2018 (6) TMI 1001 - AT - Service Tax

Rejection of Voluntary Compliance Entitlement Scheme (VCES) Declaration - rejection on the ground that vide letter dt. 28.08.2012 addressed to M/s. Marvel Reality inquiry was initiated against all the appellants. Therefore the case does not fall under the VCES Scheme as per Section 106 (2) of Finance Act, 2013 - Whether the letter dt. 28.8.2012 issued to M/s. Marvel Realtors can be considered as initiation of the inquiry contemplated under Section 106 of the Act? Held that - All the appellants are private limited company and partnership firm in different names. Therefore the letter addressed to the M/s. Marvel Realtors cannot be considered as service of this letter to all the appellants. Even though the letter was issued, on this technical lapse on the part of the Revenue it cannot be said that the inquiry contemplated under Section 160(2) of the Finance Act was initiated. Tribunal in the case of M/s. L.V. Construction & Company 2016 (1) TMI 825 - CESTAT MUMBAI relying on the Board Circular No.170/5/2013-ST dt. 08.08.2013 held that where the information is sought of roving nature even though communication regarding information quoted Section 14 of the Act. The provisions of Section 106(2)(a) shall not attract. - In the facts of the present case also the information sought is of roving nature for the reason that the similar information was asked from more than one assessee and the same is not specific in relation to any particular assessee. Therefore the facts of the present case is identical facts of the above decision. Considering both the aspect that first there is no service of any inquiry letter to the appellants, secondly the information sought for by the department is of roving nature, the VCES declaration filed by the appellant is acceptable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of whether a letter addressed to a specific company constitutes initiation of inquiry under Section 106 of the Finance Act, 2013.
2. Determination of whether information sought from multiple entities of roving nature falls under the provisions of Section 106(2)(a).
3. Assessment of the applicability of Board Circulars and legal precedents in cases involving inquiries of roving nature.

Analysis:

Issue 1:
The case involved the rejection of a VCES declaration based on the initiation of an inquiry against the appellants. The appellant argued that the inquiry initiated against a different company could not be attributed to them. The Tribunal agreed, emphasizing that the letter addressed to a specific company did not constitute service to all appellants. Relying on legal precedents and Board Circulars, the Tribunal concluded that the technical lapse on the Revenue's part did not initiate the inquiry under Section 106(2) of the Finance Act, 2013. The Tribunal set aside the impugned order and allowed the appeals.

Issue 2:
The Tribunal examined whether seeking information of roving nature from multiple assesses falls under the provisions of Section 106(2)(a). Citing Board Circulars and legal judgments, the Tribunal highlighted that such inquiries do not attract the said provision. The Tribunal referenced specific cases and circulars to support its decision, emphasizing that the information sought was of roving nature and not specific to any particular entity. Consequently, the Tribunal held that the VCES declaration filed by the appellant was acceptable, setting aside the impugned order and allowing the appeals.

Issue 3:
In assessing the applicability of Board Circulars and legal precedents, the Tribunal emphasized the importance of considering the facts and circumstances of each case. By referencing relevant judgments and circulars, the Tribunal established a clear framework for determining the validity of inquiries of roving nature. The Tribunal distinguished the present case from previous judgments relied upon by the Revenue, highlighting the specific nature of the issue at hand. Ultimately, the Tribunal concluded that the inquiry initiated did not meet the criteria under Section 106(2)(a) of the Finance Act, 2013, thereby supporting the acceptance of the VCES declaration and setting aside the impugned orders.

This detailed analysis of the legal judgment showcases the Tribunal's thorough consideration of the issues raised and the application of legal principles to reach a well-founded decision.