2023 (1) TMI 1140 - AT - Service Tax

Refund - Excess amount deposited SVLDRS as Voluntary Disclosure Scheme - grievance of appellant is that the tax dues which were already paid by the appellant have not been adjusted by the designated authority - HELD THAT - It is observed from the record of this appeal that this bench gave an opportunity to the appellant to submit Forms SVLDRS 1 to 4 so as to prove that he raised his disagreement before the designated authority but the appellant has filed SVLDRS-1, 3 and 4. SVLDRS- 2/SVLDRS-2B has not been placed on record. It becomes clear that appellant has failed to prove its disagreement to the amount quantified as payable by the designated authority. The disagreement has been the main contention of appellant s argument, same stands totally unproved. Otherwise also, it being a case of voluntary disclosure, the appellant had to self assesse the payable amount in SVLDRS-1. The self declaration form has also not been produced by the appellant. Rejection of refund in terms of Section 124(2) and 130 of Finance Act, 2019 - HELD THAT - Since the tax liability for the period in question is actually either 70% or 50% higher than the amount estimated as payable under the scheme, any deposit prior payment of such estimated amount is made nonrefundable. In case of voluntary disclosure also it is an uncalculated amount as per tax payers choice which is declared and paid by the appellant. The liability of tax payer in such case is much more than what used to be mentioned in SVLDRS-1 under Voluntary Disclosure. Hence, there is no applicability of article 265 of the Constitution of India as is impressed upon by the appellant - there are no justifiable reason for ordering refund of the amount which was paid over and above the payable amount as estimated by the designated committee. Appeal dismissed.

Summary

Issues:
Refund claim rejection under SVLDRS scheme; Applicability of Section 124(2) and 130 of Finance Act, 2019 for refund denial.

Analysis:
The appellant, a service tax registrant, filed a refund claim under the SVLDRS scheme, seeking a refund of Rs.6,59,022. The claim was rejected by the department, stating that the appellant's tax liability was determined at Rs.32,03,701, which was paid by the appellant. The appellant argued that the excess payment should be refunded as it was beyond the payable liability. The appellant relied on a High Court decision to support their claim. However, the department contended that under the SVLDRS scheme, once the tax liability is paid, there is no provision for a refund. The department cited Section 130 of the Finance Act, 2019, which prohibits the refund of any pre-deposit or other deposit already paid. The tribunal analyzed the scheme's provisions, emphasizing that the scheme aims for a one-time settlement of past disputes and voluntary disclosures, with no provision for refunds once the declared duty is paid. The tribunal noted that the appellant failed to prove disagreement with the designated authority's quantification of payable amount, which was crucial for refund consideration. The tribunal upheld the order rejecting the refund claim, citing the non-refundable nature of payments made under the SVLDRS scheme as per Section 130 of the Finance Act, 2019.

In conclusion, the tribunal dismissed the appeal, affirming the order rejecting the refund claim under the SVLDRS scheme. The tribunal upheld the department's decision based on the provisions of Section 130 of the Finance Act, 2019, which deem any amount paid under the scheme as non-refundable once the tax liability is settled. The tribunal emphasized the scheme's objective of final settlement without provisions for refunds and the appellant's failure to substantiate their disagreement with the designated authority's calculations. The tribunal's decision aligned with the scheme's intent to provide a one-time resolution for tax disputes and voluntary disclosures, preventing refunds of payments made under the scheme.