2023 (10) TMI 1165 - AT - Service Tax

Rejection of benefit of Voluntary Compliance Encouragement Scheme, 2013 - ante-dated SCN - case of Revenue is that since the notice under section 72 of the Finance Act, 1994 have been issued dated 18th January 2013, which is prior to 1 March 2013, the Appellant is not eligible to avail the benefit of VCES, 2013. HELD THAT - The Show Cause Notice dated 31st December 13 is anti-dated and have been dispatched only on 10 January 2014 by speed post - It is found that the Show cause Notice has been issued beyond the period of 30 days as prescribed by the Board vide clarificatory circular No. 170/05/2013-ST dated 8 August 2013 and further reiterated vide the Circular No. 174/09/2013 ST dated 25 November 2013. The Show Cause Notice is bad and hit by limitation - the impugned order set aside - appeal allowed.

Summary

Issues:
The judgment involves the rejection of the benefit of Voluntary Compliance Encouragement Scheme, 2013 (VCES, 2013) u/s 107(l) of the Finance Act, 2013 based on the issuance and compliance of Show Cause Notice dated 31st December 2013.

Summary:

Issue 1: Rejection of VCES Application
The Appellant, a managing director of a construction company, applied for settlement of tax dues under VCES, 2013. However, the application was rejected based on a Show Cause Notice issued on 31st December 2013, stating that an enquiry was pending against the Appellant for Service Tax liabilities prior to 1 March 2013. The rejection was challenged through various legal avenues.

Issue 2: Compliance with Circulars
The Tribunal observed that the Show Cause Notice dated 31st December 2013 was anti-dated and dispatched after more than 30 days, violating the Board's circulars. Circular No. 170/05/2013-ST dated 8 August 2013 emphasized the need for the declarant to be heard before rejection under section 106. Further, Circular No. 174/09/2013-ST dated 25 November 2013 reiterated the procedural requirements for rejection.

Issue 3: Limitation of Show Cause Notice
The Tribunal noted that the Show Cause Notice was dispatched beyond the 30-day period from the date of application, as clarified by the Board's circulars. The notice was dispatched on 10 January 2014, exceeding the prescribed timeframe, rendering it invalid and hit by limitation.

Decision:
Considering the procedural violations and the delay in issuing the Show Cause Notice, the Tribunal held that the Notice was invalid and set aside the impugned order. The Appellant was deemed entitled to consequential benefits in accordance with the law.

This judgment highlights the importance of adherence to procedural requirements and timelines in the context of tax compliance schemes and enforcement actions.