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Issues: (i) Whether the amount paid by the assessee during search and investigation through Cenvat Credit could be adjusted while computing the payable amount under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. (ii) Whether the denial of Cenvat Credit on the ground that it was availed beyond the prescribed time limit was sustainable in the context of the Scheme.
Issue (i): Whether the amount paid by the assessee during search and investigation through Cenvat Credit could be adjusted while computing the payable amount under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
Analysis: The Scheme and Section 124 of the Finance (No. 2) Act, 2019 contemplate deduction of amounts already paid by a declarant during enquiry, investigation, or audit while determining the relief payable. The amount deposited by the petitioners during search was not confined to a payment made in appellate proceedings and could not be excluded merely because it was routed through Cenvat Credit. The Committee was therefore required to give credit for such payment while quantifying the amount under the Scheme.
Conclusion: The issue was decided in favour of the assessee. The amount paid during investigation was held adjustable against the liability under the Scheme.
Issue (ii): Whether the denial of Cenvat Credit on the ground that it was availed beyond the prescribed time limit was sustainable in the context of the Scheme.
Analysis: The objection based on the one-year limitation under Rule 4(1) of the Cenvat Credit Rules, 2004 was not accepted as a ground to deny adjustment under the Scheme. The Court followed the view that the Scheme required consideration of amounts already deposited during investigation and that such benefit could not be denied by treating the limitation issue as decisive for the limited purpose of computation under the Scheme.
Conclusion: The issue was decided in favour of the assessee. The time-limit objection could not defeat adjustment of the credit amount under the Scheme.
Final Conclusion: The impugned SVLDRS communications and the denial letter were set aside, and the matter was sent back for fresh consideration of the petitioners' documents and payment proof in accordance with law after giving an opportunity of hearing.
Ratio Decidendi: Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, amounts already paid during enquiry or investigation must be deducted while computing the declarant's liability, and such adjustment cannot be denied merely on the basis of the time-limit applicable to availment of Cenvat Credit.
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