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2022 (12) TMI 1296 - CESTAT MUMBAIVCES scheme - Non-issuance of notice of rejection - Recovery of service tax alongwith interest and penalty - Non-payment of service tax due on the GTA services availed by them under reverse charge mechanism during the period April 2008 to March 2013 - failure to take service tax registration and failure to file returns as required under law - HELD THAT:- The VCES scheme has provided itself contents and has been explained by the Board in terms of various circulars issued. Once a declarant files a declaration admitting the tax liability for the period upto December 2012 in Form VCES-1, Revenue has to issue the acknowledgment in VCES-2 or reject the same by issuing a notice to the declarant. If no such rejection is done, the declarant proceeds to make the payment of the declared liability and intimates to the concerned designated authority who issues the final discharge certificate in Form VCES-3. In the present case it is not even the case of the Revenue that VCES declaration filed by the appellant has been rejected or even a notice for such rejection has been issued. It is settled law that the notice for rejection of the declaration has to be issued within thirty days as per Board Circular No 174/9/2013-ST. In absence of any such notice for rejection, it is but natural that appellant would act as per VCES-2 issued to him acknowledging the declaration. Appellant paid the declared liability and intimated the designated authority of the payment made. Even then the designated authority has not issued the settlement memo under Form VCES-3. Appellant cannot be faulted for the reason as stated in the impugned order. Section 111 of the Finance Act, 2013 clearly provides that in case there is some liability or the declaration made is found to be improper substantially, then a show cause notice for confirming the additional tax liability would be issued under Section 111. No such notice has also been issued. In absence of notice under Section 111, there cannot be a case for rejection of the declaration made by the appellant under VCES scheme. It is for the Revenue/designated authority to issue VCES scheme and failure to issue the same cannot be the ground for proceeding against the appellant. Revenue should set its record right. Demand made for the period January 2013 to March 2013 - HELD THAT:- The appellant paid the entire amount even prior to issuance of show cause notice. The benefit of Section 73(3) of the Finance Act, 1994 should have been extended to them by not issuing the show cause notice. As all amounts were paid prior to the issuance of show cause notice, the proceedings initiated cannot survive in terms of Section 73(3) of the Finance Act, 1994. Appeal allowed.
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