2017 (4) TMI 1171 - HC - Service Tax

Rejection of VCES-1 declaration - the case of the Revenue that the declaration was liable to be rejected under the provisions of Section 111 of the FA, 2013 as an enquiry was initiated against the respondent assessee by the DGCEI - Held that - 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 - The appellant cannot rely on the SCN, dated 17.10.2014 to substantiate the case of the appellant as the said sSCN was served on the respondent assessee after the assessee had tendered the declaration on 31.12.2013 - appeal dismissed - decided against Revenue.

Summary

Issues:
Challenge to order setting aside rejection of declaration under Notification No.10/2013ST - Enquiry initiated against respondent - Interpretation of communication by DGCEI - Applicability of Board Circular - Reliance on Supreme Court judgment - Relevance of show cause notice post declaration.

Analysis:
The central issue in this case pertains to the challenge against the rejection of a declaration filed by the respondent-assessee under Notification No.10/2013ST. The Commissioner contended that the declaration was false as an enquiry was initiated against the respondent by the DGCEI. However, the Tribunal, upon reviewing the communication from the DGCEI, concluded that no enquiry was pending at the time of filing the declaration. The Tribunal's decision was based on the communication's roving nature, requesting various documents without specifying a particular transaction. This interpretation aligned with a Board Circular clarifying the handling of such enquiries.

The appellant argued that the declaration was false, citing the show cause notice and communication from the DGCEI. However, the Tribunal found no merit in this argument, emphasizing the roving nature of the enquiry and the lack of specificity in the documents requested. The Tribunal also highlighted the binding nature of Board Circulars on departmental officers, supporting the acceptance of the declaration. The Tribunal's decision was further supported by Supreme Court judgments affirming the validity of Board Circulars in such matters.

Regarding the reliance on a Supreme Court judgment in a similar case, the Court found it distinguishable on factual grounds and not supportive of the appellant's position. The Court dismissed the appellant's reliance on this judgment, reinforcing the validity of the Tribunal's decision based on the specific circumstances of this case. Additionally, the Court emphasized that a show cause notice issued post-declaration could not be used to substantiate the rejection of the declaration, further solidifying the Tribunal's ruling.

In conclusion, the Court upheld the Tribunal's decision as just and proper, dismissing the Central Excise Appeal without costs. The judgment underscores the importance of interpreting communications and enquiries in line with legal provisions and relevant circulars, emphasizing the need for specificity and adherence to procedural guidelines in such matters.