2016 (9) TMI 1364 - AT - Service Tax

Scope of SCN - Voluntary Compliance Encouragement Scheme (VCES)- The impugned order concurred with the finding of the original authority that an inquiry was already underway and relying upon correspondences of July 2010 August 2011 and June 2012 held them ineligible to participate in the declaration scheme - scope of SCN - Circular No. 174/9/2013-ST - Held that - It is seen that the show cause notice has been issued well after the deadline stipulated in the circular. The notice does not make any reference to a summons but only to a statement. It would appear that in order to avoid rejection on frivolous grounds the requirement of citing a summons or any document specifying the authority and specific information has been prescribed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against rejection of declaration under Voluntary Compliance Encouragement Rules, 2013.
2. Consideration of submissions in the impugned order.
3. Interpretation of Section 106(2) of Chapter VI of Finance Act, 2013.
4. Compliance with Circular No. 174/9/2013-ST regarding issuance of rejection notice.

Analysis:

1. The appellant, a provider of 'construction of residential complex service,' filed a declaration of unpaid dues amounting to &8377;6,92,160/- for a specific period. The dues were paid within the stipulated time frame. However, the order-in-appeal upheld the rejection of the declaration under the Voluntary Compliance Encouragement Rules, 2013. The impugned order relied on previous correspondences and ongoing inquiries to deem the appellant ineligible for the scheme.

2. The appellant contended that the impugned order failed to address their submissions adequately, essentially reiterating the decision of the lower authority. It was argued that the order exceeded the scope of the notice served on them, indicating a lack of proper consideration of their defense.

3. The impugned order invoked Section 106(2) of Chapter VI of the Finance Act, 2013, to justify the rejection based on an ongoing inquiry initiated before a specified date. However, the appellant highlighted Circular No. 174/9/2013-ST issued by the Central Board of Excise & Customs, which outlined specific requirements for invoking such provisions. The appellant pointed out that the show cause notice was issued after the prescribed deadline and did not reference a summons as required.

4. The Tribunal noted that the show cause notice did not meet the criteria set forth in the circular, as it lacked specific references to documents or summonses initiating a non-roving inquiry. The absence of clear identification of the investigation or inquiry raised doubts about the validity of the rejection. Consequently, the appeal was allowed, and the impugned order was set aside due to non-compliance with the procedural requirements outlined in Circular No. 174/9/2013-ST.

This detailed analysis covers the key issues raised in the legal judgment, providing a comprehensive overview of the case and the Tribunal's decision.