Dr. Rachna Gupta, J
1. M/s. LDS Engineers Private Limited are registered separately under the service category of ‘Goods Transport Operator’ and under the
service category of ‘Consulting Engineer Services’. On going through the records of appellant and statement dated 14.01.2016,
details/agreement as furnished by the appellants, department observed as follows:
1.1 Appellants are engaged in providing services to their clients i.e. M/s. Supreme Infrastructure India Limited, M/s. Simplex Infrastructure Limited,
M/s. Jain Infra Projects Ltd. by way of supplying (on hire basis) their heavy machines and JCB owned by them to their/ client’s construction and
excavation sites along with operators and in case of supply of these machines in remote area (away from Delhi) the mechanic is also sent alongwith
the machines. Department formed the opinion that the effective control and possession of the machines, given on hire by the appellants, remain
completely with the appellants. Hence the activity of appellant is covered under the taxable category of “Supply of Tangible Goods†which is not
covered under Section 66D. Hence vide Show Cause Notice No. 15/2016 dated 22.04.2016, gross service tax amounting to Rs.46,18,084/- was
proposed to be demanded and recovered from appellant with interest and penalty.The proposal is confirmed vide Order-in-Original No. 151/2017
dated 30.05.2017. The amount of Rs. 2,77,409/- as was already deposited by the appellantis ordered to be appropriated. The appeal against the said
order is rejected vide Order-in-Appeal No. 55-56-57/2018 dated 08.03.2018. Being aggrieved, the appellant is before this Tribunal.
2. We have heard Shri A.K. Batra, Chartered Accountant for the appellant and Shri Rajeev Kapoor, Authorized Representative for the department.
3. The authorized representative of appellant/ the Chartered Accountant for the appellant has submitted that the appellant is the director of the
company M/s. LDS Engineers Pvt. Ltd. having its registered place of business at B1308A, Devika Tower, 6, Nehru Place, New Delhi â€" 110019.
The company had two directors namely, Lt. Shri Himadri Roy and Shri Samid Gupta. The company applied for closure of the present case by opting
Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 (hereinafter referred as SVLDRS). The company filed an application vide Form
SVLDRS-1 dated 26.11.2019 against which certificate in Form SVLDRS-4 dated 07.07.2020 exhibiting complete and final discharge of their tax
liability was issued. Therefore, the company has been exonerated from all the charges leveled against it vide above mentioned show cause notice. The
appellant, the director of said company,has filed the present appeal before the Hon’ble Tribunal based on the declaration under SVLDRS by the
co-noticee and the discharge given to the company of present appellant. It is impressed upon that the same relief is available to the appellant also
under the said scheme under the scheme. Section 124(1)(b) of the scheme and Circular 1071/4/2019-CX.8 dated 27.08.2019 have been emphasized
and following decisions are relied upon:
(i) VK Aggarwal & Co. Vs. CST, Delhi Final Order No. 52778-52779/2018 dated 16.08.2018 CESTAT Delhi.
(ii) M/s. Siemens Ltd. (formerly known as M/s. Morgan Construction Co. Pvt. Ltd.), Mr. Sunil Chellani Vs. Commissioner of Central Excise,
Mumbai-III reported as 2023 (5) TMI 377-CESTAT Mumbai dated 06.03.2023.
(iii) Shri B.V. Kshatriya Vs. Commissioner of GST & CE, Nashik reported as 2023 (5) TMI 858 â€" CESTAT Mumbai dated 11.01.2023.
(iv) Mr. Dinesh Kanoria Vs. Commissioner of Central Excise, Thane-I reported as 2022 (12) TMI 1408-CESTAT Mumbai dated 20.12.2022.
(v) Shri Ramesh Deshpande and Shri Debdutta Chatterjee Vs. Commissioner of Central Excise, Nagpur reported as 2021 (7) TMI 1307 â€" CESTAT
Mumbai dated 27.07.2021.
3.1 Finally submitting that confirmation of penalty upon the appellant, in the given circumstances, defeats the true spirit of the SVLDRS Scheme, the
order under challenge is prayed to be set aside and appeal is prayed to be allowed.
4. Learned Departmental Representative, on the other hand, has reiterated the findings in Order-in-Appeal. It is also submitted that relief under
SVLDRS is available only to the declarant. Appellants are not the declarant, hence no waiver of penalty is available to appellant. Impressing upon no
infirmity in the order in appeal under challenge, appeal is prayed to be dismissed.
5. Having heard both the parties and after perusing the entire record of the appeal, we observe and hold as follows:
5.1 Much emphasis has been laid, by the Chartered Accountant for the appellant,on Section 124 and 129 of Sabka Vishwas (Legacy Dispute
Resolution) Scheme, 2019 and the Circular No. 1071/4/2019 dated 27.08.2019. We foremost perused the same. Section 124 of SVLDRS talks about
the relief available under the scheme. It reads as follows:
124(1) Subject to the conditions specified in sub-section (2), the relief available to a declarant under this Scheme shall be calculated as
follows:
(a) where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on the
30th day of June, 2019, and if the amount of duty is,-
(i) rupees fifty lakhs or less, then, seventy per cent. of the tax dues;
(ii) more than rupees fifty lakhs, then, fifty per cent. of the tax dues;
(b) where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been
paid or is nil, then, the entire amount of late fee or penalty;
(c) xxxxxxxxxxxxx
(d) xxxxxxxxxxxxxx
(e)where the tax dues are payable on account of a voluntary disclosure by the declarant, then, no relief shall be available with respect to
tax dues. (2) The relief calculated under sub-section (1) shall be subject to the condition that any amount paid as predeposit 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 predeposit 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.
