ST - Once issue has been decided by Tribunal in favour of appellant, same cannot be reopened by any of the authorities below: CESTAT
By TIOL News Service
MUMBAI, MAR 07, 2019: THE Voluntary Compliance Encouragement Scheme (VCES), 2013 came into effect w.e.f. 10.05.2013.
The appellant filed a VCES-1 declaration and indicated therein that have paid their dues on 02.05.2013, a date prior to the coming into operation of the VCES scheme.
SCN was issued on 25.11.2013 for rejection of declaration under the said scheme and ultimately the issue was settled by Tribunal vide its order dated 29.12.2017. The Tribunal followed the decision of the Gujarat High Court in the case of Sadguru Construction Company - 2014-TIOL-630-HC-AHM-ST and held that the appellant's declaration under VCES Scheme needs to be accepted. The SCN dated 25.11.2013 was quashed and set aside.
In the meantime, what followed the SCN (seeking rejection of the VCES declaration) was a notice 24.10.2014 demanding the amount of service tax of Rs.5,10,920/- with interest and penalty and also seeking appropriation of the amount of Rs.5,10,920/- deposited by the appellant on 02.05.2013 on the ground that the said amount was deposited by the Appellant prior to the coming into force of the VCES Scheme.
The demand was confirmed by the lower authorities along with imposition of penalty and interest and, therefore, appellant is before the CESTAT again.
The appellant submitted that they had informed the Commissioner(A) that the appeal pertaining to rejection of declaration under the VCES Scheme was pending before the Tribunal and a request was made for awaiting the outcome of the same. However, the Commissioner(A) rejected this submission by taking a stand that an appeal (against the rejection of VCES declaration) was not maintainable before the CESTAT. Accordingly, the impugned order was passed on 16.03.2018 although the Tribunal order had been pronounced by then (on 29.12.2017).
The CESTAT considered the submissions and after perusing the Tribunal order dated 29.12.2017 observed that the ground of non-maintainability of appeal was not at all argued anywhere by the revenue in that Appeal proceeding (ST/86978/2014).
It was, therefore, held -
"5. Once the issue has been decided by the Tribunal in favour of appellant it can't be reopened by any of the authorities below. The Commissioner has erred in recording the finding on the admissibility of the declaration filed by the appellant under the VCES Scheme. Nothing has been produced on record nor it is the case of revenue that the aforesaid order dated 29.12.2017 has been challenged by the revenue in appeal. Unless the order dated 29.12.2017 of the tribunal is set aside or stayed in appeal by the Hon'ble High Court, the Commissioner has no authority or power to comment upon the jurisdiction of the tribunal. He has to follow it. The present issue is arising out of the rejection of declaration filed by the appellant under the VCES scheme. Rejection of declaration under VCES Scheme is the foundation of the present dispute and the Department is demanding service tax of Rs.5,10,920/- with interest and penalty, only due to the rejection of declaration made by the Appellant. Now since the declaration made by the Appellant under the VCES Scheme has been upheld by the Tribunal vide order dated 29.12.2017 and since the said order has not been challenged by the Revenue anywhere, therefore the show cause-cum-demand notice dated 24.10.2014 cannot survive…"
In fine, the impugned order was set aside and the appeal was allowed with consequential reliefs.
(See 2019-TIOL-712-CESTAT-MUM)
