2016 (9) TMI 892 - AT - Service Tax

VCES declaration - rejection of declaration filed under the Voluntary Compliance Encouragement Scheme, 2013 - whether an appeal would lie to Tribunal against the rejection of VCES declaration filed by the appellant - Held that - by following the judgment of Hon ble High Court of Madras in the case of Narasimha Mills Pvt. Ltd. vs. CCE, Coimbatore 2015 (6) TMI 787 - MADRAS HIGH COURT , we hold that all these appeals are maintainable before the Bench. It is found that whether the appellants herein are eligible for the VCES benefit or otherwise has to be decided by the designated authority. In these cases in hand, the designated authority has in the group companies case on the very same issue accepted the VCES declaration while in the appellants case herein, rejected the same. Therefore, without going into the merits of the case and keeping all the issues open, we record that the designated authority should be given an opportunity to reconsider the issue afresh. Accordingly, we set aside the impugned order and restore the VCES declarations to their original numbers before the designated authority with a direction that he should decide the VCES declarations on merits after following the principles of natural justice. - Appeals allowed by way of remand

Summary

Issues Involved:
- Appealability of rejection of VCES declaration to Tribunal
- Merits of the case regarding VCES declarations

Analysis:
1. Appealability of rejection of VCES declaration to Tribunal:
The Tribunal deliberated on the issue of whether an appeal would lie to the Tribunal against the rejection of a declaration filed under the Voluntary Compliance Encouragement Scheme, 2013 (VCES). Citing a judgment of the Hon'ble High Court of Madras in Narasimha Mills Pvt. Ltd. vs. CCE, Coimbatore, it was established that an order passed by the designated authority is appealable under Section 85 of the Finance Act, 1994. Therefore, the Tribunal held that the appeals in question were maintainable before the Bench.

2. Merits of the case regarding VCES declarations:
During the hearing, arguments were presented regarding the acceptance of VCES declarations filed by other group companies of the appellant before the designated authority, leading to the dropping of proceedings. The appellant's counsel expressed confidence in convincing the designated authority on the merits of the VCES issue. The departmental representative did not object to remanding the matter back to the designated authority for reconsideration. The Tribunal, after considering submissions and records, concluded that the eligibility of the appellants for VCES benefits needed to be determined by the designated authority. Noting the differing decisions in the group companies' case and the appellant's case, the Tribunal decided to set aside the impugned order and instructed the designated authority to reevaluate the VCES declarations on merits, ensuring the principles of natural justice were followed. Consequently, the appeals were allowed by way of remand to the designated authority.

This comprehensive analysis covers the issues of appealability of VCES rejection to the Tribunal and the merits of the case regarding VCES declarations, providing a detailed insight into the judgment delivered by the Appellate Tribunal CESTAT MUMBAI.