The Bombay High Court has held that the Designated Committee erred in not treating SVLDRS declaration by considering two demands in Show Cause Notice, one relating to service tax dues and recovery of disallowed Cenvat credit.
The petitioner, M/s. UCN Cable Network (P) Ltd. is a private limited company. It is engaged in providing various taxable services such as broadcasting service, cable operators service and so on and so forth. It was registered under the erstwhile service tax regime. Due to severe financial difficulties, the petitioner could not properly discharge it’s service tax liability. Some investigation was conducted by the respondent department following which a show cause notice was issued to the petitioner alleging that the petitioner failed to discharge it’s service tax liability properly and improperly availed of Cenvat credit, to which the petitioner was not eligible under the Cenvat Credit Rules, 2004 and accordingly, a demand was placed upon the petitioner for payment of service tax dues and also the dues on account of improperly availed of Cenvat credit together with a demand for payment of penalty and interest as mentioned in the show cause notice.
The show cause notice was issued to the petitioner on 24.4.2019. After hearing the petitioner, the show cause notice was adjudicated upon by the Commissioner of Central Tax and Central Excise, Nagpur-I Commissionerate vide order dated 29.12.2019 which the petitioner claims to have been received by him on 30.12.2019.
The division bench of Justice Sunil B.Shukre and Justice Anil S.Kilhore held that the respondent has fallen in error in not treating the declaration filed by the petitioner as constituting one single case in the category of “amount in arrears” and by considering two demands in the show cause notice, one relating to service tax dues and the other in relation to recovery of disallowed Cenvat credit, separately and individually, something not permitted under Rules, 2019. On this count as well, we find that the action of respondent is illegal and, therefore, deserves to be quashed and set aside.
M/s. UCN Cable Network (P) Ltd. vs The Designated Committee under Sabka Vishwas Legacy Disputes Resolution Scheme, 2019
CITATION: 2022 TAXSCAN (HC) 195
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