2003 (4) TMI 113 - SC - Central Excise

Supreme Court Upholds Order Rejecting Declaration Under Tax Scheme

The Supreme Court upheld the impugned order, dismissing the appeal and finding no fault in the rejection of the appellants' declaration under the Kar ... Whether, on 14th July, 1995, there is an order of adjudication? - Held that:- The High Court, in the impugned judgment, has held that the demand made earlier is confirmed and therefore there is an adjudication. We are in agreement with the view expressed by the High Court. The order dated 14th July, 1995 makes it clear that a personal hearing was given on 22nd June, 1995. It sets out what has already been paid. Then it calls upon the appellants to pay the balance amount. Thus, there has been adjudication and there is a demand. It may be that this order is not in the format prescribed. It may also be that principles of natural justice were not followed but those are grounds on which the order could have been challenged. In fact, these grounds were taken in the writ petition. However, those grounds were not pressed. We have, therefore, not looked into these aspects and express no opinion thereon. Whether the appellants are entitled to the benefit of the Kar Vivad Samadhan Scheme? - Held that:- Section 95 of the Scheme makes it clear that in cases where no appeal or reference or writ petition is admitted or pending before the Appellate Court or the High Court or the Supreme Court and where no application for revision is made before the Central Government, the Scheme is not to apply. In this case, admittedly, on the due date i.e. 31st March, 1998 there was no pending appeal, reference or writ petition or application. Under these circumstances, the declaration was correctly rejected. Appeal dismissed. Issues:- Whether the letter dated 14th July, 1995 constitutes an order of adjudication.- Whether the rejection of the appellants' declaration under the Kar Vivad Samadhan Scheme was correct.Analysis:1. Adjudication Order: The main issue before the Supreme Court was to determine whether the letter dated 14th July, 1995 amounted to an order of adjudication. The appellants argued that the letter was merely an information letter providing particulars of demand, not a formal adjudication order as per the Central Excise Act. They contended that no re-evaluation as per the court guidelines had taken place. However, the High Court held that the demand made earlier was confirmed, indicating an adjudication had occurred. The Supreme Court agreed with the High Court's view, emphasizing that the letter detailed a personal hearing, previous payments, and a call for the balance amount, constituting an adjudication, even if not in the prescribed format or following all principles of natural justice.2. Kar Vivad Samadhan Scheme Rejection: The appellants had filed a declaration under the Kar Vivad Samadhan Scheme, which was rejected on the grounds that adjudication had already occurred, and the tax arrears were not in dispute when the declaration was filed. The appellants challenged this rejection in a writ petition, arguing that the letter of 14th July, 1995 was not an adjudication order and should not bar them from the scheme. However, the Supreme Court noted that as of the due date, there were no pending appeals, references, or writ petitions, rendering the rejection of the declaration valid under Section 95 of the Scheme.In conclusion, the Supreme Court upheld the impugned order, dismissing the appeal and finding no fault in the rejection of the appellants' declaration under the Kar Vivad Samadhan Scheme. The Court affirmed that the letter dated 14th July, 1995 constituted an order of adjudication, despite not following all formalities, and that the rejection of the declaration was justified based on the lack of pending legal actions as required by the Scheme.