Voluntary compliance scheme allowed net liability calculation with admissible Cenvat credit, and timely payment secured scheme benefit.

The Service Tax Voluntary Compliance Encouragement Scheme, 2013 was applied to unpaid service tax dues by treating the unpaid amount for the relevant period as the declared tax dues. The scheme required payment in cash, but it did not prohibit computing the net liability after accounting for legally admissible Cenvat credit already available, and the circular clarified that credit could still be taken and utilised under the Cenvat Credit Rules, 2004. Because the respondent paid the required amount within the prescribed time and completed the remaining payment thereafter, the statutory requirements were treated as satisfied and the benefit of the scheme was upheld.

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Issues: Whether the respondent was entitled to the benefit of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 for the unpaid service tax dues, and whether such dues had to be computed and paid only in cash without taking into account available Cenvat credit.

Analysis: The unpaid amount for the relevant period constituted the tax dues under the scheme, but the scheme and the rules did not prohibit the assessee from working out the net liability after considering legally admissible credit already available. The scheme required the declared tax dues to be paid in cash, and the circular clarified that there was no bar on taking and utilizing credit in accordance with the Cenvat Credit Rules, 2004. The respondent had paid the required amount within the time prescribed under the scheme and completed the remaining payment thereafter, showing compliance with the statutory framework.

Conclusion: The respondent was entitled to the benefit of the scheme, and the department's challenge failed.

Final Conclusion: The impugned appellate order granting the benefit of the scheme was upheld, and the department's appeal was dismissed.

Ratio Decidendi: Where the scheme permits payment of declared tax dues in cash and does not bar computation of the liability after accounting for admissible credit, timely payment in accordance with the scheme constitutes valid compliance and the benefit of the scheme cannot be denied.

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