9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 446 - HC - Service TaxRejection of declaration under Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) - Where SCN were issued before the Scheme - Payment of Tax before the enactment of Finance Act, 2013 - Benefit of export of services - HELD THAT - Since Export of Service Rules, 2005 introduced by Notification No.9/2005-ST dated 03.03.2005 and Taxation of Services ( Provided from outside India And Received in India) Rules, 2006 introduced by Notification No.11/2006-ST dated 19.04.2006 became redundant in the light of the amendment in the Finance Act, 2012 new set of rules came to be framed. Place of Provision of Services Rules, 2012 replaced Export of Service Rules, 2005 introduced by Notification No.9/2005-ST dated 03.03.2005 and Taxation of Services ( Provided from Outside India And Received in India) Rules, 2006 introduced by Notification No.11/2006-ST dated 19.04.2006. Thus, the petitioner cannot state that neither a notice nor an order of determination had been issued to the petitioner in respect of any period on any issue prior to the Scheme. The amendment in the Finance Act, 2012 did not introduce service tax on intermediary or insurance intermediary service for the first time. It was liable to tax all along in terms of section 65(105)(zl) of the Finance Act, 1994 w.e.f. 01.05.2006 prior to that the service - In fact, the case of the petitioner that it was exempt from payment of tax in terms of Export of Service Rules, 2005 was rejected by the Tribunal vide Final Order No.1278/08 dated 17.11.2008 and by Commissioner of Central Excise vide Order in Original No. 19/2010 dated 03.11.2010. Thus, for the earlier period also, the petitioner has been held liable to pay tax for up for the normal period of limitation. Mere change in the provisions in the Finance Act, 1994 vide Finance Act, 2013 did not alter the nature of levy of service tax on the services provided by the petitioner. Even according to the Department, the petitioner was not exempted from payment of service tax under the provisions of the Export of Service Rules, 2005. For the period after 01.07.2012, Rule 9(c) of the Place of Provisional Rules, 2012 specifically continued the levy on services provided by the petitioner. The issue is the same issue in respect of which it has been issued with Show Cause Notice. The Service Tax Voluntary Compliance Scheme, 2013, is not intended for a person like the petitioner - petition dismissed.
Issues Involved:
1. Eligibility for the Service Tax Voluntary Compliance Encouragement Scheme, 2013. 2. Validity of payments made before the enactment of the Finance Act, 2013, under the scheme. 3. Impact of pending Show Cause Notices and orders on eligibility under the scheme. 4. Availability of alternate remedies under Section 84 of the Finance Act, 1997. Issue-wise Detailed Analysis: 1. Eligibility for the Service Tax Voluntary Compliance Encouragement Scheme, 2013: The petitioner’s declaration under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, was rejected because it did not comply with Section 106(1) of the Finance Act, 2013. Section 106(1) specifies that any person who has been issued a notice or an order of determination under Sections 72, 73, or 73A before March 1, 2013, is not eligible to declare tax dues under the scheme. The petitioner had been issued six Show Cause Notices for various periods, which disqualified them from availing the scheme's benefits. 2. Validity of Payments Made Before the Enactment of the Finance Act, 2013, Under the Scheme: The petitioner made payments on April 9, 2013, and June 5, 2013, before the enactment of the Finance Act, 2013. However, according to the Central Board of Excise and Customs (CBEC) Circular No. 170/58/2013-ST dated August 8, 2013, immunity from interest and penalty is only for "tax dues" declared under the scheme. Payments made before the scheme's enactment do not qualify for this immunity. The court upheld this view, stating that the scheme was intended for defaulters who had not filed returns and not for those who had already made partial payments. 3. Impact of Pending Show Cause Notices and Orders on Eligibility Under the Scheme: The petitioner had been issued Show Cause Notices for the period from July 16, 2001, to September 2011, and adjudicated orders were pending before higher authorities, including the Supreme Court. Section 106(1) of the Finance Act, 2013, and its second proviso state that if a notice or order of determination has been issued for any period on any issue, no declaration can be made for the same issue for any subsequent period. The court found that the petitioner’s case involved the same issue of service tax on commission received from re-insurance business, thus disqualifying them from the scheme. 4. Availability of Alternate Remedies Under Section 84 of the Finance Act, 1997: The respondent argued that the petitioner had an alternate remedy by way of appeal under Section 84 of the Finance Act, 1997. The court acknowledged this but focused on the substantive issues of eligibility and the timing of payments under the scheme. The court ultimately dismissed the writ petition, reinforcing that the petitioner did not meet the criteria for the scheme and that the scheme was not intended for cases like the petitioner’s. Conclusion: The court concluded that the petitioner was not eligible for the Service Tax Voluntary Compliance Encouragement Scheme, 2013, due to the issuance of Show Cause Notices and pending adjudications on the same issue. Payments made before the enactment of the Finance Act, 2013, were not eligible for immunity under the scheme. The court dismissed the writ petition, affirming that the scheme was not intended for persons in the petitioner’s situation.
|
