2015 (10) TMI 1853 - AT - Service Tax

Rejection under VCES, 2013 Statutory provision of Appeal under VCES - Powers of Commissioner (Appeals) to entertain the appeal - Revenue contends that VCES, 2013 does not have any provision for filing appeal against the order passed rejecting the declaration and has issued communication rejecting the declaration - Appeal filed by Respondent thus not maintainable. Respondent contends that deposit made was sufficient to discharge the obligation of deposit of 50% of declared tax dues and communication rejecting the declaration was not properly communicated through SCN. Held That - VCES cannot have an independent existence thus all provisions of Act except to the extent specifically excluded would be applicable Finality of the scheme could be attained from the communication of the Revenue and it is for the designated authority to decide whether the SCN has to be issued or not - Argument of the Revenue to file writ petition as remedy does not make any sense Decision made in the case of Narasimha Mills Pvt. Ltd. Vs. CCE (Appeals) 2015 (6) TMI 787 - MADRAS HIGH COURT followed Appeal is maintainable - Decided against the revenue.

Summary

Issues:
1. Rejection of VCES declaration by designated authority.
2. Appeal filed challenging the rejection.
3. Lack of statutory provision for appeal in VCES scheme.
4. Communication of rejection by designated authority.
5. Maintainability of appeal without formal rejection order.
6. Legal remedy available to the respondent.

Analysis:

1. The respondent, a proprietorship firm engaged in renting immovable property services, filed a declaration under the Voluntary Compliance Encouragement Scheme (VCES), 2013, offering immunity from interest and penalty for tax defaulters. The respondent declared tax dues as Rs. 4,64,663, including an amount paid earlier erroneously. The designated authority rejected the declaration for not complying with the 50% deposit condition by the deadline.

2. Aggrieved by the rejection, the respondent appealed before the Commissioner (Appeals), who found that the actual tax dues were Rs. 3,85,064 after deducting the erroneous amount. The appeal was allowed, granting immunity from interest and penalty. The appeal challenging this decision raised concerns about the lack of statutory provision for appeal in the VCES scheme and the absence of a formal rejection order by the designated authority.

3. The Revenue argued that the VCES scheme does not provide for appeals against rejection. However, the Tribunal held that the scheme, being under the Finance Act, 2013, is subject to all provisions of the Act unless specifically excluded. The communication from the authority informing rejection, though not in the form of an order, was deemed final, allowing the appeal to be maintainable.

4. Referring to a Madras High Court decision, the Tribunal emphasized that the VCES scheme is part of the Finance Act, making all provisions of the Act applicable. The Tribunal dismissed the Revenue's appeal, stating that the rejection communication constituted a final decision, and the appeal was valid. The legal remedy available to the respondent was upheld, and the appeal was ultimately dismissed.

In conclusion, the Tribunal's decision upheld the validity of the appeal filed by the respondent against the rejection of the VCES declaration, emphasizing the application of the Finance Act provisions to the scheme and the sufficiency of the rejection communication as a final decision.