2018 (6) TMI 332 - AT - Service Tax

Rejection of VCES declaration - whether both the lower authorities were correct in dismissing the VCES declaration filed by the appellant on 18/12/2013 as incorrect declaration on the ground that there was an enquiry initiated against the appellant? - Held that - It is the fact that the appellant had filed the VCES declaration on 18/12/2013 and the notice issued by the Assistant Commissioner of Service Tax - II is dated 18/08/2015 for rejection of VCES declaration - This notice was issued by the lower authority when the CBEC Circular dated 18/08/2013 was in the knowledge of the department, wherein CBEC has clearly clarified that notice for rejection of VCES scheme should be issued within 30 days - rejection of VCES not justified - appeal allowed.

Summary

Issues:
1. Consideration of VCES declaration rejection
2. Appealability of VCES declaration rejection before Tribunal

Analysis:
1. The main issue in this case was whether the lower authorities were correct in dismissing the VCES declaration filed by the appellant on 18/12/2013 due to an ongoing enquiry against the appellant. The Chartered Accountant for the appellant argued that the rejection of the VCES declaration was incorrect as the eligibility was not in doubt when filed, and the rejection notice was issued almost 1 ½ years later, contrary to the CBEC Circular's requirement of issuing a rejection notice within 30 days. The Chartered Accountant cited various tribunal decisions supporting the appeal against rejection of VCES, including cases like Abhi Engineering Corporation and Sidhi Vinayaka Enterprises Pvt Ltd. The Tribunal found merit in the submissions and held that the appeal against rejection of VCES declaration lies before the Tribunal, making the current appeal maintainable.

2. Upon careful consideration, the Tribunal noted that the appellant had indeed filed the VCES declaration on 18/12/2013, and the rejection notice was issued on 18/08/2015, well beyond the 30-day limit prescribed by the CBEC Circular. The Tribunal expressed surprise at the delayed notice issuance, especially when the Circular was known to the department. Relying on previous tribunal decisions like Abhi Engineering Corporation and Sidhi Vinayaka Enterprises Pvt Ltd, the Tribunal concluded that the impugned order was unsustainable and set it aside, allowing the appeal. The Tribunal's decision was based on the settled law and upheld the appeal against the rejection of the VCES declaration.

In conclusion, the Tribunal found that the rejection of the VCES declaration by the lower authorities was incorrect due to the delayed notice issuance and upheld the appeal, setting aside the impugned order. The Tribunal's decision was supported by the established law and previous tribunal decisions, making the appeal maintainable and ruling in favor of the appellant.