TMI Blog2020 (4) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... f determination had been issued to the petitioner in respect of any period on any issue prior to the Scheme. The amendment in the Finance Act, 2012 did not introduce service tax on intermediary or insurance intermediary service for the first time. It was liable to tax all along in terms of section 65(105)(zl) of the Finance Act, 1994 w.e.f. 01.05.2006 prior to that the service - In fact, the case of the petitioner that it was exempt from payment of tax in terms of Export of Service Rules, 2005 was rejected by the Tribunal vide Final Order No.1278/08 dated 17.11.2008 and by Commissioner of Central Excise vide Order in Original No. 19/2010 dated 03.11.2010. Thus, for the earlier period also, the petitioner has been held liable to pay tax for up for the normal period of limitation. Mere change in the provisions in the Finance Act, 1994 vide Finance Act, 2013 did not alter the nature of levy of service tax on the services provided by the petitioner. Even according to the Department, the petitioner was not exempted from payment of service tax under the provisions of the Export of Service Rules, 2005. For the period after 01.07.2012, Rule 9(c) of the Place of Provisional Rules, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.2012, the petitioner availed the benefit of the Service Tax Voluntary Compliance Encouragement Scheme announced vide the Finance Act, 2013. However, before the Finance Act, 2013 was enacted, the petitioner deposited a sum of ₹ 43,19,603/- on 09.04.2013 and the balance amount of ₹ 3,97,566/- on 05.06.2013. 7. The petitioner thereafter filed a declaration in Form VCES-1 in terms of Service Tax Voluntary Compliance Encouragement Scheme, 2013 on 26.07.2013 to settle the case by declaring tax dues for the period commencing from July 2012 to December 2012. Form VCES-2 was acknowledged on 30.07.2013 by the respondent. The petitioner was thereafter issued with a Show Cause Notice dated 14.08.2013 by the Designated Authority. The petitioner replied to the same on 11.11.2013, which has culminated in the impugned order rejecting the petitioner's application. The petitioner stated that it had incurred service liability for the period 1.07.2012 to 31.12.2012 in terms of Rule 9(c) of the Place of Provision of Service Rules, 2012, which became effective from 01.07.2012. The show cause notices and the orders-in-original referred to in Paragraph 2.0 of the Show Cause had nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 407 (Calcutta) , wherein, the decision of the Delhi High Court has been distinguished. The learned counsel for the respondent also submitted that the payment were made prior to the enactment of the Finance Act, 2013, the aforesaid payment cannot be considered for the purpose of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 in the light of the clarification of Central Board Excise and Customs (CBEC) in circular No.170/58/2013-ST, dated 08.08.2013. 12. I have heard the learned counsel for the petitioner and the learned Standing Counsel for the respondent. I have also perused the provisions of the Finance Act, 2013, in terms of which the Service Tax Voluntary Compliance Encouragement Scheme, 2013 was announced. 13. From the facts disclosed by the petitioner, it is noticed that the petitioner has issued with six different periodical Show Cause Notices for the period commencing from 16.07.2001 to September 2011 as detailed below:- Sl.No. SCN No. Date Period Service Tax demanded (Rs.) From To 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Act, 1944, as made applicable to the Chapter under Section 83 thereof: or (1 of 1944) (iii) requiring production of accounts, documents or other evidence under the Chapter or the rules made thereunder; or (b) an audit has been initiated, and such inquiry, investigation or audit is pending as on the 1st day of March, 2013, then, the designated authority shall, by an order, and for reasons to be recorded in writing, reject such declaration. 15. During the Budget speech on 28.02.2013 when the Finance Bill 2013 was introduced, the Finance Minister has stated the reasons for providing for such a Scheme in the Finance Bill. Paragraph 183 of the Budget speech is re-produced below: 183. While there are nearly 17,00,000/- registered assessees under service tax, only about 7,00,000/- file returns. Many have simply stopped filing returns. We cannot go after each of them. I have to motivate them to file returns and pay the tax dues. Hence, I propose to introduce a one-time scheme called 'Voluntary Compliance Encouragement Scheme'. A defaulter may avail of the scheme on condition that he files a truthful declaration of service tax dues since 01.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The case has also been adjudicated by the Commissioner of Service Tax vide Order-in- Original No.2/2007 dated 31.01.2007, wherein, the demand of ₹ 1,42,44,880/- was confirmed. This issue is now pending before the Hon'ble Supreme Court. 19. Similarly, vide Order in Original No.19/2010 dated 03.11.2010, the Commissioner has confirmed the demand for the period between December 07 to December 08. On the date of the writ petition, an appeal against the said order was said to be pending before the CESTAT while rest of the show cause notices were pending adjudication and were awaiting the order of the Honourable Supreme Court. 20. The Finance Act, 1994 was completely overhauled in the Finance Act, 2012. For the first time, the definition of expression service was introduced in Section 65B(44) of the Finance Act, 1994. Thus, any activity carried out by any person for another consideration was service liable to tax under Section 66B of the Finance Act, 1994. It included, declared service enumerated in Section 66E of the Finance Act, 1994. 21. Under these circumstances, service of every description was liable to tax except those which fell within the purview of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to avail the benefit of the Scheme in the light of 2nd proviso to Section 106 of the Finance Act, 2013. Further, the scheme under the Finance Act, 2013 is not available to an assessee who has filed returns under Section 70 of the Finance Act, 1994, but had failed to pay tax. 27. It is evident that a person like the petitioner were not in the contemplation of the Service Tax Voluntary Compliance Encouragement Scheme, 2013. Since the petitioner was not eligible to the aforesaid scheme, the denial of the benefit of aforesaid scheme in the light of the clarification of the Central Board of Excise and Customs, New Delhi vide clarification dated 13.05.2013 bearing reference Circular No.169/4/2013-S.T is not relevant. 28. Thus, it is clear that the Service Tax Voluntary Compliance Scheme, 2013, is not intended for a person like the petitioner. 29. The decision of the Gujarat High Court in Sadguru Construction Co. Vs. Union of India, (2015) 81 VST 95 (Guj) referred by the learned counsel for the petitioner, did not deal with the situation contemplated under Section 106(1) and 2nd proviso to Section 106(1) of the Finance Act, 2013. The said decision has merely dealt with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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