In a recent case, the Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) allowed immunity from penalty under section 108(1) of the Companies Act 2013 Act as declaration filed by appellant under VCES stands allowed.
M/s. Shankar Construction Company filed the appeal against the order-in-original. The Government of India had announced the Scheme under Chapter V and VA of the Finance Act, 1994, being the Service Tax Voluntary Compliance Encouragement Scheme, 2015 2. The controversy is related to the declaration/application filed by the appellant under VCES on 31.12.2013 declaring the tax dues as Rs.21,25,776/- for the period 2008-2009 to December, 2012 under Section 107(1) of the Finance Act, 2013 3 read with Rule 4 of the VCES to avail the benefit of the Scheme.
In terms of clause 3 of Section 107 of the 2013 Act, which required that the declarant shall pay not less than 50% of the tax dues on or before 31.12.2013, the appellant paid 50% of the tax of Rs.10,62,890/- within the said period. The remaining amount including interest of Rs.11,58,550/- was deposited within the prescribed time as per Clause 4 of Section 107.
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Under Clause 7 of Section 107 on furnishing the details of full payment of declared tax dues and the interest, the Designated Authority is required to issue an acknowledgement of discharge of such dues to the declarant.
Since the appellant had paid the complete tax dues with interest within the prescribed time limit under the Scheme and the necessary acknowledgement has been issued by the Designated Authority accepting the application, the appellant was entitled to immunity from penalty, interest or any other proceedings under the Chapter in terms of Section 108(1) of the 2013 Act.
The Allahabad Bench of this Tribunal in the case of M/s.Goenka Motors (P) Ltd. Vs. Commissioner of Central Excise & Service Tax, Allahabad wherein in similar circumstances, the tax dues were paid by the
assessee under Section 107, it was concluded that neither the demand under Section 111 of the Finance Act, 2013 nor the demand under Section 73 of the Finance Act, 1994 was maintainable in view of the immunity granted to the appellant by the provisions of sub-section (1) of Section 108 of the Finance Act, 2013 and accordingly, the order-in-original impugned therein was set aside and the appeal was allowed.
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A two member bench of Binu Tamta, Member (Judicial) and Hemambika R. Priya, Member (Judicial) held that the declaration filed by the appellant under VCES stands allowed. Hence, the impugned order is set aside. The appeal is, allowed accordingly.
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