2018 (4) TMI 24 - AT - Service Tax

Rejection of VCES Declaration - short payment of duty under the scheme - appellant was supposed to pay 50% of the said amount by 31st December 2013 which they failed to deposit - Against the 50% amount, they have paid ₹ 7,07,259/-. Thus they have short paid ₹ 1,64,759/- which was subsequently paid on 8.1.2014 - Held that - as per VCES scheme, the time limit for making payment of 50% of the total amount declared is 31.12.2013 and there is no provision for extension of time to the statutory limit provided in the scheme - the time limit provided in the scheme should have been adhered to for depositing the 50% amount by 31.12.2013 which the appellant failed to comply. Rejection of VCES Declaration justified - appeal dismissed - decided against appellant.

Summary

Issues:
1. Compliance with the Voluntary Compliance Encouragement Scheme (VCES) 2005 regarding the payment deadline.
2. Eligibility for benefits under VCES.
3. Extension of time for deposit under VCES.
4. Adherence to statutory time limits.

Comprehensive Analysis:

1. Compliance with VCES Payment Deadline: The appellant filed a VCES declaration but failed to pay 50% of the declared amount by the specified deadline of 31st December 2013. They subsequently paid a portion of the amount but fell short by &8377; 1,64,759, which was paid on 8th January 2014. The adjudicating authority rejected the VCES application, deeming the appellant ineligible for benefits under the scheme. The primary issue was the failure to comply with the payment deadline set by VCES.

2. Eligibility for VCES Benefits: The Commissioner (Appeals) upheld the rejection of the VCES application. The appellant argued that the delay in payment was due to financial hardships and should be condoned. However, the designated authority found that the VCES scheme did not allow for an extension of the payment deadline beyond 31st December 2013. The appellant's non-compliance with this requirement led to the rejection of the application.

3. Extension of Time for Deposit: The appellant sought an extension of time for making the payment based on financial difficulties. The argument was that the delay of seven days in payment should be condoned. However, the Tribunal noted that the VCES scheme did not provide for any provision to extend the time limit for the initial deposit of 50%, which was due by 31st December 2013. The lack of statutory authority to grant such extensions was a crucial factor in the decision.

4. Adherence to Statutory Time Limits: The Tribunal emphasized the importance of adhering to the statutory time limits specified in the VCES scheme. It was noted that the designated authority did not have the power to extend the payment deadline beyond what was stipulated in the scheme. The Tribunal distinguished a previous case where payment was prevented by system faults from the present case where the appellant knowingly delayed the payment. The judgment upheld the decision to reject the VCES application due to non-compliance with the payment deadline.

In conclusion, the Tribunal upheld the impugned order rejecting the VCES application, citing the appellant's failure to adhere to the statutory time limits for payment under the scheme. The appeal was dismissed, emphasizing the importance of timely compliance with the provisions of the VCES scheme.