The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that penalty on co-noticee not sustainable when case of main noticee is settled under Sabka Vishwas – (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS 2019).
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that once the duty demand case is settled under SVLDRS 2019, as per Scheme itself, there is a waiver of penalties on the main assessee against whom the demand was confirmed as well as on other co-noticees.
Table of Contents
Background
The issue involved in the present case is that when the case of main appellant involved demand of duty interest and penalty has been settled under SVLDRS-2019 whether the penalty on co-noticees can be continued or otherwise?
The appellant/assessee submitted that now it is a settled law that when the main case of demand of duty is settled under SVLDRS 2019, the penalty on the co-noticee will not sustain.
Case Laws
Anil K Modani vide Final Order No. A/87176-87178/2023 dated 30.11.23
The scheme is all about „tax dues‟ which itself has been set out in section 123 of Finance Act, 2019 with all the alternatives restricting themselves to the total amount of duty or total amount of duty in dispute, as the case may be. Furthermore, section 124 of Finance Act, 2019 specifies relief as percentage of „tax dues‟ and of late fee/penalty should those be the only detriments contemplated in a proceeding. It would, therefore, appear that a person imposed with penalty would be eligible to be „declarant‟ subject to there being no demand of tax pending in the impugned proceedings.
Subhash Panchal vide Final Order No. 11014 of 2024 dated 08.05.2024
The main party’s case of M/s. Atlas Plastics has been settled under SVLDRS 2019 and this Tribunal has disposed of appeal vide order No. 12602/2023 dated 07.11.2023 in the light of the settlement of the case of main party, hence the personal penalty of appellant be set aside. It is also submitted that the appellant has not played any role for evasion of duty by M/s. Atlas Plastics.
Conclusion
The tribunal held that the penalties imposed on the co-noticees in a case where the main noticee against whom the demand is confirmed, the case is settled under SVLDRS then in respect of other co-noticees penalty will not sustain even if they have not filed a declaration under SVLDRS-2019.
Case Details
Case Title: Prakash Steelage Ltd. Versus C.C.E.& S.T. Bharuch
Case No.: Excise Appeal No. 10911 of 2017- DB
Date: 06.11.2024
Counsel For Appellant: P.K. Shetty
Counsel For Respondent: R.K. Agarwal
