TaxTMI 
TaxTMI 
2015 (11) TMI 56
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....s from the Director General of Central Excise Intelligence, Kanpur. The first notice was issued on 26.07.2011. That is not before us. The next communication is dated 07.09.2011. It reads as follows: "F. No. DGCEI/KRU/17/09/Part/839/08/9/11 Dated :07.09.11 To, The Managing Director, Uttaranchal Forest Development Corporation, Aranya Vikas Bhawan, 73, Nehru Road, Dehradun, Uttarakhand-248001 Sir, Subject : Enquiry regarding payment of Service Tax under the head 'Transport of goods by Road Service'-reg. Kindly refer to this office letter of even C.No. dated 26.07.11 on the above subject. In this regard, the desired information is still awaited from you, which is causing delay in completion of investigation. It is reiterated that it is gathered that your organization is incurring significant amount under the head freight/transportation charges for transportation of wood, minerals etc. In view of the statutory provisions of 'Goods Transport Agency' (copy enclosed), it appears that service tax is leviable on freight charges paid by your organization. In order to further enquire into the matter, it is requested that the following informat....
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....According to the appellant, the draft was out before that. Apparently, in anticipation of the same, appellant addressed a communication (Annexure No. 4 to the writ petition) dated 20.03.2013, which reads as follows: "Dated: 20/03/2013 To, The Senior Intelligence Officer, Directorate General of Central Excise Intelligence Kanpur Regional Unit 117/42 Sarvodaya Nagar, Kanpur Subject: Furnishing of Information Dear Sir, This has reference to your letter F.NO. DGCEI/KRU/17/09/Pt. dated 30.01.2013 regarding enquiry into payment of service tax under 'Transport of Goods by Road Service'. In this regards we wish to inform you that Uttarakhand Van Vikas Nigam a Statutory Corporation, initially formed under the Uttar Pradesh Van Nigam Act, 1974 and subsequently transferred to the State of Uttarakhand by Uttar Pradesh Van Nigam (Uttaranchal Amendment) Order, 2011 and latter name was changed to Uttarakhand Van Vikas Nigam by Uttarakhand Van Vikas Nigam (Amendment) Act, 2011 is a unit of the Uttarakhand Government. The activities assigned to Corporation are mainly scientific extraction and sale of forest produce and other natural resources within the State of Utt....
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....ey Nagar, Merrut-250 005 Sir, Sub- Non-Payment of Service Tax under the taxable service category of 'Transport of goods by road service' by Uttarakhand Van Vikas Nigam, Dehradun-Reg This Directorate had initiated an enquiry into non-payment of Service Tax by Uttrakhand Van Vikas Nigam (UVVN), Dehradun under the taxable service of 'Transport of goods by road services'. UVVN vide their letter dt. 20.03.2013 (copy enclosed) informed that they wish to deposit Service Tax under the 'Service Tax Voluntary Compliance Encouragement Scheme, 2013' and enclosed 19 Service Tax Registeration Certificates issued to their various divisions. Subsequently, vide letter dt. 04.04.2013 (copy enclosed), they informed that they have deposited Rs. 1,45,45,813 as advance Service Tax under the said Service Tax Voluntary Encouragement Scheme, 2013. As the said 19 service producers fall within your jurisdiction (either Meerut-I or Meerut-II Commissionerate), further investigation/action in the matter may please be conducted/taken by the concerned Commissionerate. After completion of the proceedings, the outcome may please be intimated to this Directorate. Yours faithfully, (Samanjasa ....
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.... (b) audit has been initiated, and such inquiry, investigation or audit is pending as on the 1st day of March, 2013, then, the designated authority shall, by an order, and for reasons to be recorded in writing, reject such declaration. 107. Procedure for making declaration and payment of tax dues. - (1) Subject to the provisions of this Scheme, a person may make a declaration to the designated authority on or before the 31st day of December, 2013 in such form and in such manner as may be prescribed. (2) The designated authority shall acknowledge the declaration in such form and in such manner as may be prescribed. (3) The declarant shall, on or before the 31st day of December, 2013, pay not less than fifty per cent of the tax dues so declared under sub-section (1) and submit proof of such payment to the designated authority. (4) The tax dues or part thereof remaining to be paid after the payment made under sub-section (3) shall be paid by the declarant on or before the 30th day of June, 2014: Provided that where the declarant fails to pay said tax dues or part thereof on or before the said date, he shall pay the same on o....
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....deny the benefit of the Scheme. Appellant has a case that the show-cause notice did not relate to the pending investigation and it only relates to the effect of the amount being deposited on 31.03.2013. He would further take us through the Circulars to which we shall presently advert to and contends that the officer has not, before passing the impugned order, borne in mind the purport of the Circulars and this has resulted in grave injustice. He reminds the Court that the appellant is a Public Sector Unit. It has deposited a huge amount of money and the amount could not be realized from the transporters. It is further submitted that the appellant was enticed into depositing the amount. It is a Scheme, which is an encouraging Scheme and the appellant has paid the money honestly and, hence, a liberal approach is called for. It is further the argument of the learned counsel for the appellant that the appellant must be treated at par with other honest tax payers. He points out that, under the Scheme, a person needs to only deposit 50 per cent immediately and he gets time till 30th June, 2014 to pay the balance amount and, still further, if the balance 50 per cent is not paid by 30th Ju....
