CESTAT Waives Penalties for Reliance Stainless Steel and Co-Noticees, Grants Relief under SVLDRS-2019 Scheme [Read Order]

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted relief to Reliance Stainless Steel and other co-noticees under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS-2019), waiving penalties imposed on them.

The case involved appeals filed by Reliance Stainless Steel, M K Steel Centre, and Mahendra R Shah, the director of M/S SMC Stainless Alloy Pvt Ltd.

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During the proceedings, the advocate appearing on behalf of  M K Steel Centre informed the tribunal that he was no longer representing Reliance Stainless Steel. Reliance Stainless Steel made a request of adjournment stating that the matter was very old and due to withdrawal of their advocate.

But it is to be noted that the court decided to proceed with the matter on its merits, as the issues involved were identical across all three appeals.

The main issue in the case was whether the penalties imposed on the co-noticees could be waived if the main party had already settled the duty demand under the SVLDRS-2019 scheme. The advocate for M K Steel Centre and Mahendra R Shah sought relief for his clients, relying on a previous decision in the case of Prakash Steelage Ltd Vs. C.C.E & S.T- Bharuch, where the tribunal had ruled that once a duty demand case is settled under SVLDRS-2019, penalties on both the main assessee and co-noticees are waived.

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 The court referred to the Division Bench decision in the Prakash SteelageLtd Vs. C.C.E & S.T- Bharuch, vide Final Order No. 12591-12595/2024, which established that penalties on co-noticees do not survive if the main party's case has been settled under SVLDRS-2019. The division bench in the above-mentioned case held that ‘we find that as of now it is settled that once the duty demand case is settled under SVLDRS-2019, as perScheme itself, there is a waiver of penalties on the main assessee against whom the demand was confirmed as well as on other co-noticees.’

The bench noted since the main party's case had been settled under the scheme, the continuation of penalties against the co-noticees was inconsistent with the scheme's objectives.

The CESTAT, comprising Somesh Arora (Judicial Member), allowed the assessee’s appeal and the penalties were waived for all three appellants.

To Read the full text of the Order CLICK HERE

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