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TMI Blog2019 (4) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... esignated authority under Section 107(1) of the 2013 Scheme on 30 December, 2013. Under Section 106 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 has been issued or made before the 1st day of March 2013. It, however, provides that where a notice or an order of determination has been issued to a person in respect of any period on any issue, no declaration shall be made of his tax dues on the same issue for any subsequent period. Section 111 deals with failure to make a true declaration. Sub-section (1) provides that where the Commissioner of Central Excise has reasons to believe that the declaration made by a declarant under the Scheme was substantially false, he may, for reasons to be recorded in writing serve notice on the declarant in respect of such declaration requiring him to show cause why he should not pay the tax dues not paid or short paid. Sub-section (2) provides that no action shall be taken under sub-section (1) after the expiry of one year from the date of declaration, while sub-section (3) provides that the show cause notice issued under sub-section (1) shall be deemed to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant would come under the category of "substantially false" declaration and, thus, liable to be rejected under Section 111(1) of the Act. Paragraph 12 and 14 of the Show Cause Notice dated 10 December, 2014 are reproduced : "12. In view of the above, the undersigned has reason to believe that the declaration made by the declarant under VCES, 2013 was substantially false and therefore liable to be rejected under Section 111(1) of the Finance Act, 2013. However, a show cause notice for recovery, appropriation of deposited amount (ST Rs. 89,43,093/- and interest Rs. 64,08,555/-) and proposing imposition of penalties has already been issued by the Additional Director General, DGCEI, Ahmedabad Zonal Unit, Ahmedabad vide F.No. DGCEI/AZU/36-98/2014-15 dated 04.07.2014 and therefore the same amount is not being demanded here again. Further, the Service tax (tax dues) of Rs. 45,72,716/- appears liable to be recovered from the declarant in terms of the provisions contained in the proviso to Section 73(1) of the Finance Act, 1994 in accordance with Section 111 of the Finance Act, 2013; however since the amount of tax of Rs. 45,72,716/- has already been paid by declarant under VCES, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to evade payment of tax dues; (v) Penalty should not be imposed upon them under the provisions of Section 76 of the Finance Act, 1994 read with Section 111 of the Finance Act, 2013 for non-payment of tax dues; (vi) Late fees for should not be recovered from them for not filing half yearly/quarterly service tax returns for the period Oct. 2007 to Dec., 2012 in terms of Rule 7C of the Service Tax Rules, 1994 read with Section 70 of the Finance Act, 1994." 6. A reply dated 16 February, 2015 was submitted by the appellant stating therein that though the appellant had declared the 'tax dues' payable under the head "Business Support Service" which was duly accepted by the Designated Authority and a discharge certificate was also issued under Section 107(7), of the Act but the Show Cause Notice dated 10 December 2014 did not indicate that there was any short payment or non payment of dues on the declaration so made. It was clarified that the service tax, if any, payable under "Banking and Financial Service" under reverse charge mechanism was not the subject matter of the opted declaration as the appellant was under a bona fide belief that no tax was payable under reverse charge mechani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from 08.04.2011 to 31.12.2012 and confirmed at (ii) above, under proviso to Section 78 of the Finance Act, 1994. However, if such service tax and the interest payable thereon determined above is paid within thirty days from the date of communication of this order, the amount of penalty liable to be paid by the assessee shall be twenty-five per cent of amount of service tax which pertain to the period from 08.04.2011 to 31.12.2012 and confirmed at (ii) above, in terms of proviso to Section 78 of the Finance Act, 1994; however, the benefit of reduced penalty shall be available only if the amount of penalties have also been paid with other dues within the period of said thirty days; (viii) I impose late fee of Rs. 1,04,000/- (Rs.2,000/- per return for the year 2010-11 and Rs. 20,000/- per return for the year 2011-12 onwards) for non filing of 07 Service Tax Returns for the period from April to Sep., 2010, Oct., 2010 to March, 2011, 01.04.2011 to 30.09.2011, 01.10.2011 to 31.03.2012, 01.04.2012 to 30.06.2012, 01.07.2012 to 30.09.2012 and 01.10.2012 to 31.03.2013 under the provisions of Section 70 of the Finance Act, 1994 read with Rule 7C of the Service Tax Rules, 1994 on the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission, learned Counsel placed reliance upon the provisions of the 2013 Scheme and in particular to the Second proviso to Section 106 and to the clarifications contained in the Circular dated 8 August 2013 (in particular to the issues contained at Serial Nos. 6, 8 and 15); (iii) In the alternative, learned Counsel submitted that the appellant was not required to pay any tax on the service classified as "Banking and Financial Services", in view of the decision of the Tribunal in J.M. Financial Services Private Limited and so, there was no necessity for the appellant to disclose this service in the declaration filed by the appellant on 30 December, 2013 under the 2013 Scheme; and (iv) In any view of the matter, the Show Cause Notice deserves to be set aside as no ground contained in Section 73 of the Act has been mentioned for demand of tax. 10. Shri R.K. Manjhi, learned Representative of the Department appearing has, however, supported the impugned order and has submitted: (i) That in view of the provisions of Rule 7 of the 2013 Rules, the appellant had necessarily to disclose "all" the tax dues in the declaration filed by him on 30 December, 2013 under the 2013 Scheme, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t paid the disclosed amount of service tax or any part thereof, shall not be eligible to make declaration for the period covered by the said return: Provided further that where a notice or an order of determination has been issued to a person in respect of any period on any issue, no declaration shall be made of his tax dues on the same issue for any subsequent period." 107. Procedure for making declaration and payment of tax dues.- (1) Subject to the provisions of this Scheme, a person may make a declaration to the designated authority on or before the 31st day of December, 2013 in such form and in such manner as may be prescribed. (2) The designated authority shall acknowledge the declaration in such form and in such manner as may be prescribed. (3) The declarant shall, on or before the 31st day of December, 2013, pay not less than fifty per cent. of the tax dues so declared under sub-section (1) and submit proof of such payment to the designated authority. (4) The tax dues or part thereof remaining to be paid after the payment made under sub-section (3) shall be paid by the declarant on or before the 30th day of June, 2014: Provided that where the declarant fails to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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." 14. "Tax dues" dues have been defined in Section 105(e) of the Act to mean the service tax due or payable under the Chapter for the period beginning from 1 October 2007 and ending on 31 December 2012 but not paid as on 1st day of March, 2013. The second proviso to Section 106 is important and throws light on the submissions made by the learned Counsel for the appellant. While sub section (1) of Section 106 provides that 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 73 has been issued or made before 1 March 2013, the second proviso stipulates that where a notice or an order of determination has been issued to any person in respect of any period on any issue, no declaration shall be made of a tax dues on the same issue for any subsequent period. It thus permits any person to make a declaration in regard to an issue not covered by the notice or an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declaration made by the appellant on 30 December 2013 in regard to "Business Support Service". The Show cause notice, however, proceeds on the footing that the appellant failed to disclose the services in regard to "Banking and Financial Services.'. 19. The representative of the Department has, however, placed reliance upon Rule 7 of the 2013 Rules to contend that a declarant has necessarily to make a declaration in respect of "all tax dues". In this connection, reliance has been placed on Rule of 4 of the Rules, that provides that "the declaration under sub-section (1) of section 107 of the Act in respect of tax dues under the Scheme shall be made in Form VCES-1." Form VCES-I, referred to in Rule 4 is reproduced below : FORM VCES-1 [In duplicate] Declaration under sub section (1) of section 107 of the Act. (Please read the instructions carefully before filling the form) 1. Name of the declarant 2. Address of the declarant & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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