Under section 125(1) all persons shall be eligible to make a declaration.
6. The perusal of these provision reveals 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
declarantunder the scheme. Now we peruse Section 129 of the scheme reads as follows:
129. Issue of discharge certificate to be conclusive of matter and time period.
(1) Every discharge certificate issued under section 126 with respect to the amount payable under this Scheme shall be conclusive as to the
matter and time period stated therein, and
(a) the declarant shall not be liable to pay any further duty, interest, or penalty with respect to the matter and time period covered in the
declaration,
(b) the declarant shall not be liable to be prosecuted under the indirect tax enactment with respect to the matter and time period covered in
the declaration;
(c) no matter and time period covered by such declaration shall be reopened in any other proceeding under the indirect tax enactment.
(2)Notwithstanding anything contained in sub-section (7)
(a) no person being a party in appeal, application, revision or reference shall contend that the central excise officer has acquiesced in the
decision on the disputed issue by issuing the discharge certificate under this scheme;
(b) the issue of the discharge certificate with respect to a matter for a time period shall not preclude the issue of a show cause notice,-
(i) for the same matter for a subsequent time period; or
(ii) for a different matter for the same time period;
(c) in a case of voluntary disclosure where any material particular furnished in the declaration is subsequently found to be false, within a
period of one year of issue of the discharge certificate, it shall be presumed as if the declaration was never made and proceedings under
the applicable indirect tax enactment shall be instituted.
7. The bare perusal of this provision also makes it clear that 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.
The circular also, as relied upon on behalf of appellants, is perused. Para 3 thereof reads as follows:
(3) Dispute resolution and amnesty are the two components of this Scheme. The dispute resolution component is aimed at liquidating the
legacy cases locked up in litigation at various forums whereas the amnesty component gives an opportunity to those who have failed to
correctly discharge their tax liability to pay the tax dues. As may be seen, this Scheme offers substantial relief to the taxpayers and others
who may potentially avail it. Moreover, the Scheme also focuses on the small taxpayers as would be evident from the fact that the extent of
relief provided is higher in respect of cases involving lesser duty (smaller taxpayers can generallybe expected to face dispute involving
relatively lower duty amounts).
8. The perusal makes it abundantly clear that the relief of circular also is available to the person who has availed the benefit given under the scheme.
We also appreciate that the SVLDRS is a bold endeavor to unload the baggage relating to legacy taxes i.e. central excise and service tax and allowed
business to make a new beginning (under new GST era). The said circular itself makes it incumbent upon all the officers and staff of CBIC to partner
with the trade and industry to make the scheme a grand success. Further 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 onlywho shall be not be liable to pay any further duty, interest or penalty.
9. It is further observed that sub para (i) of Para 10 of the circular specifies as follows:
(i) Section 124(1) (b) provides that where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of
duty in the said notice has been paid or is 'nil', then, the entire amount of late fee or penalty will be waived. This section, inter alia, covers
cases of penal action against co-noticees. In case of a show cause notice demanding duty/tax from main taxpayer and proposing penal
action against co-noticees, it is clarified that the co-noticees can't avail the benefits of the scheme till such time the duty demand is not
settled. Once, the main-noticee discharges the duty demand, the co-noticees can apply under this Scheme. This will also cover cases where
the main noticee has settled the matter before the Settlement Commission and paid the dues and in which co-noticees were not a party to the
proceedings before the Settlement Commission.
10. Thus, 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.
11. Though, the Chartered Accountantappearing for the appellant has relied upon several decisions to plead that the benefit of settlement is available
to all the co-noticees but it is observed that decision in the case of P B Vyas Vs. Commissioner of Central Excise, Mumbai reported as 2021 (378)
ELT 177 is not applicable to the given set of circumstances because in that case the penalty of the co-noticee was set aside for the reason that there
was already an observation about no evidence of intentional evasion on part of the co-noticee. Similarly, decisionin the case of Shri Sashi Charan
Banerjee of Tribunal Bangalore vide the Final Order No. 75578/2022 dated 14.12.2022 in Excise Appeal No. 77169/2018 is not applicable to the
present facts and circumstances. In the said case also it was held that authority has miserably failed to distinguish the non-payment of tax for the
reasons beyond the control of theassessee from the situation where the assessee has failed to deposit tax with the sole intention to not to deposit the
same. In the said caase the non payment of duty was due to severe medical condition of then spouse which again is not the fact of the present case.
12. In view of the entire above discussion, it is held that 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. Accordingly, the order under challenge is hereby upheld. Consequently the appeal is hereby ordered to be dismissed.
[Order pronounced in the open court on 18.07.2024]
