2018 (3) TMI 455 - AT - Service Tax

Tribunal overturns rejection of VCES declaration due to missed deadline, upholding procedural fairness.

The Tribunal allowed the appeal, setting aside the rejection of a declaration filed under the Voluntary Compliance Encouragement Scheme, 2013 (VCES). The ... Rejection of VCES declaration - whether the SCN proposing to reject VCES declaration issued after a period 30 days from the date of filing of VCES declaration, is sustainable or not? - Held that: - The Tribunal in the case of Siddhi Vinayaka Enterprises Pvt. Ltd. Vs CST Raipur [2016 (6) TMI 19 - CESTAT NEW DELHI] relied upon Board's Circular No.169/4/2013-ST dt. 13.05.2013 and held that the SCN issued after a period of 30 days is non-est. The SCN issued after a period of 30 days of declaration filed under VCES is unsustainable - appeal allowed - decided in favor of appellant. Issues:1. Rejection of declaration filed under Voluntary Compliance Encouragement Scheme, 2013 (VCES) due to a show cause notice issued beyond 30 days of filing.Analysis:The appellants, engaged in promoting and joint developing industrial and commercial complexes, faced a dispute regarding service tax payment for the period 10.09.2004 to 31.07.2008. In 2013, they applied under VCES to declare and pay service tax on works contract services rendered from 1.4.2010 to 30.09.2010. However, the designated authority issued a show cause notice on 28.01.2014, proposing rejection of the declaration based on the second proviso to Section 106(1) of the Finance Act, 2013. The Commissioner (Appeals) affirmed this rejection, leading the appellants to appeal before the Tribunal.The appellant's counsel argued that as per Circular No.174/9/2013-ST, a show cause notice rejecting a VCES application must be issued within 30 days of filing the declaration. In this case, the notice was issued on 28.1.2014, well beyond the stipulated 30-day period from the filing date of 27.12.2013. Citing precedents like Siddhi Vinayaka Enterprises Pvt. Ltd. Vs CST Raipur and Final Order No.42606/2017, the appellant sought to set aside the rejection order.The main issue for consideration was the validity of a show cause notice rejecting a VCES declaration issued after 30 days from the filing date. Relying on the Circular No.169/4/2013-ST and previous tribunal decisions, the Tribunal concluded that a notice issued beyond 30 days is unsustainable. Following the precedents, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief as per the law.Therefore, the Tribunal's decision was based on the procedural requirement that a show cause notice rejecting a VCES declaration must be issued within 30 days of filing, as established by Circulars and previous tribunal decisions, ensuring procedural fairness and adherence to statutory timelines.