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2024 (12) TMI 358 - HC - Service TaxRejection of Declaration in Form SVLDRS-1 ARN LD3012190004307 dated 30 December 2019 filed by the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) - rejection on the ground that the redemption fine is not covered by the Scheme - HELD THAT - With respect to the above issue, the Co-ordinate Bench of this Court in the case of MESSRS. ESBEE ELECTROTECH LLP (FORMERLY KNOWN AS ESBEE INDUSTRIAL COMBINES) , MS. SAVITA CHORDIYA, MS. ABHA CHORDIYA, SOHAN CHORDIYA, SURESH CHORDIYA, VIJAY CHORDIYA, AJAY CHORDIYA, SHANTILAL CHORDIYA AND OJAS CHORDIYA VERSUS THE UNION OF INDIA, THE COMMISSIONER, CENTRAL GST CUSTOMS, PUNE-I, THE ADDITIONAL COMMISSIONER, CGST PUNE-I COMMISSIONERATE, THE ASSISTANT COMMISSIONER, CGST PUNE-I COMMISSIONERATE. 2024 (7) TMI 1516 - BOMBAY HIGH COURT has passed a detailed judgment holding that the redemption fine is akin to penalty and once the petitioner s application under SVLDR Scheme accepting the payment of excise duty is accepted, the declarant is immune from imposition of any redemption fine and, therefore the benefit of the scheme gets extended to the redemption fine also. The only ground on which the application was rejected was that the Scheme does not cover the redemption fine which as observed by us is contrary to the decision of this Court in the case of M/s. Esbee Electrotech LLP. It is settled position that the rejection order has to be tested on the touchstone of what is recorded in the said order and nothing can be added or subtracted therefrom or improvised either by way of reply (which in any case is not so in the present case) or by way of arguments. Therefore, this ground of rejection is bad in law. Petition disposed off.
Issues:
Challenge to rejection of Declaration under Sabka Vishwas Scheme Detailed Analysis: The petitioner challenged the rejection of their Declaration in Form SVLDRS-1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioner, engaged in manufacturing electrical products, faced show cause notices for confiscation of goods and imposition of penalties. The Sabka Vishwas Scheme was introduced to resolve pending disputes. The petitioner filed declarations under the scheme for both show cause notices. The first declaration was accepted, but the second was rejected on the grounds that redemption fine was not covered by the scheme. The main issue was whether the redemption fine was covered by the SVLDR Scheme. The petitioner argued that a previous court decision established that redemption fines were akin to penalties and should be covered by the scheme. The court referred to specific sections of the SVLDR Scheme and previous judgments to support this argument. The court emphasized that once the excise duty was paid as required by the scheme, the declarant was immune from further penalties, including redemption fines. The court rejected the respondents' argument that the redemption fine should be added to the excise duty demanded for calculation under the scheme. The court highlighted that the rejection of the petitioner's declaration solely based on the redemption fine not being covered by the scheme was against established legal principles. The court emphasized that the rejection order must be based on recorded reasons and cannot be supplemented by additional grounds not mentioned in the rejection communication or reply. Ultimately, the court allowed the petition, quashing the rejection of the petitioner's declaration and directing the respondents to accept the declaration under the Sabka Vishwas Scheme. The respondents were instructed to inform the petitioner of any payable amount under the declaration, and the petitioner was required to make the payment accordingly. The court ordered the issuance of a final certificate under the Scheme upon payment by the petitioner. In conclusion, the court's detailed analysis and reliance on legal provisions and previous judgments led to the acceptance of the petitioner's challenge against the rejection of their declaration under the Sabka Vishwas Scheme.
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