Sabka Vikas scheme

[Rohidas Kamath]

Dear Sir,

I have a matter involving around ₹ 10.00 crore demand and ₹ 10.00 crore penalty and interest.

Breif Matter:

Due to oversight I failed to comply with a notification issued in Sept 2009 in respect of service tax. Subsequently service tax of ₹ 10.00 crore alongiwth interest was paid after the visit of Preventive officers. I have taken cenvat credit of service tax of ₹ 10.00 crores,

Subsequently show cause notice was issued seeking to deny the service tax credit. On adjudication, the Commissioner confirmed the demand and imposed equal amount of penalty.

CESTAT remanded the matter to original adjudicating authority.

As far as Iam concerned, I have discharged the tax liability.

Now my managemnt has opted for relief under subaka vikas schme.

Now my concern is:

1) Will I get relief from payment of any duty/tax as I have already discharged my service tax liability.

2) What remedy is available to me if the Committee rejects my application under 'Sabka Vikas Scheme'.

[Rajagopalan Ranganathan]

Sir,

CESTAT would have set aside the original order passed and remanded the matter to the original authority for fresh adjudication. Therefore the proceedings before the original authority should be treated as fresh proceedings. However the relevant the date of remand by CESTAT should be before 30.06.2019. If it is after 30.06.2019 you are not eligible to relief granted by subaka vikas scheme.

[KASTURI SETHI]

By virtue of de novo proceedings (remanding the case back to Original Adjudicating Authority for re-adjudication), the status of the demand is unconfirmed (stage of SCN is back) . Unconfirmed demand cannot be recovered until or unless is confirmed. Now the date of issuance SCN is relevant. As per Section 124 (1) (b) of Chapter V of the Finance (No.2) Act, 2019, your firm is eligible for complete relief from penalty. No relief in respect of tax/duty is admissible.

 

[Rohidas Kamath]

Small correction in the query.

On remand the Commissioner has confirmed the demand and imposed equal amount of penalty. My concern is I have already discharged the service tax dues alongwith interest and therefore as on date I have no liability to be discharged as service tax. The Commissioner in the second round of litigation (on remand) has denied me the cenvat credit of service tax. I will get relief as far as interest and penalty is concerned. But my concern is why I should pay 60% of the service tax on account of Sabka vishwas scheme when I owe nothing.

[KASTURI SETHI]

Tax/duty deposited cannot be claimed as relief in this case. You are not eligible for this relief.

AI Summary

Service Tax Issue: Demand and Penalty of 10 Crore Each, Relief Sought Under Sabka Vikas Scheme Denied Due to Remand Date. An individual sought advice regarding a service tax issue involving a demand and penalty of 10 crore each. Due to an oversight, they failed to comply with a 2009 notification, but later paid the service tax and interest. A show cause notice was issued to deny service tax credit, and the Commissioner confirmed the demand with a penalty. CESTAT remanded the case for fresh adjudication. The individual inquired about relief under the Sabka Vikas scheme, which was deemed ineligible if remand occurred after June 30, 2019. They expressed concern over paying 60% of the service tax despite having no remaining liability.