2024 (7) TMI 1459 - AT - Service Tax

Taxability - Goods Transport Operator - Consulting Engineer Services - Department formed the opinion that the effective control and possession of the machines, given on hire by the appellants, remain completely with the appellants, the activity of appellant is covered under the taxable category of Supply of Tangible Goods which is not covered under Section 66D - Section 124 and 129 of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and the Circular No. 1071/4/2019 dated 27.08.2019 - HELD THAT - The relief as mentioned under the SVLDRS scheme is available to the declarant i.e. only to the person who applies under the scheme and declares as required. Everyone, whether company or its directors are eligble to apply to be called as declarant under the scheme - the discharge certificate shall also be issued to the declarant and after the discharge certificate it is declarant only who is given the benefit of no more being liable to pay any further duty, interest or penalty nor shall be liable to be prosecuted with respect to the matter in time covered in his declaration. Perusal of the circular reveals that it fixes timelines for the various processes involved which are to be strictly adhered to so that the entire process of filing of declaration to communication of Department s decision and to payment gets completed within 90 days. Once the declarant produces the proof of payment and withdrawal of appeal, Scheme provides for deemed withdrawal of appeal, a discharge certificate will be issued indicating a full and final closure of the proceedings in question for both the department and the taxpayer. It shall be the declarant only who shall be not be liable to pay any further duty, interest or penalty - the circular itself requires that once the duty demand stands discharged by the main noticees, the co-noticees also have to apply under the scheme to avail the similar benefit of waiver of penalty. Since the appellant personally has not applied under SVLDRS, 2019, he cannot be called as declarant under the scheme. Hence the benefits flowing out of said amnesty scheme cannot be made available to the appellant. It is an established principle that the company is a separate legal entity and so are the Directors. In light of these observations we do not find any infirmity in the order under challenge. The order under challenge is hereby upheld - Appeal dismissed.

Summary

Issues:
1. Taxability of services provided by the appellant under the categories of 'Goods Transport Operator' and 'Consulting Engineer Services'.
2. Applicability of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to the appellant.
3. Interpretation of Sections 124 and 129 of the SVLDRS scheme.
4. Eligibility of the appellant to avail benefits under the SVLDRS scheme.
5. Consideration of penalty imposition on the appellant in light of the SVLDRS scheme.

Taxability of Services Provided:
The appellant, engaged in providing services to clients by supplying heavy machines and operators to construction sites, was found to have effective control and possession of the machines given on hire. The department categorized the activity under "Supply of Tangible Goods," proposing a service tax amounting to Rs. 46,18,084. The Tribunal upheld the department's decision, rejecting the appellant's appeal against the order.

Applicability of SVLDRS Scheme:
The appellant applied for closure under the SVLDRS scheme, which was granted, resulting in a discharge of tax liability. The appellant sought relief under the scheme, citing various decisions and emphasizing Section 124(1)(b) of the scheme. However, the Tribunal noted that the relief under the SVLDRS scheme is available only to the declarant, and since the appellant did not personally apply under the scheme, the benefits could not be extended to them.

Interpretation of SVLDRS Scheme Sections:
Sections 124 and 129 of the SVLDRS scheme were analyzed to understand the relief available to declarants and the conclusive nature of discharge certificates. The Tribunal highlighted that relief under the scheme is specifically for declarants, and discharge certificates are issued only to declarants, absolving them from further duty, interest, or penalty.

Eligibility for SVLDRS Benefits:
The Tribunal emphasized that the relief and benefits under the SVLDRS scheme are intended for declarants who have applied under the scheme. While the circular associated with the scheme aims at resolving legacy tax issues and providing relief, it mandates strict adherence to timelines and procedures for availing benefits.

Consideration of Penalty Imposition:
The appellant's argument for penalty waiver under the SVLDRS scheme was dismissed as the appellant did not apply under the scheme personally. The Tribunal referenced specific cases to illustrate that penalty waivers under the scheme are contingent upon the discharge of duty demands by the main noticees, and co-noticees must also apply under the scheme to benefit from penalty waivers.

In conclusion, the Tribunal upheld the department's decision, stating that the appellant, not being a declarant under the SVLDRS scheme, was ineligible for the benefits offered. The appeal was dismissed, affirming the penalty imposed on the appellant.