2021 (4) TMI 317 - HC - Central Excise

Court denies petitioner's claim for benefits under Sabka Vishwas Scheme, 2019 citing disqualification clause.

The court ruled against the petitioner's claim for benefits under the Sabka Vishwas Scheme, 2019, based on the specific disqualification clause in Section ... Benefit of SVLDRS - SCN was issued for Recovery of amount refunded erroneously - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - benefit of scheme rejected by the designated committee holding that by virtue of provisions of Section 125(1) (d) of the Act of 2019, the petitioner is not eligible for benefits inasmuch as, the issue pertains to amount refunded erroneously - Sections 121 (c) & 125 (1) (d) of Finance Act, 2019 - HELD THAT:- Undoubtedly, Section 121(c) defines 'amount of arrears' means the amount of duty, which is recoverable as arrears of duty under the direct tax enactment in the situations specified. It in no manner deals with the amount of erroneous refund recoverable from the assessee. Moreover, the provisions of Section 125(1) (b) specifically exclude the persons from eligibility to make a declaration under the Scheme who have been issued a show cause notice under indirect tax enactment for erroneous refund or refund. Admittedly, after the SLP filed by the Revenue against the judgment dated 24.8.16 being allowed by the Supreme Court, a show cause notice was issued by the competent authority calling upon the petitioner to show cause and explain within 30 days of receipt of the notice as to why ₹ 26,80,834/- refunded to them erroneously should not be recovered from them alongwith interest at the prevailing rates under Section 11A & 11AB respectively of the Act of 1944, which culminated in passing of the order dated 30.11.17. In the considered opinion of this Court, by virtue of provisions of Section 125(1)(d) of the Act of 2019, a person who has been served with the notice to show cause under indirect tax enactment for an erroneous refund or refund shall be ineligible to make a declaration under the Scheme to claim benefits thereof and it does not make any difference that the notice to show cause issued stands culminated in passing of the order creating the demand of amount of erroneous refund. Petition dismissed. Issues:1. Eligibility for benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.2. Interpretation of provisions of Sections 121(c) and 125(1)(d) of the Finance Act, 2019.Analysis:Issue 1: Eligibility for benefits under the Sabka Vishwas Scheme, 2019The petitioner sought benefits under the Scheme of 2019 for a refund amount of Rs. 26,80,834, claiming it to be an amount in arrears under Section 121(c) of the Finance Act, 2019. The petitioner had a history of disputes regarding excise duty, penalties, and refunds dating back to 1997. Despite various legal proceedings and refund orders, the matter culminated in a final demand for the erroneously refunded amount. The petitioner argued that since the refund liability had attained finality, they should be eligible for benefits under the Scheme of 2019. Conversely, the respondents contended that the Scheme was not applicable to cases of erroneously made refunds. The court analyzed the provisions of Sections 121(c) and 125(1)(d) of the Act to determine the petitioner's eligibility.Issue 2: Interpretation of provisions of Sections 121(c) and 125(1)(d) of the Finance Act, 2019The court examined the definitions of 'amount in arrears' under Section 121(c) and the disqualifications under Section 125(1)(d) of the Act. Section 121(c) defines 'amount in arrears' as duty recoverable under indirect tax enactment in specific situations, excluding erroneous refunds. Section 125(1)(d) disqualifies declarants who have been issued a show cause notice for an erroneous refund or refund. The court noted that the petitioner had received a show cause notice for the erroneously refunded amount, leading to a final demand order. Despite the petitioner's arguments, the court concluded that the petitioner was ineligible for benefits under the Scheme due to the specific disqualification clause in Section 125(1)(d). The court emphasized that the finality of the demand for the erroneous refund did not change the ineligibility under the Act. Consequently, the court dismissed the writ petition, ruling against the petitioner's claim for benefits under the Scheme of 2019.In conclusion, the court's judgment clarified the ineligibility of the petitioner for benefits under the Sabka Vishwas Scheme, 2019, based on the specific provisions of the Finance Act, 2019.