2017 (2) TMI 319 - AT - Service Tax

Rejection of VCES declaration - clerical error - the appellant had wrongly mentioned in Sl.No.6 of the said declaration. The tax liability of ₹ 4,08,857/- admitted by them was correctly declared in the enclosures attached to the said declaration. The appellants have also admittedly paid 50% of the said liability amounting to ₹ 2,04,429/- at the time of filing the declaration - Held that - it was not intended to file a wrong declaration but it was a typographical error - the appellant has fulfilled his actual tax liability at the time of filing the declaration and the enclosures contained correct amount disclosed, one typographical error cannot dis-entitled the appellant from the benefit of the scheme in so far as the amount declared therein dues concerned. APMC contract - some amount was held back by APMC as security deposit. The Service Tax liability on the said amount works out to ₹ 44,903/-, appellant had accidentally failed to consider the said liability while declaring the VCES declaration - Held that - the appellant had failed to consider this said amount in VCES declaration, no benefit in respect of said duty and penalty can be granted to the appellant. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
1. Rejection of VCES declaration by the Commissioner.
2. Typographical error in VCES declaration.
3. Failure to consider Service Tax liability on works for APMC.

Analysis:

Issue 1: Rejection of VCES declaration by the Commissioner
The appellant filed a VCES declaration which was partially rejected by the Commissioner. The appellant contended that a typographical error in the declaration should not lead to rejection. The appellant had paid 50% of the total dues at the time of filing. The Tribunal noted that the error was unintentional and cited a similar case where rejection without allowing rectification was deemed a miscarriage of justice. The Tribunal held that the rejection without giving an opportunity to rectify was unjust, especially when the tax dues were paid in full. The appeal was allowed, and the VCES application was accepted.

Issue 2: Typographical error in VCES declaration
The appellant admitted to a clerical error in the VCES declaration where the tax liability was incorrectly mentioned. However, the correct amount was declared in the enclosures attached to the declaration. The Tribunal observed that the appellant had paid 50% of the declared liability at the time of filing, indicating no deliberate default. The Tribunal referred to a case where similar circumstances led to the application being accepted. It was held that fulfilling the actual tax liability and a typographical error should not deprive the appellant of the scheme's benefits regarding the declared amount.

Issue 3: Failure to consider Service Tax liability on works for APMC
The appellant failed to include the Service Tax liability on works for APMC in the VCES declaration. The Tribunal stated that since this amount was not considered in the declaration, no benefit could be granted regarding this duty and penalty. Therefore, the appeal was partially allowed, considering this aspect.

In conclusion, the Tribunal acknowledged the unintentional error in the VCES declaration and emphasized the importance of giving the appellant an opportunity to rectify such errors. The Tribunal highlighted that fulfilling the actual tax liability and rectifying typographical errors should not hinder the appellant from availing benefits under the scheme.