2019 (5) TMI 1247 - AT - Service Tax

Rejection of VCES declaration - wrongful declaration - Renting of Immovable Property Service - HELD THAT - The appellant had filed declaration under VCE Scheme on 07.10.2013 in form VCES-1 declaring tax dues of ₹ 1,19,643/- for the period from April, 2011 to December, 2012. An acknowledgment in the form VCES-2 was issued to appellant on 10.10.2013. Subsequently discharge certificate in the form VCES-3 was issued on 30.10.2013. On 01.10.2014 show cause notice was issued making allegations that declaration under VCE Scheme filed on 07.10.2013 was substantially false. It is provided through Section 108 of Finance Act, 2013 that once a discharge certificate under Sub-section (7) of Section 107 is issued then revenue does not have authority to reopen any proceedings in respect of declaration made. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service tax demand on 'Renting of Immovable Property Service'
2. Validity of declaration under VCES scheme
3. Authority to reopen proceedings after issuance of discharge certificate

Analysis:

1. The appellant was providing 'Renting of Immovable Property Service,' and a service tax demand of ?8,864/- was confirmed against them for the period from 01.04.2011 to 31.12.2012, along with an equal penalty. The Original Authority found that the appellant had filed a substantially false declaration under the VCES scheme. The appellant had initially declared tax dues of ?1,19,643/- for the same period under the VCES scheme, with acknowledgment and discharge certificates issued accordingly.

2. The appellant's declaration under the VCES scheme was alleged to be substantially false, leading to the issuance of a show cause notice on 01.10.2014. However, it was noted that a discharge certificate had been issued in accordance with Sub-section (7) of Section 107 of the Finance Act, 2013. Section 108 of the Finance Act, 2013, explicitly states that once a discharge certificate is issued under Sub-section (7) of Section 107, the revenue authority does not have the power to reopen any proceedings related to the declaration made.

3. Considering the provisions of Section 108 of the Finance Act, 2013, it was concluded that the impugned show cause notice and proceedings were legally flawed. The Tribunal set aside the impugned order and allowed the appeal, emphasizing that the revenue authority lacked the authority to reopen proceedings after the issuance of the discharge certificate under the VCES scheme.

This judgment highlights the importance of adhering to the statutory provisions governing declarations under schemes like the VCES and underscores the limitations on revenue authorities in reopening proceedings once a discharge certificate has been issued.