2026-VIL-232-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Rejection of Service Tax Voluntary Compliance Encouragement Scheme (VCES) declaration - The Designated Authority rejected the declaration on grounds that the appellant had not paid 50% of the declared tax dues by 31.12.2013 as required under Section 107(3) of the Finance Act, 2013; and that the declaration was barred under the second proviso to Section 106(1) as the appellant had been issued a show cause notice and order for the same issue for an earlier period - Whether the Designated Authority had the power to reject the declaration for non-payment of 50% of the declared tax dues by 31.12.2013 – HELD - The Designated Authority had the inherent power to reject the declaration for non-compliance with the mandatory requirement of Section 107(3) to pay 50% of the declared tax dues by 31.12.2013. Where a power is conferred by a statute, it carries with it the power to do all such acts as are reasonably necessary for its execution – Further, the Scheme does not provide either the Revenue or the Declarant to amend or alter the time lines specified therein or the respective quantum of payment to be made, at their discretion. Therefore, these provisions have to be strictly interpreted, and the time limit specified in the Scheme have to be strictly adhered to by the declarant - The non-payment of fifty percent of the declared tax dues by the specified date of 31.12.2013 would in itself disentitle the appellant from availing the benefit of the VCES Scheme. The rejection of VCES declarations for non-payment of the 50% dues by the due date is upheld – The impugned order does not warrant any interference. The appeal is dismissed - Whether the declaration was barred under the second proviso to Section 106(1) of the Finance Act, 2013 – HELD - The appellant had been issued a show cause notice and order for non-payment of service tax on service charges for the period from January 2009 to June 2009. The declaration filed by the appellant under VCES was for the period from April 2010 to December 2012, which was a subsequent period to the one for which the earlier order was issued. Therefore, the declaration was rightly rejected by the Designated Authority under the second proviso to Section 106(1), which prohibits a declaration for a subsequent period on the same issue for which a notice or order has been issued.
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