Klarissa Property Developers Private Limited Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
The appeal before the CESTAT Mumbai challenged the rejection of the appellant’s declaration under the Service Tax Voluntary Compliance Encouragement Scheme (VCES), 2013. The appellant had declared a service tax liability of ₹5,15,000 in respect of construction of a residential complex for the period from October 2007 to December 2012. The declaration was rejected on the ground that an enquiry initiated against the appellant before 01.03.2013 was pending and had proceeded through adjudication and appeal before the Commissioner (Appeals).
The appellant submitted that it was a sister concern of M/s. Kamla Mills Ltd., where the Tribunal had allowed a similar appeal on identical facts. It was further contended that no show cause notice was issued within 30 days as contemplated in the CBEC Circular. Instead, a personal hearing notice in Form VCES-1 was issued on 18.08.2015, about one and a half years after filing of the declaration. The appellant also argued that Section 111(2) of the Finance Act, 2013 prohibited action against an allegedly false declaration after expiry of one year from the date of the declaration, rendering the rejection order unsustainable.
The Department relied upon the decisions in Commissioner of Central Excise, Bolpur Vs. Ratan Melting & Wire Industries and M/s. Pandhe Constructions Pvt. Ltd. Vs. Commissioner of Central Excise, Pune-III. It was submitted that the CBEC Circular prescribing issuance of notice within 30 days could not override the statutory provisions, and that Section 106(2) entitled the designated authority to reject the declaration because an enquiry was pending.
