Sabka Vishwas payment deadline and works contract re-quantification governed relief, penalties, and interest in the service tax dispute.

A payment under SVLDRS-3 had to be made within the prescribed 30-day period, and the scheme did not allow extension of time; late payment therefore defeated eligibility for Sabka Vishwas relief and prevented issuance of SVLDRS-4. The demand also had to be re-quantified on a works contract basis because the record indicated works contract services and the original quantification had not applied the applicable composition rate. Credit had to be given for amounts already paid, including the pre-deposit and the amount tendered under SVLDRS-3. The penalties were set aside, interest remained payable on the amounts due, and the statutory fine under Rule 7C of the Service Tax Rules, 1994 was upheld.

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Issues: (i) Whether the appellant was entitled to the benefit of the Sabka Vishwas scheme despite payment of the amount specified in SVLDRS-3 beyond the prescribed period; (ii) Whether the demand required re-quantification on the basis that the services rendered were works contract services, and whether the penalties could be sustained.

Issue (i): Whether the appellant was entitled to the benefit of the Sabka Vishwas scheme despite payment of the amount specified in SVLDRS-3 beyond the prescribed period.

Analysis: The amount indicated in SVLDRS-3 was required to be paid within 30 days from the date of issue. The payment was made after expiry of that period. The scheme rules do not confer any power to extend the time limit, and the absence of timely payment prevented issuance of SVLDRS-4.

Conclusion: The appellant was not eligible to receive the benefit of the Sabka Vishwas scheme.

Issue (ii): Whether the demand required re-quantification on the basis that the services rendered were works contract services, and whether the penalties could be sustained.

Analysis: The material on record indicated that the appellant was providing works contract services, but the demand had been quantified without applying the composition rate applicable to such service. The matter therefore required fresh quantification after considering the documentary evidence and the payments already made, including the pre-deposit and the amount paid under SVLDRS-3. In view of these facts, the penalties imposed were not sustained, though interest remained payable on the payments made and the balance, if any.

Conclusion: The matter was remanded for re-quantification on the works contract basis, the penalties were set aside, and the fine under Rule 7C of the Service Tax Rules, 1994 was upheld.

Final Conclusion: The decision granted only limited relief on merits by directing fresh quantification and deleting the penalties, while declining Sabka Vishwas relief and sustaining the statutory fine.

Ratio Decidendi: A payment under SVLDRS-3 must be made within the prescribed 30-day period, and where the underlying service is found to be works contract service, the demand must be quantified on the applicable composition basis after giving credit for payments already made.

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