2025 (6) TMI 1261 - AT - Central Excise

Revenue's appeal dismissed after discharge certificate issued under SVLDRS Scheme protects assessee from further proceedings

Commissiner of Central Goods and Service Tax, Excise and Customs, Bhopal Versus M/s. Akansha Sales Promoters

CESTAT New Delhi dismissed Revenue's appeal challenging dropping of demand against respondent who obtained discharge certificate under SVLDRS Scheme. ... Challenge to dropping of demand against the respondent - in case where the assessee opt for SVLDRS Scheme and obtained discharge certificate can the proceedings by way of appeal by the Revenue is sustainable or not? - HELD THAT:- As per Rule 6, 7, 8 and 9 of SVLDRS Scheme, if the assessee opt for the scheme, the applicant has to make a declaration in Form SVLDRS-1 and upon receipt of the declaration except in a case of voluntary disclosure of an amount of duty which is not in the case in hand as in this case show cause notice has been issued to the appellant on 09.07.2010. The said declaration is required to verified by the designated committee based on the particulars submitted by the declarant and if there is an discrepancy, the designated authority shall issue a notice to the declarant and thereafter SVLDRS is to be issued to the declarant after considering the submission made by the declarant and the material available on record and the declarant shall pay the amount as decided by the designated committee, thereafter discharge certificate is to be issued. No proceedings is sustainable against the respondent as discharge certificate has already been issued. In this case, it is the duty of the designated committee if declaration made by the respondent is not correct then a notice was required to be issued and thereafter to determine the correct amount of duty payable by the respondent. Admittedly, in this case no such notice was issued to the respondent and the declaration made by the respondent has been admitted by the designated authority. In that circumstances, nothing is payable by the respondent in this case. Conclusion - As Form SVLDRS has been issued to the respondent i.e. Discharge Certificate, therefore no demand is sustainable against the respondent. The appeal filed by the Revenue is disposed of. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered by the Tribunal are:(a) Whether an appeal filed by the Revenue is maintainable against an assessee who has opted for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), made a declaration under the Scheme, paid the amount determined by the designated committee, and obtained a discharge certificate (Form SVLDRS-4) under the Scheme;(b) The scope and effect of the discharge certificate issued under the SVLDRS Scheme, particularly whether it bars any further proceedings or demands in respect of the declared matter and time period;(c) The procedural obligations of the designated committee in verifying declarations and issuing notices in case of discrepancies;(d) The applicability of the provisions of the SVLDRS Scheme in the context of the present case where a show cause notice was issued and part of the demand was dropped by the adjudicating authority;(e) Whether the Revenue can challenge the dropping of demand when the assessee has obtained a discharge certificate under the Scheme.2. ISSUE-WISE DETAILED ANALYSISIssue (a): Maintainability of Revenue Appeal post SVLDRS Discharge CertificateRelevant legal framework and precedents: The SVLDRS Scheme, 2019, enacted to resolve legacy disputes, provides that once a declarant pays the amount determined by the designated committee and obtains a discharge certificate (Form SVLDRS-4), no further demand, penalty, or prosecution shall be sustainable for the declared matter and period (Section 129(1)).Court's interpretation and reasoning: The Tribunal examined the provisions of the Scheme, particularly Sections 125 to 129, and Rules 6 to 9. It noted that the Scheme mandates that once the designated committee issues the discharge certificate after full payment and proof of withdrawal of appeals, the certificate is conclusive as to the matter and time period covered. The Tribunal emphasized that the discharge certificate extinguishes any further liability and bars reopening of the matter under the indirect tax enactments.Key evidence and findings: It was undisputed that the respondent had filed a declaration under SVLDRS-1, paid the amount determined by the designated committee, and obtained the discharge certificate in Form SVLDRS-4. No appeal or reference was pending before the High Court or Supreme Court at the time of issuance of the certificate.Application of law to facts: In light of the Scheme's provisions and the facts, the Tribunal held that the Revenue's appeal against the respondent is not maintainable because the discharge certificate conclusively bars any further proceedings or demands.Treatment of competing arguments: The Revenue contended that part of the demand was dropped by the adjudicating authority and sought to challenge that. However, the Tribunal rejected this argument, stating that once the discharge certificate is issued, no demand is sustainable, regardless of the Revenue's dissatisfaction with the adjudicating authority's order.Conclusion: The appeal filed by the Revenue is not maintainable against a declarant who has obtained a discharge certificate under the SVLDRS Scheme.Issue (b): Effect and conclusiveness of the Discharge Certificate under SVLDRSRelevant legal framework and precedents: Section 129(1) of the Scheme provides that the discharge certificate is conclusive as to the matter and time period stated therein, barring further