2026-VIL-1022-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Voluntary Compliance Encouragement Scheme - Time Limit for Issuance of Show Cause Notice - Appellant filed declaration under the VCES 2013, declaring unpaid service tax dues for a specified period - Designated authority issues a notice proposing rejection of the declaration beyond the prescribed time limit of thirty days stipulated in the Board Circular dated 25-11-2013 - Whether the SCN issued beyond the prescribed time limit can be acted upon to reject the voluntary compliance declaration filed by the assessee – HELD - The show cause notice is barred by time and cannot be acted upon. It is a settled position that the show cause notice is the foundation upon which the Department builds its case, and the tenability of any demand hinges on a valid SCN. The Circular dated 25-11-2013 expressly directs that the Commissioner shall ensure scrupulous compliance with the time limit of giving notice within thirty days. The term "give" implies actual service and receipt of the notice by the addressee, not merely its dispatch - Furthermore, the very nomenclature and underlying object of the scheme is to promote voluntary encouragement by the assessee and to reduce unnecessary litigation. The Circular also provides that the conditions enumerated in Section 106(2) of the Finance Act may be construed strictly and narrowly, and no declaration shall be rejected on frivolous grounds. The Revenue shall accept the declaration filed by the assessee - The impugned order is set aside and the appeal is allowed
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