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TMI Blog2022 (3) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... d not demand draft. It is seen that department has collected the bank details of the appellant and found that there was no sufficient fund to honour the cheque on 31.12.2013. On receiving the cheque, the department ought to have presented the cheque and if the same is dishonored could have rejected the declaration as the payment of 50% dues was not made. Without presenting the cheque, merely collecting the bank details on the date of closure of the scheme, it cannot be concluded that appellant has not paid the tax dues in accordance with the provisions of law. The rejection of declaration filed by appellant under VCES cannot sustain - Appeal allowed - decided in favor of appellant. - Service Tax Appeal No.40814 of 2021 - Final Order No. 40120/2022 - Dated:- 14-3-2022 - Ms. Sulekha Beevi C.S., Member (Judicial) Shri Ajay Kumar Gupta, Advocate for the Appellant Shri Vikas Jhajharia, AC (AR) for the Respondent ORDER The appeal is filed against the order passed by the lower authority rejecting the application filed under Voluntary Compliance Encouragement Scheme, 2013 on the ground that the appellant has not paid 50% of the declared tax dues on or before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed for payment of service tax under the Service Tax Rules, 1994. The method of payment of service tax is stated in Rule 6 of Service Tax Rules, 1994 which reads as under:- Rule 6 of the Service Tax Rules, 1994 (ST Rules), which is relevant for the purposes of the present case reads as under : 6. Payment of tax dues.- (1) The service tax shall be paid to the credit of the Central Government,- (i) by the 6th day of the month, if the duty is deposited electronically through internet banking; and (ii) by the 5th day of the month, in any other case, Immediately following the calendar month in which the [service is deemed to be provided as per the rules framed in this regard]: Provided that where the assessee is an individual or proprietary firm or partnership firm, the service shall be paid to the credit of the Central Government by the 6th day of the month if the duty is deposited electronically through internet banking or, in any other case, the 5th day of the month, as the case may be, immediately following the quarter in which the [service is deemed to be provided as per the rules framed in this regard]: [Provided also that the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount as per the cheque has been realized. 7. The department has dismissed the VCES application of the appellant stating that cheque cannot be accepted and that there was no sufficient funds on the date when the cheque was given to the department. They have not made any effort to present the cheque in the bank so as to see whether the bank would be able to honour the cheque on the date of presentation of the cheque. 8. He relied upon the decision of the Hon'ble High Court of Delhi in the case of Disha Securities and Manpower P. Ltd. Vs. Assistant Commissioner of Service Tax reported in 2016 (43) STR 82 (Del.). He prayed that the appeal may be allowed. 9. The learned AR Shri Vikas Jhajharia appeared for the department. He argued the matter and filed written synopsis. It is submitted by him that VCES was introduced with effect from 11.5.2013. The scheme provided for more than seven months time to file declaration and to pay 50% of the declared tax dues. However, considering the difficulties that may be faced by the declarants in remitting 50% payment at the closure date on 31.12.2013, the Ministry of Finance, Controller General of Accounts issued Instruction No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tried to present the cheque in the guise of demand draft. Though the appellant specified the number of the demand draft as well as the cheque, he had not specifically stated that 000416 pertains to cheque and not demand draft. 14. It is seen that department has collected the bank details of the appellant and found that there was no sufficient fund to honour the cheque on 31.12.2013. On receiving the cheque, the department ought to have presented the cheque and if the same is dishonored could have rejected the declaration as the payment of 50% dues was not made. Without presenting the cheque, merely collecting the bank details on the date of closure of the scheme, it cannot be concluded that appellant has not paid the tax dues in accordance with the provisions of law. 15. The Hon'ble High Court of Delhi had occasion to analyse a similar issue. The relevant paragraph is reproduced as under:- 12. An explanation is offered by the petitioner in the rejoinder that the Axis Bank initially proceeded on the mistaken belief that the payment of service tax had to be made online. However, it was later realised that online payment became mandatory only with effect from 1st Octobe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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