TaxTMI 
TaxTMI 
2026 (6) TMI 642
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....ion, the Department noticed that an investigation was started by the Assistant Commissioner, Service Tax division during February 2013 and the appellant unit was visited by the officers of the Service Tax II Division on 05.02.2013 in connection with recovery of service tax amount defaulted and was pending as on 01.03.2013. Hence, furnishing the details of correspondence with the appellant, the Designated Authority, issued a Show Cause Notice No.003/2013[VCES] dated 03.10.2013, proposing the rejection of the VCES declaration filed by the appellant, in terms of second proviso to Section 106 (1) of VCES, 2013 and Section 106 (2) (a) of VCES, 2013, on the allegation that Show Cause notice no.19/2010 dated 15.01.2010 has been issued on the same issue, viz, non-payment of service tax covering the earlier period from April 2004 to February 2009 and Order-in-Original No.4/2011 dated 23.02.2011 has been passed confirming the Service Tax demanded on the same issue and also that an inquiry/investigation initiated against the appellant (declarant) is pending as on 01.03.2013. Pursuant to a reply filed by the declarant dated 03.12.2013, the Adjudicating Authority vide the Order No. 31 / 2014 [V....
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....ation of the VCES scheme, 2013 directed that Show Cause Notice proposing intention to reject the declaration should be issued by the designated authority within 30 days of date of filing of the declaration. It was argued that the appellant had submitted the declaration on 08.07.2013 and the 30 days' time limit contemplated for issuance of notice proposing intention to reject the declaration should have been issued on or before 07.08.2013, admittedly the Show Cause Notice is dated 03.10.2013. Therefore, since the Show Cause Notice itself was barred by limitation, the consequent rejection of the declaration filed by the appellant pursuant to such notice is illegal. It is therefore submitted that appellant's appeal may be allowed. 5. Ms. Rajini Menon, Ld. Authorised Representative, appearing for the Respondent, reiterated the findings of the Appellate Authority in the impugned order. 6. Heard both sides and perused the material available on record. 7. The sole issue that arises for our consideration is whether the impugned order upholding the rejection of the VCES application filed by the appellant, is tenable. 8. It is a settled position in law that the SCN is the fou....
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.... as amended." 11. The contents of the above letter are of very general nature whereby documents have been asked for without any specific details, which in other words would mean that the enquiry which appears to have been contemplated in terms of the said letter was merely of 'roving nature' and would therefore not call for rejection on that ground under section 106(2) of the Act. In arriving at such a conclusion, we are supported by the decision of the Bombay High Court in Commissioner of Central Excise, Commissionerate Nagpur-II Nagpur v. L. V. Construction & Company, Nagpur 2017 (351) E.L.T. 94 (Bom.) whereby the learned Division Bench relying on the circular examined the communication 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 co....
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....ation filed by the respondent assessee. While holding so, the Tribunal relied on the two judgements of the Hon'ble Supreme Court that the Board Circulars are binding on the departmental officers and as per the Board Circular, dated 15-11-2013, the declaration made by the respondent -assessee was liable to be accepted. We do not find any illegality in the order of the Tribunal so as to admit the appeal." The aforesaid decision squarely applies to the facts of the present case and needless to mention the principle that the Circular is binding on the revenue. The Circular dated 25-11-2013 while referring to the conditions as enumerated in Section 106(2), specifically provides that these conditions may be 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 24-12014, however, as per the postal receipt annexed by the appellant, the said notice was received by him on 3-2-2014, which is beyond the period of thirt....
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....ys has to be followed scrupulously. 14. We would like to add that the very nomenclature of the scheme is to promote voluntary encouragement by the assessee to make the declaration of the tax dues. Since the very purpose of introducing the scheme is to motivate the registered assessee who had stopped filing the returns to file returns and pay the taxes. The underlying object is to reduce unnecessary litigation, which is evident from the clarifications made in the Circulars. The VCES Scheme as further clarified in the Circulars needs to be implemented so as to give full play which would not only benefit the assessee but also the revenue. Moreover, we are of the view that the guiding factor to determine whether the enquiry is of roving nature or not so as to call for rejection of the declaration is the clarification provided in the Circular dated 25-11-2013 while referring to the conditions prescribed in Section 106(2) of the Finance Act- "These conditions may be construed strictly and narrowly. The concerned Commissioner may ensure that no declaration is rejected on frivolous grounds or by taking a wider interpretation of the conditions enumerated in section 106(2).....