The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the co-noticee eligible to seek waiver of penalty under Sabka Vishwas Scheme, 2019 if main noticee is issued discharge certificate.

The bench of Binu Tamta (Judicial Member) has observed that after the main noticee was issued the discharge certificate under the SVLDR Scheme, 2019 towards the duty liability the co-noticee had not filed the declaration but was held to be entitled to the waiver of penalty as non-filing of the declaration was held to be merely a procedural flaw for which the appellant cannot be burdened with the liability of penalty more so since there was no loss to the revenue.

The appellant/assessee is in the business of trading of food grades/chemicals, raw materials, like flavour, Chocolate Powder, Colour, etc. Show cause notice alleged that both the appellants had supplied raw material to M/s Asha Food Products and other related concerns which was used in the manufacture of excisable goods cleared clandestinely and therefore penalty under rule 26 of Rules was proposed against the appellant. 

The Commissioner, CGST Central Excise, Indore by the order, confirmed the demand of penalty of Rs. 10 lakhs against the appellants in terms of rule 26. 

The tribunal held that once the main noticees have filed the declaration under the scheme and have deposited the duty required to be paid under the Sabka Vishwas Scheme, 2019 and Discharge Certificate has been issued by the department, thereafter the co-notices are eligible to seek waiver of penalty under the scheme by filing a declaration has been considered in series of decisions by this Tribunal.

The tribunal held that appellant have also not filed the declaration after the main noticees have been issued Discharge Certificate towards the duty liability but the fact remains that if the appellant had applied under the SVLDR Scheme, they would have paid “nil‟ rate of duty in view of the relief available to them under section 124 (i) (b)of the Finance Act, 1994.

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Case Details

Case Title: Shri Ravi Seswani Versus Commissioner, Cgst & Central Excise – Indore

Case No.: Excise Appeal No. 51142 Of 2020

Date: 22/01/2025

Counsel For Appellant: Ankur Upadhyay

Counsel For Respondent: M.K. Chawda