2024 (8) TMI 264 - AT - Service Tax

Appellant gets discharge certificate under SVLDRS 2019 despite delayed payment due to COVID-19 technical difficulties

CSN Logistics Pvt Ltd Versus Commissioner of Central Tax Secunderabad - GST

CESTAT Hyderabad allowed the appeal concerning payment under Sabka Vishwas Legacy Dispute Resolution Scheme 2019. The appellant made payment on 25.08.2020 ... Time limitation for making payment under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - whether the payment made on 25.08.2020 by the Appellant would entitle the Appellant to legally discharge the obligations under SVLDRS and therefore, entitled to amnesty from payment of interest and penalty or otherwise? - interest - penalty - HELD THAT:- The admitted facts are not in dispute as regards the dates on which it was to be paid as per the Department except that Appellants have said that date was further extended to 30.09.2020 and the actual date of payment i.e., 25.08.2020. The Appellants have also produced documents to substantiate their claim that they were trying to pay before 30.06.2020 and in support of that they have furnished a copy of challan in which a challan was generated for payment of the determined amount where the last date has been indicated as 30.06.2020. However, according to them, because of various technical glitches they were not able to transmit this money and subsequently they tried many times but unfortunately they were not able to remit and finally on 25.08.2020, they were successful in remitting the said amount - even for the period beyond 30.06.2020 the Department was exploring various possibilities as to allow the scheme to those people who had been already issued SVLDRS-3 prior to 30.06.2020 but were not able to pay. In fact, as pointed out by the Appellant, the Department floated an internal letter dt. 14.07.2020, seeking certain information from the field formations to find out likely impact by extending the date. One of the major factors which was considered by the Hon’ble High Court was Hon’ble Supreme Court’s judgment in its suo moto Writ Petition IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 418 - SC ORDER] extending the period of limitation in all proceedings irrespective of limitations prescribed under general or special laws w.e.f. 15.02.2020 till further orders. In fact, the Hon’ble Supreme Court in M/S. SS GROUP PVT. LTD. VERSUS AADITIYA J. GARG & ANR. [2021 (1) TMI 804 - SUPREME COURT], held that the period of limitation which was extended earlier vide Order dt.30.06.2020 was still operative. Similarly, in the case of N. SUNDARARAJAN (FORMER PARTNER) M/S. YARN BLISS, N. SUNDARARAJAN (FORMER PARTNER) M/S. WINACO YARN AGENCIES VERSUS UNION OF INDIA, THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, THE DEPUTY COMMISSIONER, THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE & GST [2021 (12) TMI 339 - MADRAS HIGH COURT], the Hon’ble High Court has referred to Parliament Enactment of Taxation and Other Laws (Relaxation and Amendment of certain provisions) Act, 2020 and held that in terms of the above Act, the time limit prescribed under Chapter V of the Finance Act for completion of certain action as stipulated under Chapter V is extended till 30.09.2020 and finally held that time limit of completion of payment of taxes as quantified in Form SVLDRS-3 is still extended till 30.09.2020. The Appellants have discharged their liability as determined under SVLDRS Scheme within permissible time limit and therefore, they were entitled for discharge certificate under SVLDRS-4. Since they have rightly discharged the amount determined under SVLDRS-3, there shall not be any case for any interest or penalty. Accordingly, the demand confirmed by the Department for recovering interest and penalty and upheld by Commissioner (Appeals) vide his Impugned Order is not sustainable. Appeal allowed. Issues Involved:1. Timeliness of payment under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS).2. Validity of the demand for interest and penalty for delayed payment.3. Applicability of statutory extensions due to COVID-19.Issue-wise Detailed Analysis:1. Timeliness of Payment under SVLDRS:The primary issue was whether the payment made by the Appellant on 25.08.2020 was within the permissible time under the SVLDRS. The Appellant argued that the time limit for payment was extended due to COVID-19, citing various judgments and amendments. The Department contended that the payment was not made by the extended deadline of 30.06.2020, referencing the Supreme Court's judgment in M/s Yashi Construction Vs UOI, which stated that the date could not be extended beyond what was provided under the scheme.2. Validity of the Demand for Interest and Penalty for Delayed Payment:The Original Authority and Commissioner (Appeals) upheld the demand for interest and penalty, stating that the Appellant failed to pay the determined amount within the stipulated time. The Appellant contended that due to technical glitches and subsequent extensions, the payment was made within the permissible period.3. Applicability of Statutory Extensions Due to COVID-19:The Appellant relied on judgments from various High Courts, which extended the limitation period due to the COVID-19 pandemic, as per the Supreme Court's suo moto writ petition. The Department argued that these extensions did not apply to the SVLDRS payments, referencing specific cases where courts upheld the original deadlines.Judgment Analysis:Timeliness of Payment:The Tribunal found that the Appellant made the payment on 25.08.2020, within the extended period allowed due to COVID-19. The Tribunal noted that the Central Government had amended the rules to extend the payment deadline and that the Department had considered further extensions due to the pandemic.Demand for Interest and Penalty:The Tribunal concluded that since the Appellant made the payment within the extended period, they were entitled to amnesty from interest and penalty. The Tribunal set aside the demand for interest and penalty, stating that the Appellant had discharged their liability under the SVLDRS within the permissible time limit.Statutory Extensions Due to COVID-19:The Tribunal relied on various High Court judgments, which extended the limitation period due to COVID-19, and found that these extensions applied to the SVLDRS payments. The Tribunal noted that the Supreme Court's general relaxation in limitation due to the pandemic was not considered in the Department's cited cases.Conclusion:The Tribunal allowed the appeal, stating that the Appellant had made the payment within the extended time limit and was entitled to the discharge certificate under SVLDRS-4. The demand for interest and penalty was set aside, and the competent authority was directed to issue the requisite discharge certificate.Final Order:The appeal was allowed, and the demand for interest and penalty was set aside. The competent authority was directed to issue the SVLDRS-4 discharge certificate. The judgment was pronounced in the Open Court on 31.07.2024.