[2016] 70 taxmann.com 276 (Mumbai – CESTAT) Global Networking Recourses vs. Principal Commissioner, Service Tax, Pune

Facts
The Appellant filed VCES declaration, however failed to pay 50% of the declared liability before 31/12/2013 and a small portion was paid on 02/01/2014. The designated authority issued show cause notice proposing rejection of VCES declaration on the ground of non-payment of requisite 50% amount before due date. The Appellant contended that due to system error this balance amount could not be deposited and also produced snap shot, bank website as a token of proof of their attempt to make payment on 31/12/2013 and prayed that since it is beyond the control of the Appellant, delay if any, occurred should be condoned.

He further contended that no show cause notice within one month of the filing of declaration as clarified by Circular No. 170/05/2013-ST dated 08/08/2013 was issued.

Held
Hon’ble Tribunal noted that the Appellant had admittedly not paid entire 50% of the total dues declared by them on or before 31/12/2013 and have also shown reason for non-payment of part of the said amount before that date. However it held that even if the reason given is accepted, there is no provision in the scheme to condone the delay in payment and therefore time line prescribed under the scheme cannot be extended in absence of any provision for condoning the delay. As regards issue of show cause notice, the Tribunal observed that issuance of show cause notice referred to in the circular is with reference to section 106(2) which provides that if any deficiency or error is found in the declaration filed under the said section, notice is required to be issued, whereas in case of failure to deposit of an amount as provided under 107 there is no provision for issuance of any notice. Therefore, even the notice given to the Appellant was also not required for rejecting declaration. Accordingly, appeal was dismissed.

(Note: Readers may note a contrary decision of the same bench in the case of Commissioner of Customs & Central Excise Vs. Cityland Associates [2016] 69 taxmann.com 176 (Mumbai- CESTAT ) reported in the BCAJ July 2016 issue wherein the same bench held that delay in payment due to system fault cannot be attributed to assessee and the declaration was held as valid.