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TMI Blog2023 (8) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... S declaration on 27.12.2013 declaring their tax dues as Rs. 1,17,98,160/- for the period 01.04.2012 to 31.12.2012, on account of Rental Services, PLC and Transfer Charges, Residential Construction Services, Commercial Construction Services and Services under reverse charge. The 50% of the declared tax was deposited by the appellant before 31.12.2013 and the remaining was deposited within the prescribed period. 3. The Designated Authority issued the show cause notice dated 24.01.2014 to the effect that an enquiry against the company was initiated by Anti Evasion Branch of the Commissionerate and the same is pending as on 01.03.2013 and therefore it appears that under Section 106 of the Finance Act, 2013 they are not eligible to file the declaration under VCES. The Designated Authority vide order dated 20.01.2016 rejected the declaration, inter-alia observing as under:- "However, it is seen that as part of the investigation, the Department had asked for documents and moreover a visit under Rule 5A of Service Tax Rules was made by the Department on 18.02.2013 in this regard. Thus, it is seen that as on 01.03.2013 there was an enquiry pending against M/s JMD Limited which was not of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in respect of which no notice or order of determination under Section 72, 73 or 73A has been issued before 01.03.2013. Clause (2) of Section 106 provides for rejection of such a declaration in the eventualities specified therein and sub-clause (a) thereof provides where an enquiry or investigation in respect of service tax not levied or not paid or short levied or short paid has been initiated and which is pending as on 01.03.2013. In view of certain references seeking clarification as regards the scope and applicability of the Scheme, Circular No. 169/4/2013-ST dated 13.05.2013 was issued. The relevant para of the said Circular concerning the issues at hand is given below:- What is the scope of Section 106(2)(a)(iii)? Whether a communication from department seeking general information from the declarant would lead to invoking of section 106 (2)(a)(iii) for rejection of declaration under the said section? Section 106(2)(a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 106(2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidences are requisitioned by the authorised officer from the declarant under the authority of a statutory provision. A communication of the nature as mentioned in the previous column would not attract the provision of section 106(2)(a) even though the authority of section 14 of the Central Excise Act may have been quoted therein. 12. Whether declarant will be given an opportunity to be heard and explain his cases before the rejection of a declaration under section 106(2) by the designated authority? Yes. In terms of section 106(2) of the Finance Act, 2013, the designated authority shall, by an order, and for reasons to be recorded in writing, reject a declaration if any inquiry/ investigation or audit was pending against the declarant as on the cutoff date, i.e., 1.3.2013. An order under this section shall be passed following the principles of natural justice. To allay any apprehension of undue delays and uncertainty, it is clarified that the designated authority, if he has reasons to believe that the declaration is covered by section 106(2), shall give a notice of intention to reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty, benefit of VCES would be eligible in respect of 'tax dues' concerning any other issue in respect of which no inquiry or investigation was pending as on 1.3.2013. It is also reiterated that the designated authority, if he has reasons to believe that the declaration is covered by section 106(2), shall give a notice of intention to reject the declaration within 30 days of the date of filing of the declaration stating such reasons to reject the declaration. Commissioners should ensure that this time line is followed scrupulously. 3 Whether benefit of VCES would be available in cases were documents like balance sheet, profit and loss account etc. are called for by department in the inquiries of roving nature, while quoting authority of section 14 of the Central Excise Act in a routine manner. The designated authority/ Commissioner concerned may take a view on merit, taking into account that facts and circumstances of each cases as to whether the inquiry is of roving nature or whether the provision of section 106(2) are attracted in such cases. 10. In order to ascertain whether the enquiry / investigation on the basis of which the declaration of the appellant has been rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant and on a perusal of the orders of the Commissioner and the Tribunal as also the relevant Circulars and the communication of the DGCEI dated 19.2.2013, it appears that there is no scope for interference with the order of the Tribunal in this appeal. The Board Circular, dated 25.11.2013 clarifies that in cases where the documents like the balance-sheets, profit and loss account etc., are called for, by the Department in the enquiries of roving nature, while quoting the authority of Section 14 of the Central Excise Act in a routine manner, the Commissioner concerned would be entitled to take a view on merit, taking into account the facts and circumstances of each case, as to whether the enquiry is of roving nature or whether the provisions of Section 106(2) of the Act are attracted to such cases. It appears on a reading of the communication served by the DGCEI on the respondent - assessee, dated 19.2.2013, by making a reference to Section 14 of the Central Excise Act that the respondent -assessee was asked to send to the office of the DGCEI the copies of the balance-sheets for the financial years 2008-09 to 2011-12, a copy of the agreement/ work order of each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t annexed by the appellant, the said notice was received by him on 03.02.2014, which is beyond the period of thirty days. The circular dated 08.08.2013 in the clarification stated that the designated authority shall give a notice of intention to reject the declaration within thirty days of the date of filing of the declaration. The giving of notice does not mean mere issuance of the notice and therefore the date of issue of the show cause notice would not be relevant for computing the period of thirty days. The very term 'give' implies in simple terms to allow someone to have or to provide someone something so unless and until the person to whom it has been issued receive the notice the service of notice shall not be complete, the observation of the Apex Court in MCD vs. Dharma Properties (P) Ltd., (2018) 11 SCC 230, resolve the controversy in following terms:- "14. Section 444 prescribes the manner in which notices, etc. are required to be served or issued. The High Court has rightly pointed out that four eventualities are contemplated in Section 444(1). However, the expression "give" does not find mention in any of those eventualities. Mandate of Section 126 is "giving of a no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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