Yojana Infratech Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) first allowed miscellaneous applications seeking substitution of the respondent’s name and address in the cause title of the appeals from the Commissioner of Appeals-II, CGST & Central Excise, Mumbai, to the Commissioner of CGST and Central Excise, Mumbai Central.
The Tribunal noted that all the appeals involved an identical issue and therefore heard them together and disposed of them through a common order.
The dispute concerned the rejection of applications filed by the appellants under the Service Tax Voluntary Compliance Encouragement Scheme (VCES), 2013. The designated authority had rejected the declarations on the ground that inquiries were pending against the appellants as on 01.03.2013, rendering them ineligible under Section 106 of the Finance Act, 2013.
The Tribunal noted that the Assistant Commissioner, VCES Cell, Service Tax-III Commissionerate, Mumbai, had issued a letter dated 18.08.2015 informing various applicants that they were not eligible to make declarations under the VCES Scheme in terms of Section 106(2)(a) of the Finance Act, 2013. The Tribunal further observed that certain applicants named in that communication, namely M/s Raj Infrastructure, M/s Kamala Mills, and M/s Klarissa Property Developers Pvt. Ltd., had challenged similar rejection orders before the Tribunal. In those appeals, co-ordinate Benches had allowed the assessees’ appeals through Final Orders dated 22.03.2018, 17.04.2018, and 20.05.2022.
The Tribunal reproduced relevant portions of the order dated 17.04.2018, wherein it was observed that Section 106 of the Finance Act, 2013 required that the declarant should not have been subject to investigation or served with a notice as on 31.03.2013. The earlier order also referred to Circular No. 170/5/2013-S.T. dated 08.08.2013, which clarified that there was no bar on filing a declaration where an inquiry, investigation, or audit had been initiated after 01.03.2013. Reliance had also been placed on earlier Tribunal decisions.
The extracted findings further recorded that the show cause notice had been issued only on 18.08.2015, whereas the notice proposing rejection of the declaration was required to be issued within 30 days of filing the declaration. Since the competent authority had not complied with the conditions prescribed under the Scheme, the rejection of the declaration was held to be erroneous.
Applying the same reasoning to the present appeals, the Tribunal found that the show cause notices proposing rejection of the VCES declarations had been issued beyond the prescribed period of 30 days. Consequently, the Tribunal held that the notices were barred by limitation.
Accordingly, the Tribunal set aside the impugned orders rejecting the VCES applications and allowed all the appeals in favour of the appellants.
Cases Discussed
- M/s Klarissa Property Developers Pvt. Ltd., Final Order No. A/5488/2022-WZB dated 20.05.2022
- M/s Raj Infrastructure, Final Orders No. A/88474/2018-WZB dated 17.04.2018
- M/s Kamala Mills, Final Order No. A/86122/2017 dated 22.03.2018
- V.S. Enterprises v. Commissioner of Central Excise & Customs, Nagpur (CESTAT Mumbai), 2017 (52) S.T.R. 151 (Tri. – Mumbai)
- Siddhi Vinayaka Enterprises Pvt Ltd v. Commissioner of Service Tax, Raipur (CESTAT Delhi), 2016 (43) S.T.R. 474 (Tri.-Del.)
FULL TEXT OF THE CESTAT MUMBAI ORDER
These miscellaneous applications have been filed by the appellant for change of name and address of the respondent in the cause title to the appeal from “Commissioner of Appeals-II, CGST & Central Excise, Mumbai, 3rd Floor, Utpad Shulk Bhawan, Plot No. C-24, Sector-E, Bandra Kurla Complex, Bandra (East), Mumbai – 400051” to “Commissioner of CGST and Central Excise, Mumbai Central”, having address at “GST Bhawan, 3rd Floor, 115, Maharshi Karve Marg, Churchgate, Marine Lines, Mumbai —400051″. The prayer made by appellant is considered and accordingly, the miscellaneous applications are allowed. The said changed name and address of the respondents is being substituted in the cause title to these appeals.
2. Heard both sides and perused the case records.
3. The issue involved in these appeals is identical and accordingly, the same are taken up for hearing together and a common order is being passed.
4. Rejection of applications filed under the Service Tax Voluntary Compliance Scheme (VCES), 2013 is the subject matter of present dispute. The designated authority had rejected the applications on the ground that the inquiries were pending against the appellants as on 01.03.2013, making the applications ineligible under Section 106 of the Finance Act, 2013.
5. We find that the Assistant Commissioner, VCES Cell of Service Tax-III Commissionerate, Mumbai vide her letter dated 18.08.2015 had informed various applicants that they are not eligible to make declaration under VCES Scheme in terms of Section 106(2)(a) of the Finance Act, 2013. The said letter dated 18.08.2015 had referred to various companies, who had applied for settlement under the Scheme of 2013. In the said list, the applicants M/s Raj Infrastructure, M/s Kamala Mills and M/s Klarissa Property Developers Pvt. Ltd. had agitated the matter against rejection of their VCES applications and on appeal, the Co-ordinate Bench of the Tribunal vide Final Orders No. A/88474/2018-WZB dated 17.04.2018, No. A/86122/2017 dated 22.03.2018 and No. A/5488/2022-WZB dated 20.05.2022 had allowed the appeals filed by the assessees. The relevant paragraphs recorded in the order dated 17.04.2018 (supra) are quoted herein below: –
“2. After hearing the Learned Chartered Accountant for the appellant and Learned Authorised Representative, it would appear that the conditions enumerated in Section 106 of Finance Act, 2013 prescribe that the appellant should not have been subject to investigation or served with a notice as on 31st March 2013. It is seen that Circular No. 170/5/2013-S.T., dated 8th August, 2013 clarified that there was no bar on filing of declaration by an assessee against whom an inquiry, investigation or audit has been initiated after 1st March 2013. Learned Chartered Accountant also placed reliance on the decision of the Tribunal in Siddhi Vinayaka Enterprises Pvt Ltd v. Commissioner of Service Tax, Raipur -2016 (43) S.T.R. 474 (Tri.-Del.) and V.S. Enterprises v. Commissioner of Central Excise & Customs, Nagpur – 2017 (52) S.T.R. 151 (Tri. – Mumbai)].
3. It is seen from the records that the show cause notice was issued only on the 18th of August 2015 and that notice proposing rejection should have been issued within 30 days of the filing of the declaration. As the competent authority itself had not complied with the conditions prescribed in the scheme, the rejection of the declaration made is erroneous.”
6. In view of the fact that the show-cause notices in these appeals being issued beyond a period of 30 days, in proposing rejection of the VCES applications, the same are clearly barred by limitation of time. Therefore, the impugned orders passed against the appellants are set aside and the appeals are allowed in favour of the appellants.
(Dictated and pronounced in open court)
