2017 (11) TMI 883 - AT - Service Tax

VCES Scheme - short payment of service tax - claim of Revenue was that the VCES declaration made by appellant was false - Held that - as required under sub Section (1) of Section 108 of Finance Act, 2013 the appellant had complied with the requirements of said sub Section (1) of Section 108 ibid and, therefore, as provided under said sub Section (1) appellant had got immunity from penalty interest and any other proceedings under the Chapter - Section 111 of Finance Act, 2013 empowers demand to be issued under Section 73 of Finance Act, 1994 - neither the demand under Section 111 of Finance Act, 2013 nor demand under Section 73 of Finance Act, 1994 was maintainable in view of immunity granted to the appellant by provisions of sub Section (1) of Section 108 of Finance Act, 2013 - appellant is entitled to be issued with certificate in the form VCES-III - appeal allowed.

Summary

Issues:
1. Validity of the demand under Section 111 of Finance Act, 2013
2. Applicability of the immunity provision under Section 108 of Finance Act, 2013
3. Compliance with the provisions of Sections 107 and 108 of Finance Act, 2013

Analysis:

1. Validity of the demand under Section 111 of Finance Act, 2013:
The appellant filed a declaration of tax dues and made partial payments as per the provisions of Section 107 of the Finance Act, 2013. The Revenue issued show cause notices under Section 73 of the Finance Act, 1994 and Section 111 of the Finance Act, 2013, demanding additional tax amounts. However, the Tribunal held that the demands were not maintainable due to the immunity granted to the appellant under Section 108(1) of the Finance Act, 2013. The Tribunal set aside the Order-in-Original and allowed the appeal, stating that the appellant should be issued the certificate in the form VCES-III.

2. Applicability of the immunity provision under Section 108 of Finance Act, 2013:
Section 108 of the Finance Act, 2013 provides immunity from penalty, interest, and other proceedings upon payment of declared tax dues. The appellant in this case complied with the requirements of Section 108(1) by paying the declared tax dues and interest. As a result, the Tribunal concluded that the appellant was entitled to immunity from penalty, interest, and any other proceedings under the Chapter, rendering the demands made under Section 111 and Section 73 invalid.

3. Compliance with the provisions of Sections 107 and 108 of Finance Act, 2013:
The Tribunal examined the appellant's compliance with the provisions of Sections 107 and 108 of the Finance Act, 2013. It was found that the appellant filed the declaration of tax dues, made the required payments, and obtained the necessary acknowledgments as per the prescribed procedures. The Tribunal emphasized that the appellant had fulfilled the conditions laid down in the relevant sections, leading to the grant of immunity and the subsequent setting aside of the demands made by the Revenue.

In conclusion, the judgment by the Appellate Tribunal CESTAT ALLAHABAD highlights the importance of adherence to the statutory provisions governing tax declarations and payments. The decision underscores the significance of immunity provisions under the Finance Act, 2013 and the implications for demands raised by tax authorities. The detailed analysis provided by the Tribunal ensures a fair and just outcome for the appellant based on the legal framework established by the relevant statutes.