CESTAT Rules, Proceedings Against Assessee Unsustainable Once Discharge Certificate Is Issued Under SVLDRS Scheme
Pranav B Prem
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), comprising Judicial Member Ashok Jindal and Technical Member P. Anjani Kumar, held that once a discharge certificate has been issued under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), all proceedings against the assessee in respect of the matter and time period covered by the certificate are no longer sustainable.
Background of the Case
M/s Akansha Sales Promoters, the respondent in this matter, had been issued a show cause notice dated 09.07.2010 for alleged non-payment of central excise duty. Following adjudication, a demand of ₹1,57,43,624 was confirmed through Order-in-Original dated 28.09.2018. During the pendency of further proceedings, the respondent opted to settle the matter under the SVLDRS scheme, which was introduced to resolve pending indirect tax disputes and reduce litigation.
In accordance with the scheme, the respondent submitted a declaration in Form SVLDRS-1 and subsequently received a discharge certificate in Form SVLDRS-4, confirming the final settlement of dues and immunity from further proceedings. Despite this, the Revenue filed an appeal before the Tribunal challenging the partial dropping of demand by the adjudicating authority.
Issue for Consideration
The central question before the Tribunal was whether any proceedings—including those initiated by the department in the form of an appeal—can be sustained against an assessee who has obtained a discharge certificate under SVLDRS, 2019.
Tribunal's Observations and Reasoning
The Tribunal extensively referred to Sections 121 to 129 of the Finance (No. 2) Act, 2019, which lays down the structure and legal consequences of the SVLDRS scheme. It emphasized the following:
Section 127(8) provides that once the designated committee is satisfied that the declarant has paid the amount indicated in the settlement and fulfilled the procedural formalities (including withdrawal of any pending appeals), it shall issue a discharge certificate in electronic form.
Section 129(1) makes it explicitly clear that such discharge certificates are conclusive as to the matter and time period covered, and:
No further duty, interest, or penalty shall be payable.
No prosecution shall be initiated.
The matter shall not be reopened in any other proceeding under the indirect tax enactments.
The Tribunal further explained that the designated committee has a duty to verify the correctness of the declaration under Section 126. If the declaration is found incorrect, the committee must issue a notice and determine the correct liability. However, in this case, no such discrepancy or objection was raised by the designated authority, and the declaration was accepted without protest.
It was observed that the declaration submitted by the respondent was duly verified, and the discharge certificate was issued without any indication of misrepresentation or suppression. Therefore, under the law, the issuance of Form SVLDRS-4 conclusively settled the matter.
The Tribunal also rejected the Revenue’s argument that since part of the demand was dropped at the adjudication stage, their right to appeal the dropped portion remains unaffected. It clarified that once the discharge certificate is issued, the scheme treats the dispute as fully and finally resolved for the relevant period, including for both assessee and departmental appeals.
Tribunal’s Final Decision
The Tribunal held: "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 the declaration made by the respondent was not correct—to issue a notice and thereafter determine the correct amount payable. Admittedly, no such notice was issued." The appeal by the Revenue was thus found not maintainable and was disposed of accordingly, bringing the dispute to a complete closure in favour of the assessee.
Appearance
Counsel for Appellant/ Assessee: Rakesh Agarwal and S.K. Roy
Counsel for Respondent/ Department: Deepika Gawri Tyagi
Cause Title: Commissioner of Central Goods and Service Tax, Excise and Customs, Bhopal V. M/s. Akansha Sales Promoters
Case No: Excise Appeal No. 50135 of 2019
Coram: Ashok Jindal [Judicial Member], P. Anjani Kumar [Technical Member]
