Voluntary Compliance Scheme eligibility upheld where audit quantification and a limited show cause notice did not bar declaration.

An audit report quantifying service tax dues did not amount to an order of determination under the Finance Act, 1994, and therefore did not by itself disqualify a declaration under the Voluntary Compliance Encouragement Scheme. Because the earlier show cause notice was confined to medical insurance services and did not cover the dues declared under the scheme, the statutory bar was not attracted. The Tribunal's view that the declaration was valid was upheld, and the appeal failed.

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Issues: Whether the respondent was ineligible to make a declaration under the Voluntary Compliance Encouragement Scheme on the ground that an audit report had already quantified the service tax dues and a show cause notice had been issued in respect of part of the liability before the cut-off date.

Analysis: The scheme under Section 106 of the Finance Act, 2013 permits declaration only where no notice or order of determination under Sections 72, 73 or 73A of the Finance Act, 1994 had been issued or made before 1 March 2013. An audit report does not amount to an order of determination under those provisions. The show cause notice referred to in the record was limited to dues relating to medical insurance services and did not cover the dues comprised in the declaration. The declaration was, therefore, not hit by the statutory disqualification and the view taken by the Tribunal required no interference.

Conclusion: The respondent was not ineligible to avail the scheme on the facts of the case, and the appeal was liable to be dismissed.

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