2018 (12) TMI 263 - AT - Service Tax

VCES Declaration Rejection Upheld, Appeal Dismissed under Section 106(1) Proviso 2

The Tribunal upheld the rejection of the VCES declaration, citing the prohibition under proviso 2 of Section 106(1) of VCES for declaring tax dues on the ... Rejection of Voluntary Compliance Encouragement Scheme (VCES) - the tax dues declared by the appellant were for the subsequent period on the same issue for which a show Cause Notice dated 04.01.2011 for the period w.e.f. 01.01.2009 to 31.03.2010 had already been issued - time limitation - Held that:- Vide the impugned VCES-I, the appellant has declared his tax dues of ₹ 4,50,756 against the renting of immovable property services for the period w.e.f. 01.10.2008 to 31.03.2010. This perusal makes it clear that it is not merely that the category of service rendered is same but the allegation of not discharging the tax liability for rendering the said service and that the period for the alleged default is also same. Thus it becomes clear that a notice has already been issued to the appellant in respect of the same issue for the same period for which the appellant made the declaration under VCES-I - The said declaration is prohibited under proviso 2 to Section 106(1) of VCES 2013 - Adjudicating Authority below are held to have committed no error while rejecting the said VCES Scheme. Time Limitation - Held that:- The time limit for issuing notice u/s 101 of VCES will be applicable if and only if the assesse is entitled to file the VCES - Once it is apparent on record that rejection of VCES of appellant is correct due to a wrong declaration and non compliance of statutory provision, there is no need to look into the issue of limitation. Appeal dismissed - decided against appellant. Issues:1. Interpretation of the Voluntary Compliance Encouragement Scheme (VCES) provisions.2. Rejection of VCES declaration due to the same issue for a subsequent period.3. Applicability of time limitation for issuing Show Cause Notice under VCES.Analysis:Issue 1: Interpretation of VCES provisionsThe case involves the appellant engaged in renting immovable property services who filed a VCES declaration for tax dues. The Department rejected the VCES declaration, citing the second proviso to Section 106(1) of the Finance Act, 2013. The appellant argued that the issue in the VCES declaration was different from the previous Show Cause Notice, emphasizing that the service category cannot be considered the same issue. The Department contended that the liability for the same period was involved, justifying the rejection. The Tribunal analyzed Section 106 of VCES, emphasizing that the term 'issue' was not defined in the Acts, resorting to Civil/Criminal Procedural Codes for interpretation. It concluded that the VCES declaration was prohibited under proviso 2 to Section 106(1) as a notice had already been issued for the same issue and period, upholding the rejection of VCES.Issue 2: Rejection of VCES declarationThe rejection of the VCES declaration was based on the Department's observation that the tax dues declared were for a subsequent period on the same issue as a previous Show Cause Notice. The Tribunal found that the VCES declaration was rightly rejected under proviso 2 of Section 106, as the same issue and period were involved, despite the appellant's argument that the issues were different. The Order-in-Original confirming the rejection was upheld, and the appeal was dismissed.Issue 3: Time limitation for issuing Show Cause NoticeThe appellant argued that the Show Cause Notice was barred by time as it was beyond the normal period of limitation and invoked the extended period erroneously. The Tribunal held that the time limit for issuing the notice under VCES would apply only if the appellant was entitled to file the VCES. Since the rejection of the VCES was deemed correct due to a wrong declaration, the issue of limitation was not considered. The Tribunal found no infirmity in the rejection and dismissed the appeal.In conclusion, the Tribunal upheld the rejection of the VCES declaration, emphasizing the prohibition under proviso 2 of Section 106(1) of VCES for declaring tax dues on the same issue for a subsequent period. The appeal was dismissed, and the argument regarding the time limitation for the Show Cause Notice was deemed unsustainable due to the correct rejection of the VCES declaration.