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TMI Blog2022 (12) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Revenue that VCES declaration filed by the appellant has been rejected or even a notice for such rejection has been issued. It is settled law that the notice for rejection of the declaration has to be issued within thirty days as per Board Circular No 174/9/2013-ST. In absence of any such notice for rejection, it is but natural that appellant would act as per VCES-2 issued to him acknowledging the declaration. Appellant paid the declared liability and intimated the designated authority of the payment made. Even then the designated authority has not issued the settlement memo under Form VCES-3. Appellant cannot be faulted for the reason as stated in the impugned order. Section 111 of the Finance Act, 2013 clearly provides that in case there is some liability or the declaration made is found to be improper substantially, then a show cause notice for confirming the additional tax liability would be issued under Section 111. No such notice has also been issued. In absence of notice under Section 111, there cannot be a case for rejection of the declaration made by the appellant under VCES scheme. It is for the Revenue/designated authority to issue VCES scheme and failure to iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them. 6) I order the payment of applicable late fees i.e Rs 20000/ for each return not filed by them for the period half year ending March 2009 to half year ending March 2013 within the period prescribed by law." 2.1 Appellant is manufacturing excisable goods and is availing services of transport agency services for outward transportation of the goods manufactured by them. 2.2 During the course of audit, it was observed that the appellant had not paid the service tax due on the GTA services availed by them under reverse charge mechanism during the period April 2008 to March 2013. Appellant also had failed to take service tax registration and not filed the returns as required under law. 2.3 Accordingly a show cause notice dated 22.04.2014 by the Deputy Commissioner, Division VI, Service Tax-II, Mumbai was issued to the appellant asking them to show cause as to why:- "(a) Service tax amounting to Rs. 1,94,437/- (Rupees One lakh ninety four thousand four hundred thirty seven only-) not paid under the category of Transport of Goods by Road service for the period Octoboer,2008 to March,2013should not be demanded and recovered from them under the provisions of Section 73 (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax liability amounting to Rs.1,78,163/-. Their VCES-1 was duly acknowledged and accepted by the department and VCES-2 was issued to them. Thereafter they made the payment of the admitted tax liability as per challan dated 25.01.2014. They also intimated the facts about making the payment to the department. However, for some reason not known to the appellant, VCES-3 towards final settlement of dues was not issued to them. * For the period thereafter, January 2013 to March 2013, they paid the amount of service tax due along with interest on 25.01.2014. * A show cause notice was issued to them on 22.04.2014 demanding service tax amounting to Rs.1,94,437/- for the period October 2008 to March 2013 for this issue much after payment of the due amount as required either by making declaration under VCES or through challan along with interest. * Both the adjudicating authority and Commissioner (Appeals) have noted about the fact that the appellant had made the declaration under VCES-2 but the only reason for proceeding with the show cause notice is that VCES-3 which after completion of the change that begins with VCES-1 has not been issued to them. * For the remaining amount, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73, 73A) issued or made before 01-03-2013. (Section 106(1)] II. A person who has filed return, declared his true tax liability but not paid [106(1) proviso] If a SCN or order has been issued on any issue (say taxability or valuation), declaration cannot be filed on same issue for subsequent period [106 (1) proviso] III. Where any inquiry or investigation has been initiated and is pending as on 01.03.2013 by way of a) Search u/s 82 of FA 1994 b) Issue of summons u/s 14 of CEA 1944 c) Issue of notice requiring production of accounts or documents [Section 106(2)] IV. Where audit has been initiated. 11. It is seen from the records that, appellant has not completed VCES process. They failed to obtain VES-3 certificate, without the VCES-3 certificate scheme is not considered as completed. The appellant has opted VCES after initiation of audit. Therefore Condition No. IV of VCES for Persons not eligible for the scheme is - Where Audit has been initiated squarely apply in the case. The immunity under Section 108 of the Finance Act, 2013 that has been relied upon by the assessee would only come into play only when all conditions of VCES are satisfied. However, as already obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly after initiation of the audited records by the department. From this act, this is evident that if the audit was not initiated, the facts of evasion of service tax would not have been detected and appellant would have continued to evade service tax secretively and suppressed the material facts, therefore, service tax not paid is recoverable from them by invoking extended period as per proviso to section 73(1) of Finance Act, 1994. It also makes them liable for penalty under Section 78 ibid. In view of the above, I agree with the finding of the Adjudicating Authority that service tax of Rs. 1,94,437/- for the taxable services rendered by the appellant, is need to be recovered service tax from them. Held accordingly." 4.3 In terms of the provisions of Finance Act, 2013 by which VCES scheme has been introduced, which are reproduced below:- "106. Person who may make declaration of tax dues. - (1) Any person may declare his tax dues in respect of which no notice or an order of determination under section 72 or section 73 or section 73A of the Chapter has been issued or made before the 1st day of March, 2013 : Provided that any person who has furnished return under section 70 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in sub-section (3) and sub-section (4), any service tax which becomes due or payable by the declarant for the month of January, 2013 and subsequent months shall be paid by him in accordance with the provisions of the Chapter and accordingly, interest for delay in payment thereof, shall also be payable under the Chapter. (6) The declarant shall furnish to the designated authority details of payment made from time to time under this Scheme along with a copy of acknowledgement issued to him under sub-section (2). (7) On furnishing the details of full payment of declared tax dues and the interest, if any, payable under the proviso to sub-section (4), the designated authority shall issue an acknowledgement of discharge of such dues to the declarant in such form and in such manner as may be prescribed. 108. Immunity from penalty, interest and other proceeding. - (1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon payment of the tax dues declared by him under sub-section (1) of section 107 and the interest payable under the proviso to sub-section (4) thereof, shall get immunity from penalty, interest or any other proceeding under the Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST as has been held in the following decisions. * V S Enterprises [2017 (52) S.T.R. 151 (Tri. - Mumbai)] * Raj Infrastructure [2020 (34) G.S.T.L. 223 (Tri. - Mumbai)] * Siddhi Vinayaka Enterprises Pvt Ltd [2016 (43) STR 474 (T-Del)] The reliance placed on the decision of Hon'ble Madras High Court in the impugned order, is totally misplaced. It is not in dispute that if the audit/ investigation has been initiated then the declaration could not have been made or has to be rejected. In the present no proceedings for rejection of the declaration made has been initiated. 4.5 In absence of any such notice for rejection, it is but natural that appellant would act as per VCES-2 issued to him acknowledging the declaration. Appellant paid the declared liability and intimated the designated authority of the payment made. Even then the designated authority has not issued the settlement memo under Form VCES-3. Appellant cannot be faulted for the reason as stated in the impugned order. 4.6 Section 111 of the Finance Act, 2013 clearly provides that in case there is some liability or the declaration made is found to be improper substantially, then a show cause notice for confirming the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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