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TMI Blog2023 (3) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Finance Act, 1994, the liability to pay service tax arose under the Finance Act, 1994, the show cause notice dated 17 April 2017 demanding the interest amount of Rs.2,78,90,766/- was issued to Petitioner under Section 75 of the Finance Act, 1994, which clearly stated that Petitioner had failed to pay minimum 50% of the declared tax dues on or before 31 December 2013 as required under the provisions of Section 107(3) of the Finance Act, 1994. There is, therefore, no doubt that the liability of the Petitioner had arisen under the Finance Act, 1994 which enactment finds mention under Section 122 of the said Act. Therefore, the ground for rejection of Petitioner s second application that the VCES does not find mention as an enactment under Section 122 would therefore not survive. Coming to the observation of the Designated Authority that amount of duties having been paid, there is no duty pending recovery under the indirect tax enactments, we have already noted that in the facts of the case, the show cause notice demanding the interest amount was issued to Petitioner under Section 75 of the Finance Act, 1994 and which related to the service tax dues, which have admittedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry Compliance Encouragement Scheme, 2013 (for short the VCES ) was introduced by Chapter VI of the Finance Act, 2013. Pursuant to Section 106(1) of the VCES, a person could declare his tax dues for the period 1 October 2007 to 31 December 2012 and upon payment of service tax, there would be immunity from interest and penalty. 4. Petitioner filed Form VCES-1 on 2 July 2013 wherein the Petitioner showed an amount of Rs.3,41,82,926/- as service tax liability for the period October 2007 to March 2011. It is the case of Petitioner that although service tax on renting out of immovable property was effective from 1 June 2007, the period from 1 June 2007 to 30 September 2007 was outside the VCES as the said Scheme covered the period only from 1 October 2007. It is submitted that the amount of rent and tax relating to the period from 1 June 2007 to 30 September 2007 was erroneously shown by the Petitioner as tax dues for the period 1 October 2007 to 31 March 2008 in the declaration dated 2 July 2013 made by the Petitioner. 5. That on account of the above error, tax liability of Rs.31,25,815/- relating to the period from 1 June 2007 to 30 September 2007 was also erroneously included i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Section 107(3) of the Finance Act, 1994, therefore, there was a clear breach of the VCES, 2013 by the Petitioner. The Petitioner filed reply to the show cause notice vide letter dated 29 May 2017 refuting the allegations and contending that no tax dues were payable as tax of Rs.3,10,57,111/- was already paid on 30 June 2014. 11. On 25 June 2018, the Commissioner, CGST CX, Mumbai South passed an Order-in-Original confirming the entire demand of interest proposed in the show cause notice and dropped the personal penalty under Section 78A on the Director of the Petitioner. 12. Being aggrieved by the Order-in-Original, Petitioner filed an Appeal before the Appellate Tribunal and as on the date of the Petition, it is stated that the Appeal was pending before the Appellate Tribunal. 13. Around August 2019, the Finance (No.2) Act, 2019 introduced the SVLDR scheme for settlement of legacy disputes relating to central excise and service tax matters on payment of certain specified percentage of tax dues by the declarants. 14. Mr. Sridharan, learned Counsel for Petitioner would submit that the Petitioner filed two applications under the SVLDR scheme seeking to settle the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashing and setting aside order of the Designated Committee made under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 thereby directing the Respondents, to treat the application filed by the Petitioners under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 as valid application. (b) that this Hon ble Court be pleased to treat the application filed by the Petitioner under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 valid and accept the payment already made as sufficient compliance of the scheme and direct the Respondents to issue Discharge certificate in Form SVLDRS-4. (c) that in the alternate this Hon ble Court be pleased to accept the application No. LD1511190000229 in Form SVLDRS-1 dated 15.11.2019 filed under the category Appeal Pending and direct the Respondents to issue Discharge certificate in Form SVLDRS-4 in such application. 