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2022 (1) TMI 809 - AT - Service TaxRejection of VCES scheme - rejection on the ground that the Voluntary Compliance Encouragement Scheme (VCES) did not have provision for a statutory appeal against the order of rejection of declaration under Section 106 (2) of the Finance Act by the Designated Authority - HELD THAT - The Hon ble jurisdictional High Court of Judicature at Madras in the case of THE NARASIMHA MILLS PRIVATE LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE (APPEALS) , THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE 2015 (6) TMI 787 - MADRAS HIGH COURT , has clearly held that an order of rejection of benefit under the impugned scheme is appealable under Section 85 of the Finance Act, 1994. The impugned communication by the Commissioner (Appeals) cannot sustain and therefore, the same is set aside. The Commissioner (Appeals) is directed to take up the appeal preferred by the appellant and dispose of the same on merits and in accordance with law, after affording reasonable opportunities to the appellant - Appeal allowed by way of remand.
Issues:
Appeal against rejection under Voluntary Compliance Encouragement Scheme (VCES) - Provision for statutory appeal - Interpretation of scheme as part of Finance Act - Appealability under Section 85 of the Finance Act, 1994. Analysis: The appeal was filed against a communication by the Commissioner of Customs, Central Excise & Service Tax rejecting the appellant's appeal under the Voluntary Compliance Encouragement Scheme (VCES). The Commissioner had stated that the VCES did not provide for a statutory appeal against the rejection of a declaration under Section 106 (2) of the Finance Act by the Designated Authority. However, the appellant, through their consultant, referred to a judgment by the Hon'ble High Court which held that an order of rejection under the scheme is appealable under Section 85 of the Finance Act, 1994. Upon reviewing the High Court judgment, it was noted that the Service Tax Voluntary Compliance Encouragement Scheme, 2013 is to be construed as part and parcel of the Finance Act, 1994. The High Court emphasized that when a scheme is considered part of the Act, all other provisions of the Act, except those specifically excluded, would apply to proceedings under the scheme. The High Court highlighted the importance of the appeal provision in statutes, stating that it provides hope to aggrieved parties affected by adverse decisions. The absence of an appeal provision would render the authority's decision final and give them unchecked power, leading to potential misuse of authority. Based on the High Court's ruling, the Tribunal set aside the Commissioner's communication rejecting the appeal and directed the Commissioner to consider the appeal on its merits and in accordance with the law, providing reasonable opportunities to the appellant. The appeal was allowed by way of remand, indicating that the matter would be reconsidered by the Commissioner (Appeals) in light of the High Court's interpretation of the scheme as part of the Finance Act, making the rejection appealable under Section 85 of the Finance Act, 1994.
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