Sadguru Electricls Thr Its Prop. Mali Parmeshwar Rajendra 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 (VCES), 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. Consequently, all other provisions of the Act, except to the extent specifically excluded, would automatically apply to proceedings under the scheme. The Court found that the order passed by the Assistant Commissioner of Central Excise under the scheme is appealable under Section 85 of the Finance Act, 1994. The reasoning aligns with the observations of the Madras High Court, which stated that the remedy of appeal is a creation of statute and its absence in a scheme would grant uncontrolled and unquestionable powers to the authority. Therefore, the tribunal erred in dismissing the appeal on the ground of non-maintainability. The appeal was allowed, the impugned order of the tribunal was quashed and set aside, and the matter was remanded to the CESTAT to hear the appeal afresh on its merits.

Facts

The appellant, Sadguru Electricals, participated in the Voluntary Compliance Encouragement Scheme (VCES) and was issued a show cause notice for unpaid taxes. The adjudicating authority confirmed the demand, imposed a penalty under Section 73 of the Finance Act, 1994, and ordered recovery of the tax amount. The appellant appealed this order to the appellate tribunal on January 23, 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, did not provide for an appeal mechanism. This order of the tribunal is impugned before the High Court.

Key Issues

1. Whether the appeal against an order passed under the Voluntary Compliance Encouragement Scheme (VCES), 2013, is maintainable before the appellate tribunal, despite the scheme itself not explicitly providing for an appeal mechanism, under Section 85 of the Finance Act, 1994? Petitioner's Arguments: - The appellant argued that the tribunal's dismissal of the appeal on the ground that the VCES is a self-contained code without an appeal provision is unsustainable. - They contended that the basic Act itself provides for a remedy of appeal, and the absence of an appeal provision within the scheme should not preclude the appellant from seeking redressal. - 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 solely on the lack of a specific appeal provision within a scheme is unacceptable and grants unfettered power to the authority. Respondent's Arguments: - The respondent opposed the appeal. The judgment does not detail the specific arguments presented by the respondent, other than their general opposition.