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2015 (11) TMI 170 - HC - Service TaxDenial of benefit of VCES - Denial on the groud that the amount paid towards interest and penalty cannot be adjusted towards liability of tax dues under the Scheme - Section 107(4) - whether in the facts and circumstances of the present case, the petitioner can be said to have paid the entire tax dues declared amounting to ₹ 20,63,597/- so as to be entitled to the benefit of the VCE Scheme as contended by the petitioner or whether the petitioner has failed to pay the said amount, inasmuch as, the amount of ₹ 6,36,103/- had initially been paid towards the interest and penalty and hence, cannot be considered as payment under the scheme, as contended by the revenue. Held that:- It was after the introduction of the Scheme, that the petitioner in ignorance of the Scheme paid the amount payable towards service tax, penalty and interest in relation to four revenue paras. At that point of time, the respondent authorities did not draw the attention of the petitioner to the fact that it could avail of the benefit of the Scheme. However, well within the time limit prescribed under the Scheme, the petitioner in due compliance with the provisions of the section 107 of the Act, submitted a declaration under sub-section (1) thereof and paid more than fifty per cent of the tax dues before 31st December, 2013 as required under sub-section (3) thereof and in order to comply with the provisions of sub-section (4), viz. payment of the remaining amount, requested for adjustment of an amount of ₹ 6,36,103/- paid under the wrong accounting code of interest and penalty to the correct code of service tax, which request was duly acceded to by the respondent authorities and such correction was made before 30th May, 2014. When the entire amount as contemplated under the Scheme stood paid before the due date and the petitioner satisfied all other requirements under the Scheme, the respondents are not justified in denying the benefit of the Scheme to the petitioner only on the ground that the amount of ₹ 6,36,103/- had initially been paid towards the interest and penalty. The impugned communication/order which seeks to deny the benefit of the Scheme to the petitioner under such hyper technical plea, therefore, cannot be sustained. - Decided in favour of assessee.
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