The Hon’ble CESTAT in the case of Commissioner of Customs & Central Excise, Wardha v. Cityland Associates (2016) 69 taxmann.com 176 (Mumbai-CESTAT) held that where the assessee tried to make payment on due date and system showed code invalid, then, delay in payment due to such system fault can’t be attributed to the assessee.

In the given case, the respondent had applied for the VCES Scheme on 31/12/2013 and after obtaining the Service Tax registration, they attempted to deposit Service Tax 50% of the declared tax dues of Rs 32,98,972/- for the period October 2010 to December 2012. After making number of attempts on the website the transaction could not be completed and report shows “assessee code invalid”. Subsequently on 1/1/2014 the appellant deposited the required amount through two banks.

The Adjudicating authority vide letter dated 27/11/2014 communicated to the respondent that the respondent has not paid 50% due on or before the 31/12/2013, thus the respondent is not entitled for the benefit of VCES Scheme notified under Finance Act, 2013.

The Hon’ble CESTAT held that the respondent has scrupulously followed the procedure and complied with the condition i.e. applied for registration and attempted to deposit the amount on the due date i.e. 31/12/2013 but only due to system fault, the respondent could not deposit the amount which is beyond their control therefore in the peculiar facts of this case it can be constructed that there is no delay on the part of the respondent.