Voluntary Compliance Encouragement Scheme declaration rejected without properly considering timely payment records and declared service tax liability.

The rejection of a declaration under the Voluntary Compliance Encouragement Scheme, 2013 was found unsustainable because the declared service tax liability had been paid within time. The record showed that 50% of the declared amount was paid on 30.12.2013 and the balance on 17.02.2014, while the amount tendered under the scheme was separately paid and was not part of the ST-3 returns as assumed by the authorities. On that basis, the declaration was accepted and the assessee succeeded.

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Issues: Whether the rejection of the declaration filed under the Voluntary Compliance Encouragement Scheme, 2013 was justified despite payment of the declared service tax liability within time.

Analysis: The declaration was filed for the relevant period declaring taxable services and the corresponding service tax liability. The record showed that 50% of the declared liability was paid on 30.12.2013 and the balance was paid on 17.02.2014. The amount paid under the scheme was separately tendered and was not part of the ST-3 returns in the manner assumed by the authorities below. The rejection was therefore based on a failure to appreciate the payment records and the declaration particulars.

Conclusion: The rejection of the declaration was unsustainable. The declaration under the Voluntary Compliance Encouragement Scheme, 2013 was accepted, and the assessee succeeded.

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