The Madras High Court has held that the amount excess paid in one case settled under Sabka Vishwas – (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), can be adjusted against the amount payable under SVLDRS in another case, when the demands are duplicated.
The bench of Justice R.Suresh Kumar and Justice C.Saravanan has observed that the amount that was paid prior to passing of the Order was eligible for being set off against the tax liability of the respondent under the Scheme for the period under dispute covered by the 2nd demand in Show Cause Notice as confirmed by the Order as there was an excess amount of Rs.15,18,561/- paid by the petitioner against demand comprised in Order.
As far as the amount demanded in the first Show Cause Notice and confirmed, the respondent/assessee had preferred an appeal before the Central Excise and Service Tax Appellate Tribunal and pre-deposited a sum of Rs.99,94,773 under Section 35F of the Central Excise Act, 1944 as made applicable to appeals under Finance Act, 1994.
As far as the amount demanded in the second mentioned Show Cause Notice and confirmed, the respondent/assessee had preferred an appeal before the Commissioner of Service Tax (Appeals).
The petitioner contended that the demand confirmed in Order was a duplication of a part of the demand already confirmed in Order. Therefore, the petitioner did not affect the statutory pre-deposit,
Meanwhile, the Sabkha Vishwas Legacy Disputes Resolution Scheme, 2019 came to be announced vide the Finance Act No.2 with effect from 21.08.2019. The assessee wanted to settle the dispute under Sabkha Vishwas Legacy Disputes Resolution Scheme, 2019 as against the demand confirmed. It is in this background, the assessee had filed an application to settle the dispute under the Sabkha Vishwas Legacy Disputes Resolution Scheme, 2019.
Under the scheme, the respondent was entitled to 50% abatement and thus, as against the tax demand of Rs.1,69,07,927/- confirmed vide Order in Original No.5/2013 dated 30.01.2013, for the period between December 2008 – January 2010. Thus, the respondent was required to deposit only Rs.84,76,212/- being 50% of the tax liability.
The amount that was paid prior to passing of the Order-in- Original No.48/2016 for a sum of Rs.99,94,773/- was eligible for being set off against the tax liability of the respondent under the Scheme for the period under dispute covered by the 2nd demand in Show Cause Notice as confirmed by the Order in Original No.48/2016 dated 14.10.2016 as there was an excess amount of Rs.15,18,561/- (Rs.99,94,773/- 84,76,212/-) paid by the petitioner against demand comprised in Order-in-Original No.48/2016 dated 14.10.2016.
The court held that sum of Rs.15,18,561 cannot be refunded back, it can be adjusted towards the amount payable under the scheme for the demand confirmed vide Order-in-Original No.48/2016 dated 14.10.2016 for the period mentioned in the second mentioned show cause notice which is the subject matter of the dispute.
Thus, the court held that the amount of Rs.15,80,561/- (Rs.99,94,773 – Rs.84,76,212) has to be adjusted towards liability of the respondent under SVLDRS Scheme 2019. Thus, out of the aforesaid amount of Rs.15,80,561/- (Rs.99,94,773 – Rs.84,76,212/-), a sum of Rs.8,75,075/- ought to have been adjusted. The balance of Rs.7,05,546/- [Rs.15,80,561/- (-) Rs.8,75,015/-] is however, not refundable back to the respondent in terms of proviso to Section 124(2) of the Act.
Case Details
Case Title: The Designated Committee under Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 Versus M/s.Navin Housing and Properties (P) Limited
Case No.: W.A.No.910 of 2020 and C.M.P.No.11205 of 2020
Date: 18.09.2024
Counsel For Petitioner: Senior Standing Counsel M.Revathi
Counsel For Respondent: Mr.G.Natarajan
