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2018 (12) TMI 1042 - HC - Service TaxMaintainability of appeal - rejection of VCES Declaration - whether CESTAT was right in holding the Appeal as not maintainable in the Tribunal? - Held that - An appeal under Section 85 of the Act, 1994 would lie against an order of rejection of a declaration passed by the Designated Authority under Section 106(2) of the Act, 1994. Payment of amount of service tax before the date of declaration of the scheme i.e. 10 May 2013 vis-a-vis applicability of the scheme - Held that - For a valid declaration two of the essential conditions were that the proceedings for either declaration or recovery of the tax dues should not be pending on 1 March 2013, and secondly, that the tax should not have been deposited before the said date. In the instant matter, both the conditions are fulfilled - It would be for the Appellate Authority to take a decision in the Appeal. The matter stands remitted to the Customs, Excise Service Tax Appellate Tribunal, West Zonal Bench at Mumbai for taking a decision in accordance with the provisions of law and on its own merits - appeal allowed by way of remand.
Issues:
1. Maintainability of the appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). 2. Applicability of the Voluntary Compliance Encouragement Scheme (VCES) under the Finance Act, 2013. 3. Appealability of the order passed under the VCES. 4. Interpretation of the conditions for a valid declaration under the VCES. Issue 1: Maintainability of the appeal before CESTAT The High Court considered whether CESTAT was correct in holding the appeal as not maintainable. The Appellant had paid service tax under the VCES and sought waiver of interest. The Designated Authority rejected the VCES declaration, leading to a series of appeals. The Appellant argued that the order under VCES was appealable based on precedents from other High Courts. The High Court analyzed these arguments and held that an appeal under Section 85 of the Act, 1994 would lie against the rejection of a declaration by the Designated Authority. Issue 2: Applicability of the VCES under the Finance Act, 2013 The Appellant filed a declaration under the VCES for waiver of interest on service tax dues paid on renting of immovable property services. The Designated Authority rejected the declaration citing a Circular issued by the Central Board of Excise and Customs. The Appellant contended that the Scheme was applicable and that they were entitled to its benefits. The High Court examined the legal provisions and relevant circulars to determine the applicability of the VCES in this case. Issue 3: Appealability of the order passed under the VCES The Appellant relied on a judgment from the Madras High Court to argue that the order passed under the VCES was appealable. The High Court examined the legal provisions and interpretations provided by the Madras High Court to conclude that an appeal under Section 85 of the Act, 1994 would indeed lie against the rejection of a declaration by the Designated Authority under the VCES. Issue 4: Interpretation of the conditions for a valid declaration under the VCES The High Court referred to a judgment from the Gujarat High Court regarding the conditions for a valid declaration under the VCES. It was held that for a valid declaration, proceedings for declaration or recovery of tax dues should not be pending before a specific date, and the tax should not have been deposited before that date. The High Court applied this interpretation to the present case and directed the Appellate Authority to consider this judgment while deciding on the appeal. In conclusion, the High Court allowed the appeal, quashed the order of the CESTAT, and remitted the matter back to CESTAT for a decision in accordance with the law and on its own merits.
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