CESTAT allowed the appeal, holding that under the statutory...

CESTAT allowed the appeal, holding that under the statutory SVLDR scheme and attendant CBIC instructions (including the provision that co-noticees apply after the principal has settled), a principal's valid settlement and issuance of SVLDR certification can result in discharge or exoneration of co-noticees from penalty liability on equitable and natural justice grounds. The Tribunal recognised that administrative delays in issuing certificates and the scheme's limited window justified extending the settlement benefit to co-accused who could not timely apply, and affirmed that the co-noticees were rightly accorded relief following principal settlement. A prior High Court decision under settlement commission provisions was distinguished.