Tribunal rejects VCES appeal due to prior notice on same issue. Reimbursement for taxable service leads to ineligibility.

Anmol Housing Corporation Versus Commissioner of Service Tax, Chennai-III

Anmol Housing Corporation Versus Commissioner of Service Tax, Chennai-III - 2017 (52) S.T.R. 447 (Tri. - Chennai) Issues:
1. Rejection of VCES application under Service Tax Voluntary Compliance Encouragement Scheme, 2013.
2. Interpretation of second proviso to Section 106(1) of Finance Act, 2013.
3. Determination of whether issues in earlier and present disputes are identical.
4. Application of case law in similar matters.
5. Analysis of reimbursement of cost in relation to works contract services.

Analysis:
1. The case involves the rejection of the VCES application by the original authority under the Service Tax Voluntary Compliance Encouragement Scheme, 2013. The rejection was based on the second proviso to Section 106(1) of the Finance Act, 2013, which prohibits making a declaration on the same issue for any subsequent period where a notice or order of determination has been issued. The issue pertained to a notice for recovery of service tax liability of works contract for a specific period.

2. The appellant argued that the issues in the earlier dispute and the present proceedings were different. The appellant received reimbursement of money towards the cost incurred in part completion of the project from their partner, making the issues non-identical. Reference was made to a case law highlighting that the term "any issue" in the proviso must be pending before the Tribunal or tax authorities to apply.

3. The respondent contended that the earlier dispute and the present matter were not different as the taxable value collected, whether as "amount" or "reimbursement cost," was for the Works Contract Service provided by the appellant. A comparison was drawn with a High Court decision that differentiated the applicability of a similar case law based on the specifics of the disputes.

4. Upon hearing both sides, the Tribunal found that the reimbursement received by the appellant was for the value of taxable service already rendered for works contract services, even though the project was incomplete. The Tribunal concluded that the issues were not distinct, and the VCES application was hit by the second proviso to Section 106(1) as it sought a declaration on the same issue for which a notice had been previously issued.

5. The Tribunal held that the appellant's declaration under VCES implied acceptance of the department's view. Therefore, the appeal was dismissed, as the issues were deemed not separate, and the application was not eligible under the VCES due to the prior notice on the same issue. The judgment highlighted the importance of the specifics of the issues and the implications of seeking voluntary compliance under the scheme.