was construed as confined to delayed payment of the balance amount under that sub-section, because its reference to delay from 1 July 2014 and interest up to 31 December 2014 showed no extension of the mandatory initial payment of at least fifty per cent under Section 107(3). A declarant who failed to make the required payment under Section 107(3) remained subject to the scheme's consequences, and Section 110 authorised recovery of unpaid declared dues with interest under Section 87 of the Finance Act, 1994.

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Issues: Whether the proviso to Section 107(4) of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 extends the time for payment of the fifty per cent amount required under Section 107(3), and whether on default the authorities are confined to recovery under Section 110 of the scheme.

Analysis: The declaration under the scheme could be made only in respect of tax dues falling within the defined period, and Section 107 separately regulated the initial payment of not less than fifty per cent by 31 December 2013 and the payment of the remaining dues under sub-section (4). The proviso expressly referred to delay from 1 July 2014 and to interest payable up to 31 December 2014, which showed that it was attached only to sub-section (4) and not to sub-section (3). The scheme also made clear that a declarant who defaulted in payment would remain within the scheme's consequences, and Section 110 specifically provided for recovery of unpaid declared dues with interest under Section 87 of the Finance Act, 1994.

Conclusion: The proviso applied only to Section 107(4) and did not extend the time for the mandatory payment under Section 107(3); on default, recovery under Section 110 was permissible. The decision was against the assessee and in favour of the Revenue.

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