Raj Electrical Engineering Works Thr Its Prop. Natha Limbaji Dawkare vs. The Commissioner Customs, Central Excise And Service Tax, (Now The Comm. Of CGST And C.E.Comm. Abad

Held

The Court held that the Voluntary Compliance Encouragement Scheme, 2013, introduced by the Central Government under Section 114 of the Finance Act, 2013, is not a self-contained code but is to be construed as a part and parcel of Chapter V of the Finance Act, 1994, in view of Section 105 of the Finance Act, 2013. Therefore, all other provisions of the Act, except to the extent specifically excluded, would automatically apply to proceedings under the scheme. Consequently, an order passed by the Assistant Commissioner of Central Excise under the scheme is appealable under Section 85 of the Act, 1994. The Court agreed with the views expressed by the Madras High Court and the Punjab & Haryana High Court. The reasoning was that a statute creating a remedy of appeal is intended to provide recourse to aggrieved parties, and the absence of an appeal provision within a specific scheme should not render an authority's order final and unquestionable, thereby granting uncontrolled power. The impugned order of the tribunal was quashed and set aside, and the tribunal was directed to hear the appeal afresh on its merits.

Facts

The appellant, Raj Electrical Engineering Works, participated in the Voluntary Compliance Encouragement Scheme (VCES) and received a notice for unpaid taxes. The adjudicating authority confirmed the demand and imposed a penalty under Section 73 of the Finance Act, 1994. The appellant filed an appeal before the appellate tribunal on January 19, 2016. The tribunal, by an order dated September 22, 2017, dismissed the appeal, holding it was not maintainable as the VCES, being a self-contained code, lacked specific appeal provisions. This order is the subject of the present appeal before the High Court.

Key Issues

1. Whether the appeal filed before the appellate tribunal against an order passed under the Voluntary Compliance Encouragement Scheme (VCES), 2013, is maintainable despite the scheme not explicitly containing appeal provisions, considering the scheme is part of the Finance Act, 1994. Petitioner's arguments: The appellant contended that the tribunal erred in dismissing the appeal solely on the ground that the VCES scheme itself did not contain an appeal provision. They argued that the Finance Act, 1994, provides for appeals, and the scheme, being part of the Act, should be subject to these general appeal provisions. Reliance was placed on the judgments of the Madras High Court in Narasimha Mills Pvt. Ltd. vs. Commissioner of C.Ex.(Appeals), Coimbatore and the Punjab & Haryana High Court in Barnala Builders & Property Consultants vs. Dy. C.C.E. & S.T. Dera Bassi, which held that dismissing an appeal on the absence of a specific appeal provision within a scheme is unsustainable and grants unfettered power to the authority. Respondent's arguments: The respondent opposed the appeal.