2023 (8) TMI 1145

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....s (f) Special service provided by Builders (g) Legal Consultancy Services The appellant filed the VCES declaration on 27.12.2013 declaring their tax dues as Rs. 1,17,98,160/- for the period 01.04.2012 to 31.12.2012, on account of Rental Services, PLC and Transfer Charges, Residential Construction Services, Commercial Construction Services and Services under reverse charge. The 50% of the declared tax was deposited by the appellant before 31.12.2013 and the remaining was deposited within the prescribed period. 3. The Designated Authority issued the show cause notice dated 24.01.2014 to the effect that an enquiry against the company was initiated by Anti Evasion Branch of the Commissionerate and the same is pending as on 01.03.2013 and therefore it appears that under Section 106 of the Finance Act, 2013 they are not eligible to file the declaration under VCES. The Designated Authority vide order dated 20.01.2016 rejected the declaration, inter-alia observing as under:- "However, it is seen that as part of the investigation, the Department had asked for documents and moreover a visit under Rule 5A of Service Tax Rules was made by the Department on 18.0....

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....ce Tax VCES came into effect on enactment of the Finance Bill, 2013 on 10.05.2013. Section 106 of the Act provided for the making of a declaration of tax dues in respect of which no notice or order of determination under Section 72, 73 or 73A has been issued before 01.03.2013. Clause (2) of Section 106 provides for rejection of such a declaration in the eventualities specified therein and sub-clause (a) thereof provides where an enquiry or investigation in respect of service tax not levied or not paid or short levied or short paid has been initiated and which is pending as on 01.03.2013. In view of certain references seeking clarification as regards the scope and applicability of the Scheme, Circular No. 169/4/2013-ST dated 13.05.2013 was issued. The relevant para of the said Circular concerning the issues at hand is given below:- 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....

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.... issued at S. No. 4 of the circular No. 169/4/2013-ST dated 13.05.2013, as regards the scope of section 106(2)(a) of the Finance Act, 2013, wherein it has been clarified that the provision of section 106(2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidences are requisitioned by the authorised officer from the declarant under the authority of a statutory provision. A communication of the nature as mentioned in the previous column would not attract the provision of section 106(2)(a) even though the authority of section 14 of the Central Excise Act may have been quoted therein. 12. Whether declarant will be given an opportunity to be heard and explain his cases before the rejection of a declaration under section 106(2) by the designated authority? Yes. In terms of section 106(2) of the Finance Act, 2013, the designated authority shall, by an order, and for reasons to be recorded in writing, reject a declaration if any inquiry/ investigation or audit was pending against the declarant as on the cutoff date, i.e., 1.3.2013. An order under this section shall be passed following the principles of natural justice. To allay any apprehens....

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.... of VCES would be eligible in respect of 'tax dues' for the year 2012, i.e., period not covered by the inquiry, investigation or audit. (2) If an inquiry or investigation, pending as on 1.3.2013 was in respect of a specific issue, say renting of immovable property, benefit of VCES would be eligible in respect of 'tax dues' concerning any other issue in respect of which no inquiry or investigation was pending as on 1.3.2013. It is also reiterated that the designated authority, if he has reasons to believe that the declaration is covered by section 106(2), shall give a notice of intention to reject the declaration within 30 days of the date of filing of the declaration stating such reasons to reject the declaration. Commissioners should ensure that this time line is followed scrupulously. 3 Whether benefit of VCES would be available in cases were documents like balance sheet, profit and 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 that facts and circ....

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....ication sent by the DGCEI asking for the copies of the balance sheets, agreement, work order, details of payments received and copy of ST-3 returns and held the enquiry to be of a 'roving nature' as there were no specific details for which the enquiry was sought. The relevant para of the judgement is quoted below:- "On hearing the learned Counsel for the appellant and on a perusal of the orders of the Commissioner and the Tribunal as also the relevant Circulars and the communication of the DGCEI dated 19.2.2013, it appears that there is no scope for interference with the order of the Tribunal in this appeal. The Board Circular, dated 25.11.2013 clarifies that in cases where the documents like the balance-sheets, profit and loss account etc., are called for, by the Department in the enquiries of roving nature, while quoting the authority of Section 14 of the Central Excise Act in a routine manner, the Commissioner concerned would be entitled to take a view on merit, taking into account the facts and circumstances of each case, as to whether the enquiry is of roving nature or whether the provisions of Section 106(2) of the Act are attracted to such cases. It appears on a rea....

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....e construed strictly and narrowly. 12. We have no hesitation in accepting the plea taken by the learned Counsel for the appellant that the show cause notice is barred by time. In the present case, the appellant had filed the declaration for VCES on 27.12.2013 and though the notice is shown to have been issued on 24.01.2014, however, as per the postal receipt annexed by the appellant, the said notice was received by him on 03.02.2014, which is beyond the period of thirty days. The circular dated 08.08.2013 in the clarification stated that the designated authority shall give a notice of intention to reject the declaration within thirty days of the date of filing of the declaration. The giving of notice does not mean mere issuance of the notice and therefore the date of issue of the show cause notice would not be relevant for computing the period of thirty days. The very term 'give' implies in simple terms to allow someone to have or to provide someone something so unless and until the person to whom it has been issued receive the notice the service of notice shall not be complete, the observation of the Apex Court in MCD vs. Dharma Properties (P) Ltd., (2018) 11 SCC 230, resolv....