TMI Blog2017 (12) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... section 78. Moreover, the said order of imposing penalty has become final. Therefore, the petitioner is bound by the said order and findings recorded therein. Therefore, we cannot accept the submission that there was no penalty imposed which is covered by clause (i) of subsection 1 of section 32-O. There is an option available for the Settlement Commission either to reject the application or to proceed with the application. If subsection 5 of Section 32-F is considered, it is apparent that even after crossing the stage of subsection 1 of section 32-F, the Settlement Commission is empowered to reject the application. In fact, subsection 5 of section 32-F clearly indicates that the Commission may pass such order as it thinks fit on the matters covered by the applications. Section 32-O is a disqualification provided for entertaining an application for settlement. Therefore, the argument that after crossing the stage of subsection 1 of section 32-F, the application cannot be rejected on the basis of the bar created by section 32-O, cannot be accepted at all. In the fact of the present case, the impugned order itself records that that the applicants before the Settlement Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to the circular dated 8th August 2013 issued by the Central Board of Excise and Customs, New Delhi. He submitted that the clarification issued by the said circular applies to the service tax liability and the clarification is not confined to the Service Tax Voluntary Compliance Encouragement Scheme, 2013 (for short `the said Scheme'). He submitted that the clarification is that two separate branches are two distinct assessees for the purpose of service tax levy. Therefore, every branch or unit which is having a separate registration and which is issued show cause notice is entitled to take benefit of section 32-E. The submission is that the penalty of ₹ 1,50,000/is imposed on a different assessee which was a different branch of the petitionercompany. The second submission is that on plain reading of the bar created by section 32-O, it is applicable when there is an imposition of penalty on the ground of concealment of particulars of due liability. He invited our attention to the order dated 31st October 2014 as regards Coimbatore Branch of imposing penalty. He urged that in the show cause notice, penalty was claimed under sections 76, 77 and 78 of the Finance Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cal.). 4 We have given careful consideration to the submissions. As stated earlier, by virtue of section 83 of the Finance Act,1994, section 32-E of the Central Excise Act was made applicable to the payment of service tax. As stated earlier, there were 13 applications filed by the petitionercompany invoking section 32-E of the Central Excise Act which were the applications for settlement of case. Show cause notices were issued to the said 13 branches demanding service tax for a period from 1st January 2013 to 31st March 2014. On the issuance of said show cause notices that 13 separate applications were made. 5 The procedure to be followed on receipt of the applications under section 32-E is set out in section 32-F. What is relevant for our consideration is subsections 1 to 5 of section 32-F which read thus: SECTION 32-F. Procedure on receipt of an application under section 32-E. - (1)On receipt of an application under sub-section (1) of section 32-E, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant to explain in writing as to why the application made by him should be allowed to be proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner of Central Excise received under sub-section (3), and the report, if any, of the Commissioner (Investigation) of the Settlement Commission under sub-section (4), and after giving an opportunity to the applicant and to the Commissioner of Central Excise having jurisdiction to be heard, either in person orthrough a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under subsection (3) or sub-section (4). 6 Section 32-O reads thus: SECTION 32-O. Bar on subsequent application for settlement in certain cases. - [(1)] [Where, before the 1st day of June, 2007] - (i) an order of settlement passed under sub-section (7) of section 32-F provides for the imposition of a penalty on the person who made the application under section 32-E for settlement, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t admitted the nonpayment of Service Tax, on Club or Association Services' provided by them and paid the same along with interest before issue of Show Cause Notice. But for the investigation, the tax evasion would have gone undetected, and the applicant is, therefore liable for penal action. However, considering the cooperation, full and true disclosure of their liability, the Bench finds it fit to grant partial immunity from penalty. 9 Clause (iii) of the operative part of the said order reads thus: (iii) The Bench imposes a penalty of ₹ 1,50,000/( Rupees one lakh and fifty thousands only) on the applicant under the provisions invoked in the Show Cause Notice and grants immunity in excess of the penalty indicated herein. This amount should be paid by the applicant within 30 days of receipt of this order and proof of payment be furnished to Jurisdictional Commissioner. 10 Firstly, it was not necessary for the Settlement Commission to specifically mention under which section the penalty was imposed as the assessee was already put to notice that penalties under sections 76, 78 and 77 were proposed to be imposed. The finding recorded as quoted above is very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads thus: Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject: The Service Tax Voluntary Compliance Encouragement Scheme Clarifications regarding. The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect from 10.5.2013. Some of the issues raised with reference to the Scheme have been clarified by the Board vide Circular No.169/4/2013S. T., dated 13.5.2013 [2013 (30) S.T.R. (C17). Subsequently, references have been received by the Board seeking further clarifications as regards the scope and applicability of the Scheme. 14 Thus, the clarification issued by the said circular is as regards the provisions of the said Scheme. In fact, the circular has been issued on the basis of a reference seeking clarification as regards the scope and applicability of the said Scheme. Thus, the clarification issued by the Board is confined only to the scope and applicability of the said Scheme. The Said Scheme, as indicated by its name, is as regards voluntary compliance. Clause 106 of the said scheme reads thus: 106.(1) Any person may declare his tax dues in respect of which n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 1 of section 32-F, the Settlement Commission is empowered to reject the application. In fact, subsection 5 of section 32-F clearly indicates that the Commission may pass such order as it thinks fit on the matters covered by the applications. Section 32-O is a disqualification provided for entertaining an application for settlement. Therefore, the argument that after crossing the stage of subsection 1 of section 32-F, the application cannot be rejected on the basis of the bar created by section 32-O, cannot be accepted at all. As stated earlier, subsection 1 is only an enabling provision which permits the Settlement Commission to dismiss the application at initial stage. 17 That takes us to the decision of this Court in the case of Poona Tools Pvt. Ltd.(supra). Paragraphs 9 and 10 read thus: 9 In the present case, it would be pertinent to refer that there is no dispute about existence of the order passed by the Settlement Commission on 20th December 2012, to proceed with the application filed by the petitioners for settlement in respect of show cause notice dated 19th December 2012. It transpires that the Revenue/respondents had no objection for the admission of the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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