The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the denial of benefit of the Voluntary Compliance Encouragement Scheme (VCES), 2013 of service tax on the ground of violation of section 106 of the Finance Act,2013.  Archna Traders, the appellant assessee applied for the VCES Scheme, however, the benefit of the VCES Scheme was denied to him invoking Section 106 of the Finance Act.

The assessee appealed against the order passed by the Commissioner (Appeals) for denying the benefit of the VCES scheme filed by the assessee.  S J Vyas, the counsel for the assessee contended that an instant case inquiry was initiated against Adani, and a summon was issued to the assessee there was no inquiry against the assessee and the inquiry was only against Adani and therefore invocation of Section 106 of the Finance Act to deny the benefit of VCES Scheme was incorrect.

Himanshu P. Shrimali, the counsel for the department relied on the decisions made by the lower authorities and contended that the denial of the benefits of the VCES scheme was as per the law and liable to be sustained.  The Bench observed that the summon was issued to the assessee on 28.03.2012 much before the cut-off date of 01 March 2013 and subsequently a demand show cause notice was issued to the assessee in the same proceedings which was initiated by said summons.  A single-member bench comprising Raju (Technical) held that the assesee was rightly held ineligible for the scheme and upheld the denial of the VCES scheme.