Rejection Order under VCES is appealable

Sharing with you an important judgement of the Hon’ble Punjab & Haryana High Court in the case of M/s Barnala Builders and Property Consultants Versus the Deputy Commissioner of Central Excise & Service Tax, Derra Bassi Division on the following issue:

 Issue:

Whether the Order passed by Revenue under Service Tax Voluntary Compliance Encouragement Scheme, 2013 (“VCES” or “the Scheme”) is appealable?

Facts & Background:

M/s Barnala Builders and Property Consultants (“the Petitioner”) filed a civil writ petition No. 26929 of 2013 before the Hon’ble Punjab & Haryana High Court (“the High Court”) against the Order passed by the Deputy Commissioner of Central Excise and Service Tax under the Scheme.

The Central Board of Excise & Customs (“the CBEC”) vide its Circular 170/5/2013-ST dated August 8, 2013 (“the Circular”) had clarified that the Scheme has no provision of appeal against the rejection of declaration, relevant extract of the Circular is reproduced hereunder:
 

13

What is the appeal mechanism against the order of the designated authority whereby he rejects the declaration under section 106 (2) of the Finance Act, 2013?

The Scheme does not have a statutory provision for filing of appeal against the order for rejection of declaration under section 106 (2) by the designated authority.

The issue before the High Court was whether the Order passed by the Deputy Commissioner of Central Excise and Service Tax under the Scheme is appealable or not.

Held:

The High Court has held that the Order passed under the Scheme is appealable. It was held that VCES is part and parcel of Finance Act, 1994 by virtue of amendment made by the Finance Bill, 2013 (“the Finance Act”) and all the provisions of the Finance Act are applicable to the Scheme except to the extent specifically excluded. Accordingly, the Circular issued by the CBEC is not correct in law and the Order passed by the Deputy Commissioner of Central Excise and Service Tax is appealable in accordance with the provisions of the Finance Act.

Contributed By:

Bimal Jain
FCA, FCS, LLB, B.Com (Hons)