2024 (12) TMI 469 - HC - Service Tax

Challenge to impugned order (SVLDRS FORM 3) dated 27 January 2022 on the ground that it requires the petitioner to pay an additional amount - serious misstatement in the Declaration Form (SVLDRS 1) - Calculation and deduction of pre-deposit or deposit under Section 124(2) of the Scheme - HELD THAT - In terms of Section 124 (2), the relief calculated under sub-section (1) shall be subject to the condition that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant. Provided that if the amount of pre-deposit or deposit already paid by the declarant exceeds the amount payable by the declarant, as indicated in the statement issued by the designated committee, the declarant shall not be entitled to any refund. The findings recorded in the impugned order on the date of the petitioner has used CENVAT Credit for payment of output service tax liability have not been disproved by the petitioner. It is also important to note that in the Service Tax Return in Part-D dealing with service tax paid in cash and through CENVAT Credit, against every month, the assessee has shown in D-1 as having made payment in cash. Similarly, every month (2016-17), the petitioner in D-2 stated how much CENVAT Credit they had utilised to pay the service tax - Insofar as cash payment is concerned, the petitioner and respondent accept that it was paid before 11 December 2018. Still, regarding CENVAT Credit from the return itself, the petitioner is now disputing the month and year in which the CENVAT Credit was used to make the payment. The petitioner has not shown any legal provision or document to prove that the CENVAT Credit was utilised after 2018. The easiest and only way for the petitioner was to produce the relevant documents, which would have dislodged the respondent's contention in the impugned order. Still, the petitioner has failed to do so - The findings in the impugned order are based on the verification done by the authorities of the respondents based on the documents submitted by the petitioner and the said findings not having been disproved by the petitioner by proving contrary, there are no reason for this Court to interfere in the present proceedings. No credible material supports the Petitioner s case about payment before 06 February 2019 or 11 December 2018. Factors like late filing of returns, ambiguity in the returns, and misstatements in the declaration add up and support the respondents' conclusion. Based on a cumulative consideration of all these factors, the respondents have not erred in their calculations or misconstrued the Scheme's provisions. Thus, on cumulative consideration of materials on record, it is satisfied that this is not a case where any relief can be granted to the petitioner. The determination and approach of the Respondents is neither vitiated by any perversity nor unfairness. No legal provision is breached. The Petitioner's approach has not been candid or fair. The Petitioner shifts stances without much regard for the truth. The petitioner has failed to produce credible material to warrant intereference with the factual findings recorded in the impugned order. This petition is liable to be dismissed and is hereby dismissed.

Issues Involved:

1. Validity of the impugned order under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Calculation and deduction of pre-deposit or deposit under Section 124(2) of the Scheme.
3. Alleged misstatements and inaccuracies in the petitioner's declaration under the Scheme.
4. The petitioner's entitlement to relief under the Scheme based on CENVAT credit utilization.

Detailed Analysis:

1. Validity of the Impugned Order:

The petitioner challenged the impugned order dated 27 January 2022, which required an additional payment of Rs. 1,25,23,051/-. The petitioner argued that this demand was contrary to the provisions of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, which should have accounted for amounts already paid, including CENVAT credit. The Court examined the petitioner's claims and found inconsistencies in the petitioner's declarations and submissions, leading to the conclusion that the impugned order was valid and did not warrant interference.

2. Calculation and Deduction of Pre-deposit or Deposit:

Under Section 124(2) of the Scheme, any pre-deposit or deposit made during appellate proceedings or investigations should be deducted from the amount payable by the declarant. The petitioner claimed that Rs. 3,27,81,964/- paid through CENVAT credit should be deducted. The Court noted that the petitioner failed to provide credible evidence to support the claim that this amount was utilized during the relevant period of enquiry or investigation. The petitioner's reliance on the filing date of the return as the date of credit utilization was rejected, as it did not align with the statutory provisions or the facts presented.

3. Alleged Misstatements and Inaccuracies:

The respondents argued that the petitioner made serious misstatements in the Declaration Form (SVLDRS 1) and failed to produce necessary documents to substantiate claims of CENVAT credit utilization. The Court agreed, noting the petitioner's inconsistent positions regarding the dates and amounts involved. The Court emphasized that the Scheme's objective is to resolve past disputes honestly, and the petitioner's contradictory statements undermined the credibility of the claims, thus justifying the respondents' determination.

4. Entitlement to Relief Based on CENVAT Credit Utilization:

The petitioner contended that CENVAT credit utilized for payment should qualify for relief under the Scheme. However, the Court found that the petitioner could not demonstrate that the credit was utilized during the investigation period as required by the Scheme. The petitioner's failure to produce the CENVAT Credit Ledger or other supporting documents led the Court to conclude that the claimed credit utilization was not substantiated. The Court also noted that the petitioner's changing stances and lack of credible evidence precluded the granting of any relief under the Scheme.

Conclusion:

The Court dismissed the petition, finding no error in the respondents' calculations or interpretation of the Scheme's provisions. The petitioner's inconsistent and unsupported claims, coupled with the failure to provide necessary documentation, led to the conclusion that no relief was warranted. The Court emphasized the importance of honesty and transparency in declarations under the Scheme and upheld the impugned order, discharging the Rule without any cost order.

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