2018 (5) TMI 1236 - AT - Service Tax

Tribunal emphasizes time limits in appeal decision, invalidating rejection of VCES declaration. Procedural compliance upheld.

The Tribunal allowed the appeal in favor of the appellant, emphasizing the importance of adhering to prescribed time limits in proceedings. The rejection ... Voluntary Compliance Entitlement Scheme (VCES) - time limitation - proceedings rejecting VCES application barred by limitation of time - Held that: - the CBEC vide circular dated 8.8.2013 has mandated that the show cause notice shall be given within 30 days of the date of filing of the said declaration or date of said circular whichever is later - In this case, admittedly, the show cause notice was handed over by the Service Tax department to the postal authorities on 9.9.2013 for delivery to the appellant. Thus, it is evident that the show cause notice has not been issued within 30 days from the date of issuance of the circular by CBEC. Proceedings initiated by the department for rejection of the VCES declaration cannot be sustained on the ground of limitation alone - appeal allowed - decided in favor of appellant. Issues:- Timeliness of show cause notice for rejection of VCES declarationAnalysis:The case involved a dispute regarding the timeliness of the show cause notice issued to reject the VCES declaration filed by the appellant, who was engaged in providing construction of residential complex services. The appellant had not discharged the service tax liability for the period from October 2007 to December 2012 and filed a VCES declaration for tax dues amounting to Rs. 4,75,783. The rejection of the VCES application by the adjudicating authority was based on the initiation of a specific enquiry against the appellant, which was pending. The appellant challenged this rejection before the Tribunal, arguing that the show cause notice issued on 6.9.2013 was time-barred according to Circulars issued by the CBEC. The appellant relied on previous Tribunal decisions to support the contention that the notice for rejection of VCES declaration must be issued within 30 days from the date of filing. On the other hand, the Revenue argued that the notice was issued within the stipulated time, considering the holidays falling in between.Upon examination, the Tribunal found that the show cause notice seeking rejection of the VCES declaration was handed over to postal authorities on 9.9.2013, which was beyond the 30-day limit prescribed by the CBEC circular. The Tribunal emphasized the strict adherence to the time limit for issuing such notices and concluded that the proceedings initiated for rejection of the declaration could not be sustained solely on the ground of limitation. Citing previous decisions, the Tribunal held that failure to comply with the prescribed time limit rendered the proceedings invalid. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.In summary, the Tribunal's decision revolved around the timeliness of the show cause notice for rejection of the VCES declaration, emphasizing the importance of adhering to prescribed time limits in such proceedings. The appellant's argument, supported by previous Tribunal decisions, prevailed as the Tribunal found that the notice was issued beyond the stipulated period, rendering the rejection of the declaration invalid. The judgment highlighted the significance of procedural compliance and upheld the appellant's appeal based on the lack of merit in the impugned order.