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.... Scheme. Any other tax dues could be declared under the Scheme subject to the other provisions of the Scheme. 4. What is the scope of section 106(2)(a)(iii)? Whether a communication from department seeking general information from the declarant would lead to invoking of section 106(2)(a)(iii) for rejection of declaration under the said section? Section 106(2)(a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made thereunder, and such inquiry or investigation is pending as on the 1^st day of March, 2013. The relevant provisions, beside section 14 of the Central Excise Act as made applicable to service tax vide section 83 of the Finance Act, 1994, under which accounts, documents or other evidences can be requisitioned by the Central Excise Officer for the purposes of inquiry or investigation, are as follows,- (i) Section 72 of the act envisages requisition o....
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....claration under section 106(2) by the designated authority. Circular No. 170/5/2013-S.T., dated 25.11.2013 S.No. Issue raised Clarification 3 Whether benefit of VCES would be available in cases where documents like balance sheet, profit & loss account etc. are called for by department in the inquiries of roving nature, while quoting authority of section 14 of the Central Excise Act in a routine manner. The designated authority /Commissioner concerned may take a view on merit, taking into account the facts and circumstances of each case as to whether the inquiry is of roving nature or whether the provisions of section 106(2) are attracted in such cases. 14. Learned counsel for the appellant would submit with reference to the first Circular, which he referred to, that he has already taken the registration. Then, in regard to the Column No. 4, he would submit that, since there is no notice issued or proceedings taken under Sections 72, 73 and 73A, it cannot take him out of the purview of the Scheme. Next, he would contend with reference to Circular dated 08.08.2013 that it would not be sufficient as is clear from the clarification issued that there is a notice ....
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....dence between the parties. The first contention, which we will have to deal with, is, whether the learned counsel for the appellant is justified in contending that, since the proceedings were not taken under Sections 72, 73 and 73A of the Finance Act, 1994, the mere issuance of proceedings under Section 14 of the Central Excise Act, that too by the Deputy Director of Central Excise Intelligence, would be sufficient to take the case of the appellant outside the scope of the Scheme? We are of the view that there is merit in the contention of the learned counsel for the respondents that the Scheme expressly bars or rather renders ineligible persons against whom notices have been issued or orders have been passed under Sections 72, 73 and 73A of the Finance Act, 1994. This is a matter, which is beyond doubt. In respect of Sections 72, 73 and 73A, be it a notice or a case where a decision is taken there under, that will suffice to debar the person from invoking the benefit of the Scheme. It is, after providing for such a contingency, that the Legislature has further provided that, when there is an inquiry or investigation which is pending and which, for the purpose of our case, is based....
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....But, at the same time, the Legislature was conscious of the criticism that could be levelled against such a Scheme being in the nature of promotion of dishonesty. It, therefore, felt that the Scheme should be limited to those cases, where there were no proceedings at all pending and where the concerned assessee may have, out of ignorance which is partly contributed to by the revenue in not taking any sort of action against them, not made payments, which they were otherwise liable to pay. This interpretation of ours appears to be inevitable on the clear language of Section 106 read as a whole and in part. 18. Now, we will pass on to the consideration of the case of the appellant based on the Circulars. Undoubtedly, as far as the first Circular is concerned, at Column No. 1, which we have extracted above, appellant has taken out the registration. The declarant may get the benefit of immunity for not having taken registration earlier or not filed the return or for delay in filing the return. But, this is applicable provided the other disqualification present in Section 106(2), which is relevant for our purpose, is not applicable. As far as Column No. 3 is concerned, we do not think....
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....d documents are also called for, if the inquiry is of a roving nature, what is the approach to be made. The clarification reads that the authority may take the view on merit taking into account the facts and circumstances of each case, as to whether the inquiry is of a roving nature or whether the provisions of Section 106(2) are attracted. The argument of the learned counsel for the appellant in regard to this clarification appears, at the first blush, to have some merit. But the stand of the respondents is that, having regard to the nature of the correspondence under Section 14 of the Central Excise Act, which we have already extracted, it cannot be considered to be of a roving nature. He would submit that the notice under Section 14 of the Central Excise Act was specifically directed to transport service. In other words, the authorities had zeroed in on the specific service rendered for which the appellant became liable as a recipient. It is with reference to the same that the documents were also called for. We notice that, in the show-cause notice issued, it is stated that, though the amount was deposited on 31.03.2013, it was when the investigation was pending. A reply was giv....