Penalty on Co-Noticee Not Maintainable if Main Noticee Settles Tax Dues nder SVLDRS, 2019: CESTAT [Read Order]
The tribunal referring to its earlier decision in M/s. Phenix Construction Technologies, the Tribunal held that the penalty imposed on the assessee was not sustainable and sets aside
![Penalty on Co-Noticee Not Maintainable if Main Noticee Settles Tax Dues nder SVLDRS, 2019: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/Quantum-assessment-1.jpg "Penalty on Co-Noticee Not Maintainable if Main Noticee Settles Tax Dues nder SVLDRS, 2019: CESTAT [Read Order]")
The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) penalty on a co-noticee is not maintainable if the main noticee settles tax dues under Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS), 2019. Are You GST Compliant? Get the Clarity You Need on RCM - Click here Brijeshkumar Pravin Bhai Patel,appellant-assessee,was issued a show cause notice...
The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) penalty on a co-noticee is not maintainable if the main noticee settles tax dues under Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS), 2019.
Are You GST Compliant? Get the Clarity You Need on RCM - Click here
Brijeshkumar Pravin Bhai Patel,appellant-assessee,was issued a show cause notice along with M/s. Brij Construction Company for service tax demand. A separate notice was issued to him for penalty. The Joint Commissioner, through order dated 16.02.2017, confirmed the demand, ordered recovery from the company, and imposed a penalty of Rs. one lakh each on the partners, including the assessee.
The assessee counsel argued that the case of M/s. Brij Construction Company had already been settled under SVLDRS-2019 as per the Tribunal’s Final Order dated 02.03.2021. He also submitted the relevant settlement documents.
In response, the departmental counsel acknowledged the settlement of M/s. Brij Construction Company’s case but argued that the appellant remained liable for penalty under Section 78A(a) of the Finance Act, 1994.
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A single member bench of Dr.Ajaya Krishna Vishvesha(Judicial Member) heard both sides and examined the records. It noted that in similar cases, once the main noticee’s service tax demand was settled under SVLDRS, 2019, the penalty on the co-noticee did not hold. Referring to its earlier decision in M/s. Phenix Construction Technologies, the CESTAT held that the penalty of Rs. one lakh imposed on the assessee under was not sustainable and set it aside.
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In short,the appeal is allowed.
To Read the full text of the Order CLICK HERE
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