2018 (1) TMI 1173 - AT - Service Tax

Voluntary Compliance Entitlement Scheme - scope of SCN - Held that - The discussions in the said order is only with regard to grounds on which the appellant is not eligible to be considered for the VCES scheme. The Commissioner (Appeals) has observed that since the show cause notice was issued for the period prior to the period covered under the scheme, would make the appellant ineligible to file a declaration under the scheme - rejection of VCES declaration filed by the appellant upheld - appeal dismissed.

Summary

Issues:
1. Rejection of Voluntary Compliance Encouragement Scheme (VCES) application.

Analysis:
The case involved the appellant being directed to pay service tax on renting of immovable property service, leading to a show cause notice demanding service tax, interest, and penalties. After adjudication, an Order-in-Original was passed confirming the demand of service tax and penalties under sections 77 and 78 of the Finance Act, 1994. The appellant then filed an appeal before the Commissioner (Appeals), resulting in an Order-in-Appeal modifying the demand by deducting property tax paid by the appellant. Subsequently, the appellant opted for the VCES and filed a declaration, which was rejected through a show cause notice proposing rejection. The rejection of the VCES application was then upheld by the Commissioner (Appeals) in the impugned Order-in-Appeal, leading to the present appeal against the rejection of the VCES application.

The appellant's counsel argued that the confusion regarding the levy of immovable property tax, especially in light of a decision by the Delhi High Court, and the pending matter before the Apex Court should be considered. The appellant had paid the service tax but not the interest, seeking interference to absolve the liability. On the other hand, the respondent pointed out that the appeal was against the rejection of the VCES application and not against the confirmed demand, interest, or penalties, which had attained finality. The Commissioner (Appeals) had already upheld the demand, interest, and penalties imposed.

Upon hearing both sides and perusal of records, the Tribunal noted that the appeal was filed against the rejection of the VCES application as directed by the High Court. The Commissioner (Appeals) upheld the rejection based on the appellant's ineligibility under the scheme due to the period covered by the show cause notice. The Tribunal concluded that the appeal lacked merit as it was not against the confirmed demand, interest, or penalties but solely against the rejection of the VCES application. Consequently, the appeal was dismissed.