TMI Blog2018 (7) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... initiation of the proceedings under Section 73 of the Finance Act vis-āvis the service tax short paid or not paid. The show cause notice issued under Section 73 cannot be faulted on this account - it may be seen that the investigations in the present case have been started on 8.1.2013 whereas the VCES scheme has come into operation only from 10.5.2013. Thus, when the proceedings have already been initiated before the VCES scheme, the show cause notice for short payment would have been issued only in terms of Section 73 of the Finance Act, 1994. The recovery was to be initiated in terms of Chapter V of the Finance Act, 1994 and adjudged accordingly. From the construct of Section 106 to Section 111 of Finance Act, 2013, it is clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the Service Tax was payable till the date of payment on the amount detailed in para 14 above under the provisions of Section 75 of the Finance Act, 1994. d) I order for appropriation of interest of ₹ 15,35,354/- paid by the notice against the demand of interest in (c) above. e) I impose penalty of ₹ 81,64,644/- (Rupees Eighty One Lakhs Sixty Four Thousand Six Hundred Forty Four only) on the notice under the provisions of Section 78 of the Finance Act, 1994. f) I impose penalty of ₹ 10,000/- (Rupees Ten Thousand only) under the provisions of Section 77 of the Finance Act, 1994. g) I impose late fees for the delayed filing of ST- 3 Returns under the provisions of Section 70 of the Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Finance Act, 1994. The ground for challenge is since they have made the declaration under VCES scheme and also a certificate under VCES scheme has been issued to them, the proceedings could have been initiated against them only in terms of Section 111 of the Finance Act, 2013 and not under Section 73 of the Finance Act, 1994. 4. We have heard Shri Vasant Bhat, learned Chartered Accountant arguing on behalf of the appellant. Learned C.A. submitted that no doubt that there was certain short payment of service tax during the relevant period. To take care of such payment, the Government has announced VCES scheme for the purpose of giving an opportunity to such tax payers who would intend to make good the same and discharge the tax li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ES is the opportunity for such persons to pay the tax dues and come clean. On payment of tax dues relating to the period under VCES, there will be a complete waiver of interest, penalty and other consequences. 4.2 In the present case, they have come forward and made the declaration under the provisions of the scheme and have also been issued a certificate by the Competent Authority towards the discharge of the tax liability. 4.3 Arguing further, learned C.A. stated that VCES is a complete scheme and provided for a self-contained mechanism for making the demand. Section 111 of the Finance Act, 2013 clearly provided that in all cases where declaration under VCES is made, a notice should have been issued for any short payment unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of declaration. (3) The show cause notice issued under sub-section (1) shall be deemed to have been issued under section 73, or as the case may be, under section 73A of the Chapter and the provisions of the Chapter shall accordingly apply. In terms of Section 111(3), it is a fact that any notice issued under the provisions of this section is deemed notice under Section 73 of the Finance Act, 1994. If that be so, this section does not bar initiation of the proceedings under Section 73 of the Finance Act vis- vis the service tax short paid or not paid. The show cause notice issued under Section 73 cannot be faulted on this account. 7. Further, it may be seen that the investigations in the present case have been started on 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to value or with reference to applicable tax rate, entitlement for abatement etc., and the declaration passes the text laid down under Section 106 Section 111 of Finance Act, 2013 by being not substantially false; the declaration made need to be accepted and immunity granted. However, if the department intends to raise any additional demand, they can issue show cause notice for such additional demand in terms of Section 73 of Finance Act, 1994. Similar view has been expressed by Hon ble Madras High Court in case of V.R. Mohanraj vs. Commissioner of Service Tax I (W.P. No.34481 of 2015, order dated 20.4.2016). 10. In view of above, there is no merit in the submissions made by learned C.A. and hence cannot be accepted. 11. Since the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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