Appealability of rejection under the Service Tax compliance scheme upheld where eligibility was decided on merits

An order rejecting a declaration under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 is appealable under Section 85 of the Finance Act, 1994 where eligibility is examined on merits. The scheme was held not to be a self-contained code; the parent Act continues to apply to proceedings under the scheme unless expressly excluded. The rejecting authority therefore cannot be treated as beyond appellate scrutiny merely because it acted under the scheme, and contrary departmental circulars were not accepted. The appeal could not be returned as not maintainable.

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Issues: Whether an appeal under Section 85 of the Finance Act, 1994 lies against an order rejecting a declaration under the Service Tax Voluntary Compliance Encouragement Scheme, 2013.

Analysis: The rejection order under the scheme was passed after examining the assessee's eligibility on merits and therefore partook the character of an adjudicatory decision. The scheme was introduced into the Finance Act, 1994 by the Finance Act, 2013 and was not a self-contained code. As a result, the provisions of the parent Act apply to proceedings under the scheme except to the extent specifically excluded. The authority rejecting the declaration could therefore not be treated as a mere designated authority for all purposes so as to exclude appellate scrutiny. The Court also declined to accept the contrary view based on the departmental circulars.

Conclusion: The order rejecting the declaration was appealable under Section 85 of the Finance Act, 1994, and the appeal could not have been returned as not maintainable.

Ratio Decidendi: Where a rejection order under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 determines eligibility on merits, it is an adjudicatory order appealable under the general appellate provision of the parent statute, since the scheme forms part of the Finance Act, 1994 and the Act applies unless expressly excluded.

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