liability or prosecution. Section 129(2) clarifies exceptions, none of which apply to the present case.Court's interpretation and reasoning: The Tribunal underscored the finality attached to the discharge certificate, which precludes reopening or further proceedings on the declared matter and period. It noted that the issuance of the discharge certificate follows a thorough process of verification and determination by the designated committee.Key evidence and findings: The respondent had complied with all procedural requirements, including payment and withdrawal of appeals, leading to issuance of the discharge certificate.Application of law to facts: The Tribunal found that the discharge certificate conclusively extinguished the Revenue's right to demand or prosecute for the declared matter.Treatment of competing arguments: The Revenue's attempt to reopen the matter was found impermissible in view of the statutory protection conferred by the discharge certificate.Conclusion: The discharge certificate issued under SVLDRS is conclusive and bars any further demand or proceedings for the declared matter and period.Issue (c): Procedural obligations of the designated committee in verifying declarations and issuing noticesRelevant legal framework and precedents: Sections 126 and 127 of the Scheme, and Rules 6 and 9, prescribe the verification process by the designated committee, issuance of estimates or statements of amount payable, opportunities for hearing, and issuance of discharge certificates.Court's interpretation and reasoning: The Tribunal emphasized that the designated committee must verify the declaration for correctness and issue notices if discrepancies arise. Only after considering submissions and determining the amount payable can the discharge certificate be issued.Key evidence and findings: In the present case, no notice was issued to the respondent indicating any discrepancy. The declaration was accepted as correct, and the discharge certificate was issued accordingly.Application of law to facts: Since the designated committee did not find any discrepancy requiring notice, and the declaration was admitted, the respondent was entitled to the discharge certificate.Treatment of competing arguments: The Revenue did not demonstrate any procedural lapse or error in the designated committee's verification process.Conclusion: The designated committee complied with its procedural obligations, and the discharge certificate was rightly issued.Issue (d): Applicability of SVLDRS Scheme provisions in the context of a show cause notice and partial dropping of demandRelevant legal framework and precedents: The Scheme applies to pending demands and disputes as on 30th June 2019, including those arising from show cause notices. Section 123 defines 'tax dues' and the scope of the Scheme.Court's interpretation and reasoning: The Tribunal recognized that the Scheme is intended to resolve legacy disputes, including those where show cause notices have been issued. It noted that the respondent's case falls squarely within the Scheme's ambit, and the partial dropping of demand by the adjudicating authority does not affect the Scheme's applicability.Key evidence and findings: The show cause notice was issued on 09.07.2010, and the respondent declared the amount under SVLDRS and obtained the discharge certificate.Application of law to facts: The Tribunal held that the Scheme's provisions apply fully, and the partial dropping of demand does not invalidate the discharge certificate or permit further Revenue appeals.Treatment of competing arguments: The Revenue's contention that it can challenge the dropped demand was rejected as inconsistent with the Scheme's finality provisions.Conclusion: The SVLDRS Scheme applies notwithstanding partial dropping of demand, and the discharge certificate bars further appeals by the Revenue.Issue (e): Revenue's challenge to the dropping of demand post discharge certificate issuanceRelevant legal framework and precedents: Section 129(1) of the Scheme bars reopening of matters covered by the discharge certificate. The Scheme contemplates finality and closure of disputes once the certificate is issued.Court's interpretation and reasoning: The Tribunal found that the Revenue's appeal challenging the dropping of demand is impermissible once the discharge certificate is issued. The Scheme's objective is to provide finality and certainty, which would be defeated by allowing such appeals.Key evidence and findings: The discharge certificate was issued after due process and payment by the respondent.Application of law to facts: The Tribunal concluded that the Revenue cannot maintain an appeal to challenge the dropped demand after issuance of the discharge certificate.Treatment of competing arguments: The Revenue's argument was dismissed as contrary to the Scheme's provisions and purpose.Conclusion: The Revenue's appeal challenging the dropped demand is not maintainable post issuance of the discharge certificate.3. SIGNIFICANT HOLDINGS'In these terms, we hold that as Form SVLDRS has been issued to the respondent i.e. Discharge Certificate, therefore no demand is sustainable against the respondent.'The Tribunal established the core principle that the issuance of a discharge certificate under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 conclusively bars any further demand, penalty, or prosecution in respect of the declared matter and time period.The final determination on the maintainability of Revenue appeals post issuance of the discharge certificate is that such appeals are not sustainable, thereby providing finality and closure to legacy disputes resolved under the Scheme.