19. Mr. Sridharan, learned Counsel for the Petitioner submits that the main issue is whether the amounts demanded against the Petitioner are dues under the Finance Act, 1994 or not. 20. Mr. Sridharan would submit that VCES is an amnesty / settlement scheme and does not contain any charging Sections imposin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neligibility as set out in the remarks column is usefully quoted as under : 1. The definition of arrears under Section 121(c) covers the case. Reason for disagreement : Section 122 clearly says that scheme applies only to enactments specified therein. VCES 2013 is not an enactment specified therein. Further the order is defined under Section 121(o) which talks about order of determination under indirect tax enactments in relation to show cause notice issued under such indirect tax enactments. VCES 2013 is not an indirect tax enactment specified under Section 122. Therefore the order passed by the authority with reference to VCES is beyond the scope of he scheme. Moreover as agreed by you in personal hearing, the amount of duties stands paid by you, therefore as on the date of filing of declaration there is no amount of duty which is pending recovery under indirect tax enactments, for this reason also your case does not fall under arrears category. 2.VCES scheme is part and parcel of Finance Act, 1994 and for this proposition you had relied upon Para 18 of Hon ble Madras High Court judgment in the case of Narasimha Mills Pvt. Ltd. Reasons for disagreement : The judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Importance ) Act, 1957; (viii) the Mineral Products (Additional Duties of Excise and Customs ) Act, 1958; (ix) the Sugar (Special Excise Duty) Act, 1959; (x) the Textiles Committee Act, 1963; (xi) the Produce Cess Act, 1966; (xii) the Limestone a nd Dolomite Miners Labour Welfare Fund Act, 1972; (xiii) the Coal Mines (Conservation and Development) Act, 1974; (xiv) the Oil Industry (Development) Act,1974; (xv) The Tobacco Cess Act, 1975; (xvi) The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Cess Act, 1976; (xvii) the Bidi Workers Welfare Cess Act, 1976; (xviii) the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978; (xix) the Sugar Cess Act, 1982; (xx) the Jute Manufacturers Cess Act, 1983; (xxi) the Agricultural and Processed Food Products Export Cess Act, 1985; (xxii) the Species Cess Act, 1986; (xxiii) the Finance Act, 2004; (xxiv) the Finance Act, 2007; (xxv) the Finance Act, 2015; (xxvi) the Finance Act, 2016; (c) any other Act, as the Central Government may, by notification in the Official Gazette, specify. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Central Board of Excise and Customs, for the simple reason that after incorporation of the Service Tax Voluntary Compliance Encouragement Scheme into the Finance Act, all other provisions of the Act except to the extent specifically excluded, apply to proceedings under the scheme. The impugned order passed by the Deputy Commissioner of Central Excise and Service Tax would necessarily be appealable under Section 86 of the Indian Finance Act, 1994..... (emphasis supplied) 33. We have also had an occasion to peruse the decision of the Punjab and Haryana High Court in the case of M/s. Barnala Builders Property Consultant vs. The Deputy Commissioner of Central Excise Service Tax, Dera Bhassi and Others (supra) and observe that the Punjab and Haryana High Court has opined that VCES is incorporated in the Indian Finance Act, 1994 by virtue of Indian Finance Act, 2013 and all other provisions of the said Act would apply except to the extent specifically excluded. 34. It is, therefore, clear from the above that VCES is part and parcel of the Finance Act, 1994, a statute which finds mention in Section 122 of the said Act. As can be seen from the facts of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed vs. Commr. Of C. Ex. (Appeals), Coimbatore (supra) appears to be erroneous. 36. Coming to the observation of the Designated Authority that amount of duties having been paid, there is no duty pending recovery under the indirect tax enactments, we have already noted that in the facts of the case, the show cause notice demanding the interest amount was issued to Petitioner under Section 75 of the Finance Act, 1994 and which related to the service tax dues, which have admittedly been paid by Petitioner. Just because the Petitioner has paid the principal amount, it cannot be said that when a show cause notice has been issued for interest on the said amount, that the Petitioner is not entitled to make a declaration under SVLDRS. The interest relates to the service tax amount and the SVLDR Scheme covers not only tax but also interest, penalty. Infact, Section 129 of the SVLDR Scheme which provides for discharge certificate makes the certificate conclusive inter alia with respect to the liability to pay any further duty, interest or penalty with respect to the matter and time period covered in the declaration. The demand for interest under the show cause was clearly with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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