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2017 (1) TMI 1525 - AT - Service TaxVoluntary Compliance Encouragement Scheme, 2013 (VCES) - according to the Revenue, the VCES declaration of respondent is not maintained under Section 106 (2) of the VCES - Held that - Since proceedings have already been concluded vide order dated 19th October, 2016 in favour of the respondent, against which no appeal was preferred by the Revenue, the matter has attained finality. Therefore, present appeal filed against the impugned order date 6th September, 2017 cannot be maintained. Communication of letter - Held that - Section 37C of the Central Excise Act, 1944 mandates that in case of speed post, the proof of delivery of the letter has to be obtained by the sender - In this case, since no acknowledgement of proof of delivery of said letter has been produced by Revenue, it has to be construed that the letter dated 05.06.2012 has not been received by the respondent - the provisions of Section 106 (2) of VCES is not applicable for rejection of the declaration filed by the respondent. Appeal dismissed - decided against Revenue.
Issues:
1. Validity of the rejection of the Service Tax Voluntary Compliance Encouragement Scheme (VCES) application. 2. Entitlement to proceed with recovery of interest and penalties. 3. Compliance with communication requirements under Section 37C of the Central Excise Act, 1944. Analysis: Issue 1: Validity of the rejection of the VCES application The respondent had filed a VCES application for payment of Service Tax dues on rental income from immovable property. The Department issued a Show Cause Notice (SCN) proposing rejection of the VCES application under Section 106 (2) of the Finance Act, 1994, citing a letter from the Anti-evasion Wing. The Commissioner (Appeals) set aside the rejection and allowed the appeal. The Tribunal noted that a previous order had already concluded the matter in favor of the respondent, stating that proceedings for recovery of interest and penalty cannot proceed due to the demise of the taxpayer. The Tribunal also found that the Department failed to comply with the communication requirements of Section 37C of the Central Excise Act, 1944, as proof of delivery for the letter was not obtained. Consequently, the Tribunal dismissed the Revenue's appeal as the matter had attained finality, and the rejection of the VCES application was deemed invalid. Issue 2: Entitlement to proceed with recovery of interest and penalties The respondent's appeal was allowed previously, and no appeal was filed by the Revenue against that decision. As a result, the Tribunal held that the matter had attained finality, and further proceedings for recovery of interest and penalties could not be initiated. The Tribunal emphasized that since the taxpayer had passed away, proceedings against legal heirs for recovery were not permissible. Issue 3: Compliance with communication requirements under Section 37C The Tribunal highlighted the Department's failure to comply with Section 37C of the Central Excise Act, 1944, which mandates proof of delivery for communication via speed post. Since no acknowledgment or proof of delivery was provided, the Tribunal concluded that the letter in question had not been received by the respondent. This non-compliance was a crucial factor in determining the validity of the rejection of the VCES application. In conclusion, the Tribunal found no infirmity in the impugned order and dismissed the Revenue's appeal, emphasizing the finality of previous decisions, lack of compliance with communication requirements, and the inadmissibility of further recovery proceedings due to the demise of the taxpayer.
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