2018 (5) TMI 1210 - AT - Service Tax

Voluntary Compliance Encouragement Scheme (VCES) - case of Revenue is that since the dues were paid prior to operationalization of the VCES 2013, the VCES declaration needs to be rejected, relying upon the Board s clarification No. 174/9/2013-ST dated 25/11/2013 - Held that - Similar issue came up for consideration before the Hon ble High Court of Gujarat in the case of Sadguru Construction Company v. Union of India 2014 (5) TMI 219 - GUJARAT HIGH COURT , where even the CBEC clarification dated 08/08/2013 on the issue was also considered by the Hon ble High Court and in paragraph 31, quashed and set aside the communication which rejected the VCES declaration - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether appellant's declaration under Voluntary Compliance Encouragement Scheme (VCES) needs to be rejected or not.

Analysis:
The appeal was filed against Order-in-Appeal No: NSK-EXCUS-000-APP-357-13-14 dated 13/03/2014 by the Commissioner of Central Excise & Customs (Appeals), Nashik. The main issue was whether the appellant's VCES declaration should be rejected. The appellant indicated in the declaration that they paid the dues on 02/05/2013 before the VCES scheme became effective on 10th May 2013. Both lower authorities rejected the declaration, citing Board's clarification No. 174/9/2013-ST dated 25/11/2013.

The Tribunal referred to a similar case before the High Court of Gujarat, where the court held that the declaration under VCES should be accepted if the tax dues were not paid by 1-3-2013. The court emphasized that the scheme allowed declarations for taxes due and payable for the period between 1-10-2007 to 31-12-2012, not paid as of 1-3-2013. The court clarified that taxes deposited before 10-5-2013, the scheme's framing date, should still be considered for declaration.

The Tribunal, following the High Court's judgment, found the impugned orders unsustainable and set them aside. The Tribunal allowed the appeals, emphasizing that the conditions for a valid declaration under VCES were met in this case. The CBEC clarification on the issue was also considered and set aside by the High Court, supporting the acceptance of the VCES declaration.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned orders and allowing the appeals. The judgment highlighted the importance of considering the statutory provisions of the VCES scheme and the timeline for tax dues payment to determine the validity of declarations under the scheme.