2024 (1) TMI 444 - AT - Central Excise

Eligibility for Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Seeking waiver of penalty - demand for recovery alongwith interest and penalty - HELD 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. To the extent that the impugned order upheld recovery of duties under section 11A of Central Excise Act, 1944 none of the individual appellant herein would have been eligible to be declarant; the scheme itself does not acknowledge the existence of such appellant even though the scheme is intended to erase the detriment of penalty in each and every case. It is on record that the principal-noticee has been accorded the prescribed relief including erasure of penalties arising therefrom. Even though the appellants herein could not, at the time of existence of the scheme have derived the benefits from the coverage by the scheme, the intent and purpose of the scheme being collection of the duty or some percentage thereof, and forgoing interest, fine and penalty, the disposal of the application of M/s JSW Ispat Steel Ltd renders the continuance of the penalty against the three appellants to be not in conformity with the relief scheme - they are eligible for erasure of the penalties against them. The impugned order set aside - appeal allowed.

Summary

Issues:
Appeals challenging order upholding duty recovery, interest, penalty, and other detriments under CENVAT Credit Rules, 2004. Interpretation of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Eligibility of individual-appellants for relief under the scheme.

Analysis:
The judgment pertains to three appeals challenging an order upholding duty recovery, interest, penalty, and other detriments under CENVAT Credit Rules, 2004 issued to M/s JSW Ispat Steel Ltd and others. The appeals were filed after the introduction of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. M/s JSW Ispat Steel Ltd availed the scheme, leading to the deemed withdrawal of their appeal. The individual-appellants argued that the proceedings against them should stand concluded following the withdrawal of the principal-noticee's appeal.

The Chartered Accountant for the appellants contended that detriments against others should not survive once proceedings against the principal-noticee are terminated. However, the Authorized Representative argued that separate declarations are required for separate appeals under the scheme, citing a Supreme Court decision precluding any dilution of statutory intent.

The Tribunal noted that the scheme focuses on tax dues and relief is granted based on the total duty amount or disputed duty amount. The scheme aims to erase penalties, fines, and interest. As the individual-appellants would not have been eligible for relief under the scheme due to the duty recovery upheld in the impugned order, their penalties should be erased. The disposal of M/s JSW Ispat Steel Ltd's application under the scheme renders the continuation of penalties against the individual-appellants inconsistent with the relief scheme, making them eligible for penalty erasure.

Therefore, the appeals were allowed, and the impugned order was set aside, leading to the erasure of penalties against the individual-appellants. The judgment was pronounced on 30/11/2023.