Page 107 - GSTL_18th June 2020_Vol 37_Part 3

2020 ] SURYA ENTERPRISES v. COMMISSIONER OF C. EX. & S.T., CHENNAI-III 321
DEPARTMENTAL CLARIFICATION CITED
C.B.E. & C. Circular No. 170/5/2013-S.T., dated 8-8-2013 ......................................................... [Paras 2.6, 7]
REPRESENTED BY : Ms. S. Sridevi, Advocate, for the Appellant.
Shri L. Nandakumar, AC (AR), for the Respondent.
[Order]. - Brief facts are that the appellant is engaged in providing Man-
power Supply and Recruitment Agency Services as well as Job Work Service.
They filed application under Voluntary Compliance Encouragement Scheme
[VCES, for short] dated 31-12-2013 declaring their total service tax as
Rs. 70,18,577/- for the period Apr., 2008 to Dec., 2012. The department rejected
the VCES application for the reason that audit was initiated as departmental in-
ternal audit team had visited the appellant’s Unit on 26-11-2013 and that VCES
application cannot be entertained in view of Section 106(2) of the Finance Act,
2013. Show cause notice was issued to the appellant proposing to reject VCES
application. After due process of law, the original authority confirmed the rejec-
tion, which was later upheld by Commissioner (Appeals). Hence this appeal.
2. On behalf of the appellant, the Learned Counsel Ms. S. Sridevi sub-
mitted that the department vide show cause notice, dated 29-1-2014 proposed to
reject the VCES declaration filed based on the basis of conditions as per provi-
sions of Sec. 106(2) of Finance Act.
2.1 The contention of the department is that on 3-9-2012, the depart-
ment sent a letter to the appellants intimating the intention of the department to
conduct audit in appellant’s Unit during the month of September, 2012, there-
fore, directed the appellants to keep all the records ready in order to facilitate the
audit. Though appellants received intimation from the department about the au-
dit to be conducted at their premises, departmental officers did not come for in-
spection or visit their premises to conduct the audit as intimated. On 28-12-2012,
the department issued a letter to the appellants, wherein, they have referred to
their previous communication, dated 3-9-2012 and their visit to appellant’s Unit
on 26-11-2012 and called for certain statutory records for completion of audit. On
16-1-2013, the department issued another letter/reminder-II, wherein, they re-
ferred to previous two letters and directed the appellants to submit the docu-
ments called for in the said letter.
2.2 Based on the above letters, the department has concluded that they
have initiated an audit against the appellants.
2.3 The appellants vide their letter, dated 24-3-2014 replied that “no
such audit was conducted by the department at their premises”. Further the ap-
pellant submitted that on 8-11-2012, his father Shri K.M. Govindaswamy died at
Bangalore, therefore, he was away from his office for 3 months and due to that,
his office was kept closed during that time and whenever there was a necessity
the Unit was opened. Therefore, the allegations in the above show cause notice
that audit was conducted at the business premises of the appellant is factually
wrong. Further, the department has merely relied upon the letter dated 23-1-
2014, in which the Additional Commissioner (Audit) informed the lower authori-
ty that audit of appellant’s premises has been conducted on 26-11-2012. Howev-
er, no copy of the same was served to the appellants despite several requests.
2.4 The appellant submits that no such audit took place on 26-11-2012.
The lower adjudicating authority and the lower appellate authority relied upon
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