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TMI BlogGuidelines in respect of the Dispute Resolution Scheme, 2008-reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... pute Resolution Scheme, 2008-reg. The Dispute Resolution Scheme, 2008 has been notified vide Chapter VI of the Finance Act, 1994. This compounding scheme has been notified as a one time measure for quick resolution of disputes. (a) involving small service tax amounts upto Rs 25000; and (b) involving non-recovery of penalty or interest. However, cases involving non-payment of service tax after having collected the same from client/customer are not included in the Scheme. 2. Salient feature of the Scheme: The salient features of this Scheme are as follows: (i) The Scheme covers all such cases where tax arrears, including interest and penalty, were payable or leviable under the Finance Act, 1994, but not paid prior to 1.3.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the provisions of Chapter VI of the Finance Act, 2008 , provide the procedure to be followed for operating the Scheme, which is as follows: (1) The Commissioner of Central Excise shall, for the purposes of this Scheme notify, by way of an officer order, an officer not below the rank of Assistant Commissioner of Central Excise as the designated officer. (2) The declarant, opting for the Scheme, shall make a declaration before the designated officer in Form 1 (as prescribed under rule 3 of the aforesaid Rules). (3) The designated officer shall get the declaration verified. Upon verification of declaration, the designated officer shall, within fifteen days, issue an order (as prescribed under section 96 (1) of Chapter VI of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g there to, amnesty under the Scheme would be available on payment of an amount equal to 50% of the service tax amount involved in the SCN. The penalty and interest would stand waived. (ii) Similarly, in the case of a confirmed demand, where service tax arrears amount as on 1.3.2008 is upto Rs 25,000, with unpaid interest or penalty relating there to, amnesty under the Scheme would be available on payment of an amount equal to 50% of the service tax arrears. The penalty and interest would stand waived. (iii) In a case where an SCN is pending only for imposition of both, penalty and interest, amnesty under the Scheme would be available on payment of 25 % of the interest payable plus 25% of the 'maximum' prescribed penalty leviable. If ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e show cause notice)=I (iv) Penalty: not decided The compounding amount shall be @ 50% of service tax amount plus education cess payable thereon= Rs 10,000 plus education cess on Rs 10,000. Penalty and interest shall be waived off. Illustration 2: The assessee has already paid the service tax amount of Rs 20,000 along with education cess. However, a show cause notice has been issued demanding (i) interest at the applicable rate; and (ii) penalty as applicable under various sections of the Finance Act, 1994. The tax arrears as per section 94(b) of the Finance Act, 1994: (i) Service tax: Nil (ii) Education cess: Nil (iii) Interest: as applicable (as mentioned in the show cause notice)= say Rs 5000 (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble = say Rs 2000 (iv) Penalty: Rs 10000 The compounding amount shall be @ 50% of service tax amount plus education cess payable thereon = Rs 12,500 plus education cess on Rs 12,500. Penalty and interest shall be waived off. Illustration 4: In the above illustration (illustration 3), the assessee has paid the service tax amount of Rs 25,000 along with education cess. However, (i) interest at the applicable rate; and (ii) penalties have not been paid. The tax arrears as per section 94 (b) of the Finance Act, 1994: (i) Service tax: Nil (ii) Education cess: Nil (iii) Interest: as applicable (as mentioned in the show cause notice)= say Rs 5000 (iv) Penalty: Rs 10000. The compounding amount shall be @ 25% of Intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, the Dispute Resolution Scheme Rules, 2008 have been issued vide notification No. 28/2008-ST, dated 4.6.2008. 6. The Commissioner of Central Excise and Service shall notify well in advance, by way of an office order, the designated officer in respect of their jurisdiction. 7. This Scheme envisages culmination of pending litigation by quick resolution of pending disputes which fall within the specified Wide publicity may be given, in the form of trade notices, advertisements, seminars and interaction with the trade associations to make the stakeholders aware of the Scheme. Any difficulty faced in implementing the above provisions may be immediately brought to the notice of the undersigned. 8. Receipt of the Circular may b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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