By TIOL News Service

MUMBAI, APRIL 14, 2017: THE appellant had filed VCES declaration declaring liability of Rs.4,63,786/- on 29.10.2013.

However, Revenue informed them that their liability works out to Rs.14,64,374/- as that was the duty payable as on 01.03.2013. The appellant filed a revised declaration of Rs.11,69,927/- claiming that they were entitled to CENVAT Credit of Rs.2,94,448/- for the period prior to 01.03.2013.

The Commissioner, apparently,rejected the VCES declaration in view of section 111 of the Finance Act, 2013 and confirmed the demand as pointed out by the Revenue and imposed penalties.

In appeal before the CESTAT, the appellant submitted that on account of their entitlement to CENVAT credit of Rs.2,94,448/- their net liability on 01.03.2013 was only Rs.11,69,927/-.

Upon enquiry, the Bench was informed that the appellant was registered since long, however, they had never filed ST-3 returns nor disclosed liability of Service Tax.

After considering the submissions made, the CESTAT observed thus -

+ The appellant has not filed any ST-3 returns prior to 01.03.2013 nor they had paid any taxes till that date. The appellant, however, claimed to have been registered since long.

+ The claim of CENVAT Credit taken and/or utilized crystallizes only when the assessee files return before Revenue. The liability of the appellant as on 01.03.2013 was admittedly Rs.14,64,374/-, however, the appellant claimed that out of the same, Rs.2,94,448/- was available to them as CENVAT Credit and was used for payment of duty and, therefore, the net liability on them was only Rs. 11,69,927/-. I find that this claim is erroneous.

+ The liability of duty can be discharged either by payment in cash or by CENVAT Credit. CENVAT Credit can only be availed by filing the return, if no return is filed, it cannot be said that any liability was discharged. In the instant case, it is likely that the appellants may have availed input services on which credit of Rs.2,94,448/- might have been available to them. However, if the same is not taken by filing the return, it cannot be considered as CENVAT Credit.

+ Furthermore, any duty payment is to be reflected by way of filing the return. In absence of return, it cannot be said that any CENVATCredit which might have been available to them was actually paid to discharge any duty liability.

+ In these circumstances, it is apparent that the appellant's total duty liability was Rs.14,64,374/- and they have filed VCES declaration declaring the liability of Rs.11,69,927/- and thus, it is apparent that the appellant has not correctly declared his duty liability as on 01.03.2013 in the VCES declaration form.

+ In view of the above, since non-filing of returns are non-payment of taxes upto 01.03.2013 and failure to file proper and correct VCES declaration when opportunity was given to the appellant, the appeal cannot be allowed.

The appeal was dismissed.

(See 2017-TIOL-1249-CESTAT-MUM )