2018 (12) TMI 1429 - HC - Service Tax

Maintainability of appeal - Voluntary Compliance Encouragement Scheme - case of Revenue is that VCES being a self contained code under Finance Act, 2013 without any appeal provision in the scheme dismissed the appeal holding that the appeal is not maintainable - Held that - Issue decided in the case of Narasimha Mills Pvt. Ltd. vs. Commissioner of C. Ex.(Appeals), Coimbatore, 2015 (6) TMI 787 - MADRAS HIGH COURT , where the very issue fall for consideration before the Madras High Court and the Madras High Court, by specific observation, dismissed the appeal on the ground that there is no remedy of appeal in the scheme would be giving unfettered power to the authority and same is not acceptable. The impugned order dated 22nd September, 2017 passed by the Customs, Excise and Service Tax Appellate Tribunal is quashed and set aside - Matter restored before CESTAT.

Summary

Issues Involved:
- Applicability of Voluntary Compliance Encouragement Scheme (VCES)
- Validity of appeal provision within the scheme
- Interpretation of appeal remedy under the basic Act

Analysis:

1. Applicability of VCES:
The appellant participated in the Voluntary Compliance Encouragement Scheme (VCES) and was engaged in providing taxable services under service tax registration. The appellant received a notice for unpaid taxes, leading to the confirmation of the demand by the adjudicating authority along with the imposition of penalties. The appeal was filed before the appellate tribunal challenging this decision.

2. Validity of Appeal Provision within the Scheme:
The main contention revolved around the absence of an appeal provision within the VCES scheme. The appellant argued that even though the VCES is a self-contained code under the Finance Act, 2013, lacking a specific appeal provision within the scheme should not render the appeal non-maintainable. Reference was made to judgments from the Madras High Court and Punjab & Haryana High Court, highlighting that the absence of an appeal provision would grant unfettered power to the authority, which is not acceptable.

3. Interpretation of Appeal Remedy under the Basic Act:
The High Court analyzed the observations made by the Madras High Court regarding the VCES scheme and the applicability of appeal provisions under the basic Act. It was emphasized that the remedy of appeal is a creation of statute to provide relief to aggrieved parties affected by adverse decisions. The absence of an appeal provision within a scheme would give uncontrolled powers to the authority, leading to a monopoly over the statute. The High Court agreed with the arguments presented by the appellant's counsel and set aside the tribunal's order, directing the CESTAT to hear the appeal afresh and pass appropriate orders expeditiously.

In conclusion, the High Court allowed the appeal, quashed the tribunal's order, and emphasized the importance of appeal provisions within schemes to ensure a fair and just process for aggrieved parties affected by adverse decisions.