QUESTION

Our client got Service tax order form Comm. Appeals and confirm demand for Penalty and interest as duty has been paid before. OIA received on Jan-19 we have not appeal against order in CESTAT, and till date we have not paid confirmed demand of interest and penalty and also received two letters from department for payment of arrears. Can we go for Sabka Vishwas ( Legacy Disput Resolution ) Scheme, 2019 implemented vide Noti. No,05/2019 central Excise -NT for waiver of interest and penalty.

ANSWER

Facts of the case: OIA received in Jan-19 in respect of Penalty and interest and tax payable is NIL. No appeal is filed against order till date.

Law Applicable: Section 120 of Finance Act 2019
(c) 'amount in arrears' means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of'
(i) no appeal having been filed by the declarant against an order or an order in appeal before expiry of the period of time for filing appeal; or
(ii) an order in appeal relating to the declarant attaining finality; or
(iii) the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019,wherein he has admitted a tax liability but not paid it;

Circular No. 1071/4/2019-CX.8 Dated 27/08/2019 clarifies that:

4. The relief extended under this Scheme is summed up, as follows:

(a) For all the cases pending in adjudication or appeal (at any forum), the relief is to the extent of 70% of the duty involved if it is Rs. 50 lakhs or less and 50% if it is more than Rs. 50 lakhs. The same relief is available for cases under investigation and audit where the duty involved is quantified and communicated to the party or admitted by him in a statement on or before 30.06.2019.

(b) In cases of confirmed duty demand, where there is no appeal pending, the relief offered is 60% of the confirmed duty amount if the same is Rs. 50 lakhs or less and it is 40% if the confirmed duty amount is more than Rs. 50 lakhs.

(c) In cases of voluntary disclosure of duty not paid, the full amount of disclosed duty would have to be paid.
(d) There will be full waiver of interest and penalty under all the categories of cases, as at (a) to (c) above.

5(iii) If the amount of duty being litigated is 'nil', either because the show cause notice was only for penalty or because the duty was deposited at any subsequent stage, and only penalty is being contested, then the taxpayer does not need to deposit anything to settle his case. However, the taxpayer would have to make a declaration under this Scheme.
Further As per FAQs issued by CBIC on SVLDRS 2019:
Q27. What are the benefits available under the Scheme?
Ans. The various benefits available under the Scheme are:
• Total waiver of interest and penalty
• Immunity from prosecution

Interpretation:  Your case falls in category of arrears as the OIA has attained finality and no further appeal is filed against the said order.

Conclusion: As your case falls in category of arrears thus you are eligible to opt for the scheme. Also tax payable in your case is NIL thus as per above said Circular and FAQ entire interest and penalty amount is waived off.