CESTAT Chennai Quashes Rejection Of BPL Telecom's VCES Declaration As Notice Was Delayed

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the rejection of a Voluntary Compliance Encouragement Scheme (VCES) declaration filed by BPL Telecom Pvt. Ltd.

The tribunal found that the notice proposing rejection was issued beyond the prescribed time limit. It also found that the departmental correspondence relied upon by the Revenue was merely general in nature.

A bench of Technical Member Vasa Seshagiri Rao and Judicial Member Ajayan T.V. held that the show cause notice proposing rejection of the declaration had been issued beyond the period prescribed in the departmental circulars governing the scheme.

"It is seen that the Department's Circular No. 170/5/2013-S.T., dated 8-8-2013, at Sl.No.12, categorically clarifies that for declarations already filed, the said period of 30 days would apply from the date of this circular. Therefore, even if we were to take the date of issuance of the Circular, the fact remains that the SCN is issued beyond the prescribed time limit specified therein." the tribunal observed.

The appellant filed a VCES declaration on July 5, 2013. It declared service tax dues of ₹20.53 lakh for the period from December 2010 to December 2012.

The department subsequently issued a show cause notice proposing rejection of the declaration. According to the department, an investigation against the appellant was pending as on March 1, 2013. It also relied on an earlier show cause notice issued for a previous period on the issue of non-payment of service tax.

The appellant argued that the rejection notice itself was time-barred. It further contended that the communications relied upon by the department merely sought documents and information and did not amount to a disqualifying inquiry or investigation under the scheme.

After examining the record, the Tribunal noted that the declaration had been filed on July 5, 2013. The show cause notice proposing rejection was issued only on October 3, 2013.

The Tribunal further found that the correspondence referred to in the notice was general in nature. Referring to its earlier decision in *JMD Ltd. v. CCE, New Delhi*, it held that the appellant's case was covered by that ruling.

"Moreover, the details of the correspondence indicated in the SCN also reveal that they are very general in nature. We are therefore of the considered view that the decision in JMD Ltd v CCE, New Delhi, (2024) 14 Centax 138 (Tri-Del), as noticed above, would squarely apply in the appellant's favour." the Tribunal observed.

"In light of our aforesaid discussion and decisions of the Tribunal noticed above, we are of the considered view that the impugned order is liable to be set aside." the tribunal held.

The tribunal accordingly set aside the impugned order and allowed the appeal with consequential reliefs.