Bill of Entry endorsement as notice of demand under a tax settlement scheme entitled the assessee to relief.

For purposes of the Kar Vivad Samadhan Scheme, a quantified and served endorsement on a Bill of Entry calling for payment of additional customs duty amounted to a notice of demand, even though it was not issued through a formal show-cause adjudication. The Scheme was aimed at settling unpaid quantified tax arrears, so Section 95(ii)(b) did not bar the assessee. The earlier writ petition was treated as not finally concluded in a practical sense relevant to the Scheme, and Section 95(ii)(c) also did not prevent eligibility. The declaration was therefore entitled to the statutory benefit sought.

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Issues: (i) Whether an endorsement on the Bill of Entry calling upon the importer to pay additional customs duty constituted a notice of demand so as to attract Section 95(ii)(b) of the Kar Vivad Samadhan Scheme; (ii) Whether the earlier writ petition was still pending for the purpose of Section 95(ii)(c) of the Scheme.

Issue (i): Whether an endorsement on the Bill of Entry calling upon the importer to pay additional customs duty constituted a notice of demand so as to attract Section 95(ii)(b) of the Kar Vivad Samadhan Scheme.

Analysis: The Scheme in Sections 87, 88 and 95 of the Finance (No. 2) Act, 1998 was meant to settle quantified tax arrears that remained unpaid by the relevant date. The endorsement on the Bill of Entry quantified the duty, required payment within the stipulated time, and was served on the importer in the manner recognised by the Customs Act. The fact that the demand was raised through endorsement rather than a formal show-cause process did not detract from its character as a demand for payment of duty.

Conclusion: The endorsement on the Bill of Entry constituted a notice of demand, and Section 95(ii)(b) was not attracted against the assessee.

Issue (ii): Whether the earlier writ petition was still pending for the purpose of Section 95(ii)(c) of the Kar Vivad Samadhan Scheme.

Analysis: The writ petition had been disposed of with the matter made to abide by the result of the Revenue's pending appeal in a similar case. The challenge was therefore not finally concluded in the practical sense relevant to the Scheme. In any event, the Revenue had not rejected the declaration on this ground and the contention was not pressed with force before the Court.

Conclusion: Section 95(ii)(c) did not bar the assessee from availing the Scheme.

Final Conclusion: The declaration was eligible under the Kar Vivad Samadhan Scheme, and the assessee was entitled to the statutory benefit sought.

Ratio Decidendi: For the purpose of a settlement scheme for tax arrears, a quantified and served demand raised through endorsement on a Bill of Entry can amount to a notice of demand even without a formal show-cause adjudication, where the amount remains unpaid on the relevant date.

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