2022 (12) TMI 911 - AT - Service Tax

SVLDR Scheme - pre-deposit could not be verified as per records available and the amount has also not been mentioned in the show cause notice for appropriation - HELD THAT - There is no dispute as regards payment of this amount in question. Further, it is evident from the record that this amount remained unadjusted due to fault of the Department as well as the Designated Committee under the Sabka Vishwas Scheme, who have refused the adjustment of the amount of pre-deposit, stating that the amount is not verifiable. This amount remained as the Revenue deposit with the Department and was never adjusted. Further, this amount is not a part of the admitted tax - the Adjudicating Authority is directed to grant refund of Rs.29,36,382/- within a period of 30 days from the date of receipt of this order along with interest @12% per annum from end of three months from the date of filing of the application for refund, till the date of grant of refund. Appeal allowed.

Summary

Issues:
Refusal of refund of Rs.29,36,382 under SVLDR Scheme.

Analysis:
The appellant, engaged in Works Contract Services and construction of residential complexes, faced a demand for service tax of Rs.5,34,58,093. During investigation, the appellant deposited Rs.29,36,382 mistakenly, as stated by their Authorised Signatory. The Department, however, did not recognize these deposits in the show cause notice or propose appropriation. Subsequently, the appellant applied for settlement under the SVLDR Scheme, mentioning the deposit. The Department issued Form SVLDRS-III, stating inability to verify the deposit for adjustment, directing the appellant to pay the full demanded amount of Rs.2,67,29,046.50. The appellant complied, settling the dues under SVLDRS-IV and later sought a refund of the unadjusted amount, which was rejected citing the settlement under a High-Level Committee and the Scheme's provisions disallowing refunds. The Commissioner (Appeals) upheld the rejection, leading to the appeal before the Tribunal.

The appellant contended that the Department's failure to verify the deposit should not deprive them of the adjustment benefit, invoking Article 265 of the Constitution of India against unauthorized collection or retention of funds by the Government. The appellant sought relief by allowing the appeal and consequential benefits. The respondent, represented by the Authorised Representative, relied on the impugned order.

The Tribunal, after considering the arguments, noted the undisputed payment of Rs.29,36,382, unadjusted due to the Department and the Designated Committee's refusal to verify it under the SVLDR Scheme. Holding that the amount remained as Revenue deposit, not part of the admitted tax, the Tribunal allowed the appeal, setting aside the impugned order. The Adjudicating Authority was directed to refund Rs.29,36,382 within 30 days from the order date, with interest at 12% per annum from three months after the refund application filing until the refund grant date.