2016 (9) TMI 189 - AT - Service Tax

Rejection of VCES declaration - Section 107 of the VCES scheme non-payment of requisite 50% amount before the due date reason given by appellant for non-payment Held that - Even if the reason given is accepted there is no provision in the scheme to condone the delay in payment, therefore time line prescribed under the scheme cannot be extended in absence of any provision for condoning the delay. Issuance of show cause notice Held that - Provision for issuance of show cause notice has been provided under the circular is only under Section 106(2) which provides that if any deficiency or error is found in the declaration filed under Section 106(2) notice required to be issued, whereas in case of deposit of an amount as provided under 107 there is no provision for issuance of any notice. Since, the date of deposit is later than the filing of declaration, it cannot be expected from the designated authority to issue any notice. But, following principles of natural justice, opportunity of being heard can be provided to appellant by issuing the SCN issuance of SCN not required by law appeal rejected decided against appellant.

Summary

Issues:
1. Timely payment of dues under the VCES scheme.
2. Validity of show cause notice issued by the designated authority.
3. Interpretation of provisions for condonation of delay in payment.

Analysis:
1. The appeal was against the rejection of VCES declaration due to non-payment of 50% of the total dues by the specified deadline. The appellant claimed a system error caused the delay in payment of the balance amount. The appellant argued for condonation of the delay, citing a Board Circular and submitted evidence of their attempt to make the payment on time. The Tribunal noted the lack of provision in the scheme for condoning delay, upholding the rejection based on non-compliance with the payment timeline set by the statute.

2. The appellant contended that the show cause notice issued by the designated authority was time-barred, as per a Circular requiring issuance within 30 days of declaration. The Revenue argued that the notice was issued for default in payment, not for any deficiency in the declaration. The Tribunal agreed with the Revenue, stating that the notice was not required for deposit compliance under Section 107. The Tribunal found the notice issuance within one month from declaration unnecessary but appreciated it as a gesture of natural justice.

3. The Tribunal referenced a judgment of the Hon'ble Gujarat High Court, emphasizing the strict adherence to the timeline prescribed under the VCES scheme. The Tribunal reiterated that the scheme lacked provisions for extending deadlines or condoning delays in payment. The Tribunal concluded that the rejection of the declaration was lawful, dismissing the appeal based on the non-compliance with the payment timeline and the absence of provisions for condonation of delay. The Tribunal upheld the impugned order rejecting the appellant's appeal.