Penalty on Co noticee is invalid when main case is settled under SVLDRS: CESTAT

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that a penalty on a co-noticee is invalid when the main case is settled under the SVLDRS (Sabka Vishwas (Legacy Dispute Resolution) Scheme). This decision provides significant relief, clarifying that if the primary tax dispute is resolved through a government amnesty scheme, ancillary penalties imposed on related parties should also be withdrawn. The SVLDRS aimed to clear legacy disputes. CESTAT’s ruling ensures that the benefits of such schemes extend comprehensively, preventing separate, ongoing penalties once the core issue has been mutually resolved, promoting finality in tax disputes.