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2018 (4) TMI 1834 - AT - Service TaxRejection of declaration made under the Voluntary Compliance Encouragement Scheme, 2013 - dispute in declaration of tax dues - application was rejected on the ground that, as on the date of declaration for the period from October 2007 to December 2012, in relation to construction of residential complex proceedings had been initiated on 1st March 2013 against them - HELD THAT - 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. 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. Appeal allowed - decided in favor of appellant.
Issues:
1. Rejection of declaration under the Voluntary Compliance Encouragement Scheme, 2013. 2. Conditions under Section 106 of Finance Act, 2013. 3. Compliance with notice issuance timeline under the scheme. Issue 1: Rejection of declaration under the Voluntary Compliance Encouragement Scheme, 2013: The dispute revolved around the rejection of a tax declaration amounting to &8377; 6,82,375 under the Voluntary Compliance Encouragement Scheme, 2013. The rejection was based on the initiation of proceedings against the appellant for the period from October 2007 to December 2012 related to the 'construction of residential complex'. The Commissioner of CGST & Central Excise (Appeals-II), Mumbai upheld the rejection, leading to the appeal. Issue 2: Conditions under Section 106 of Finance Act, 2013: The analysis focused on the conditions stipulated in Section 106 of the Finance Act, 2013, which mandated that the appellant should not have been under investigation or served with a notice as of 31st March 2013. Reference was made to Circular No. 170/5/2013-S.T., dated 8th August, 2013, which clarified that the initiation of an inquiry, investigation, or audit after 1st March 2013 did not bar an assessee from filing a declaration. The appellant's representative cited precedents like Siddhi Vinayaka Enterprises Pvt Ltd and V.S. Enterprises to support their argument. Issue 3: Compliance with notice issuance timeline under the scheme: The records revealed that the show cause notice proposing rejection was issued on the 18th of August 2015, exceeding the 30-day timeline for notice issuance after the declaration filing. The failure of the competent authority to adhere to the scheme's prescribed conditions regarding notice issuance rendered the rejection of the declaration erroneous. Consequently, the impugned order was set aside, and the appeal was allowed, emphasizing the importance of procedural compliance in such matters. *(Pronounced in open Court)*
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