VERCHASKA INFOTECH PRIVATE LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner has challenged the notice dated 1 October 2013 issued by the Superintendent, Group X, Anti Evasion, Service Tax II, Mumbai (Respondent No. 2) under Section 87(b) of the Finance Act, 1994. By the impugned notice dated 1 October 2013, the Respondent No. 2 has directed the petitioner bankers viz. Respondent Nos. 5 to 8 banks not to allow any withdrawal from the account of the petitioner to the extent of Rs. 1.22 crores as the same is due to the revenue from the petitioner. It is the case of the petitioner that as pointed out in the letter dated 8 October 2013 to the Commissioner, Service Tax, Mumbai (Respondent No. 4) that the break up of the demand/arrears of service tax of Rs. 1.22 crores is as under:

(2.) LEARNED Counsel for the petitioner states that so far as dues payable up to 31 December 2012 is concerned they have already made an application for availing of the benefit of the Service Tax Voluntary Compliance Encouragement Scheme ("Scheme"). Further, under that scheme the petitioner's liability would be to pay only 50% of the outstanding liability by 31 December 2013. It is submitted that the entire amount of Rs. 31,96,971 is payable in respect of dues prior to 31 December 2012. Therefore, at this stage nothing is payable by the petitioner to the revenue subject to petitioner's application for availing of the benefit of the scheme being accepted by the revenue.

(3.) WE find that the entire basis of the demand for Rs. 1.22 crores is on the basis of the statement dated 25 September 2013 made by the petitioner's Director to the respondents. In the above statement while admitting the liability to Rs. 1.22 crores the petitioner has also pointed out that they have Cenvat credit of Rs. 60.40 lacs available. The aforesaid amount has been fully utilized in partly discharging the dues as is evident from the above table. At this stage we proceed on the basis that the amount of Rs. 60.40 lacs Cenvat credit has been properly taken as it forms a part of the same statement wherein the petitioner has admitted a liability of Rs. 1.22 crores. The exact quantum of Cenvat credit, if any, that the petitioner is entitled to would be a subject matter of adjudication or while determining settlement under the scheme. Therefore, we proceed on the basis that for the period prior to 31 December 2012 an amount of Rs. 32 lacs (approximately) is payable as service tax. If the application under the Scheme is accepted the petitioner would be liable to pay only Rs. 16 lacs (approximately) prior to 31 December 2013 and the balance amount thereafter. Therefore, for the present subject to the petitioner's application for settlement under the scheme being accepted, interest of justice would be served if the respondent -revenue are directed to vacate the attachment of the petitioner's bank accounts with Respondent Nos. 5 to 8 Banks on the petitioner depositing 50% of Rs. 16 lacs.