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Shri B.R. Ajit (Managing Director) Versus Commissioner of Customs, Central Excise And Service Tax, Commissionerate, Cochin

2015 (9) TMI 736 - CESTAT BANGALORE

Rejection of declaration under VCES - Architect Services - Show Cause Notice had already been issued to the appellant - whether the date of the show Cause Notice or the date on which it was served on the parson, has to be taken into consideration for interpreting the provisions of Section 106 of the Act, which places an embargo to the effect, that no declaration shall be made for the tax dues where the notice has been issued to the person before 01.03.2013 - Held that:- as Section 106 of the Fin .....

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ne is disqualified as per the law, the notice/order must be put to the knowledge of the person. Any notice, which is merely 'issued' but not 'served' cannot be said to be within the knowledge of the person against whom it is 'issued' but not 'served'.

Since the Show Cause Notice No. 28/213-ST dated 22.02.2013 issued under Section 73 of the Finance Act, 1994 has not been served on the appellant before 01.03.2013, the impediment of Section 106 of the Finance Act, 2013 regarding non-fili .....

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r the Respondent : Shri A K Nigam, Addl. Commissioner (AR) ORDER Per S K Mohanty The issue that arises for consideration in this appeal is the rejection of declaration filed by the appellant is form VCES-I under Section 107(1) of the Finance Act, 2013. 1. Brief facts of the case are as under: 1.1. The appellant provides Architect Services and is registered with the Jurisdictional Service Tax Authorities. In respect of the period under dispute, the appellant opted for the Voluntary Compliance Enc .....

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ing rejection of the declaration, stating that the appellant is ineligible for the benefit under the said scheme, in terms of the Second Proviso to Section 106(1) of the Finance Act, 2013, for the reason that a Show Cause Notice No. 28/2013-ST dated 22.02.2013 had already been issued to the appellant, demanding service tax of ₹ 40,01,067/- for the period April 2009 to December 2011, and therefore, the appellant cannot avail the option of VCES. 1.3 The said notice dated 31.12.2013 was repli .....

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use Notices (dated 31.12.2013 and 17.01.2014) were adjudicated by the Assistant Commissioner vide Order-in-Original No. 12/2014-ST (VCES) dated 31.01.2014, holding that the declaration of tax dues, filed by the appellant attracted disqualifications envisaged in the main part, as well as those contained in the proviso to Section 106(1) of the Finance Act, 2013. The appeal filed against the adjudication order was disposed of by the Ld. Commissioner (Appeals), upholding the above order of the adjud .....

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n 73 of the Finance Act, 1994, which mandated that the notice has to be "served" on the person for recovery of the service tax not levied or paid, non-service of such notice within the stipulated time frame, cannot take away the substantive right of the appellant to avail the benefits under the VCES. Thus, according to the ld. Consultant, since the SCN was not received by the appellant before 01.03.2013, the benefits provided in the VCES cannot be denied to the appellant on the ground .....

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, that issuance of notice is sufficient compliance of service of notice. The appellant, therefore, is not entitled for the benefits of VCES, 2013 as per the embargo created in Section 106(1) of the Finance Act, 2013. In this context, the ld. DR relied on the Judgement of Hon'ble Calcutta High Court, delivered in the case of Union of India - Vs. Kanti Tarafdar, reported in [1997 (91) ELT 51 (Cal.). 4. Heard the learned counsel for both sides and perused the records. 5. The Commissioner (Appea .....

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be made of his tax dues on the same issue for any subsequent period". The appellant had contended that even though the show cause notice was issued to him on 22.02.2013, the same was not served on him before 1.03.2013 and therefore do not satisfy the condition in the second proviso to section 106(1), as the word, 'issued' has to be construed as 'served' in a contextual sense." 6. The Finance Minister had announced a Voluntary Compliance Encouragement scheme, 2013 (VCES) .....

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on who can make declaration of tax dues under the VCES is contained in Section 106 of the said Act. The relevant portion of Section 106 is extracted herein below: "106 (1) Any person may declare his tax dues in respect of which no notice or an order of determination under Section 72 or Section 73 or Section 73A of the Chapter has been issued or made before the 1st day of March, 2013. Provided that .................................................. Provided further that where a notice or an .....

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for the tax dues where the notice has been issued to the person before 01.03.2013. 8. It is an admitted fact on record that the Show Cause Notice No. 28/2013 ST dated 22.02.2013 issued under Section 73 of the Finance Act, 1994 has not been received by the appellant before 01.03.2013, Section 73 of the Act mandates that in cases, where any service tax has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve notice on the parson chargeable with se .....

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n whether issuance of notice would amount to receipt/service of notice', has already been settled by various decisions of the Tribunal as in the case of Corvine Chem & Pharmaceutical Ltd. -Vrs. - Commissioner of Central Excise, Chennai [2004 (170) ELT 181 (Tri.-Del.)], Sewing Systems (P) Ltd. -Vrs.- Collector of Customs [1992 (62) ELT 725 (Tri)] and Rashtriya Audyogic Sansthan - Vrs. Collector of Central Excise, Kanpur [2001 (135) ELT 353 (Tri.-Del.]. wherein it has been held that the re .....

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ided case, the issue involved was with regard to interpretation of the provisions of Section 110(2) of the Customs Act, 1962. The Hon'ble High Court upon consideration of the aim, object and scope of the statutory provision has held that if the notice is sent by registered post, the date of sending the notice should be the date of giving of notice as contemplated in Section 110(2) of the Act. While arriving at such conclusion, the Hon'ble Calcutta High Court vide paragraphs 24 and 25 in .....

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n wrongfully seized. The object has been stated by M.P. Menon, J., in C D Gonda Rao v. Additional Secretary, reported in 1982 (10) ELT 270, in relation to Section 79 of the Gold Control Act, which is similar to Section 110 of the Customs Act, as follows: "The purpose behind Section 79 is two-fold. The first is that confiscation shall be ordered without the concerned party being given a reasonable opportunity of having his say in the matter. The second is that the appropriate authority shoul .....

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. The intention for incorporating such an embargo in Section 106 of the Finance Act, 2013 is to dissuade persons against whom proceedings have been initiated, from taking the shelter of VCES. A person who wants to avail the option/benefit of VCES should not be disqualified to make a declaration as laid in the said provisions of law. To be able to decide whether one is disqualified as per the law, the notice/order must be put to the knowledge of the person. Any notice, which is merely 'issued .....

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