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2019 (12) TMI 1217
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....st which appeals are pending before the appellate forum, submitted requisite declarations under the Scheme. Separate notices were served upon the petitioners by the Designated Committee calling upon them to show cause as to why the declarations should not be treated as void as the Scheme permits waiver of duty, interest and penalty, but not fine in lieu of confiscation. 3. After hearing the petitioners, the Designated Committee has held that the cases involving confiscation and redemption fine have not been covered under the Scheme and, therefore, the declarations cannot be accepted and no relief can be granted to the petitioners under the Scheme. 4. Mr. Paresh Dave, learned advocate for the petitioners submitted that the dispute involved in this case is, whether or not, waiver from payment of redemption fine is allowed under the Scheme. It was submitted that the Designated Committee has rejected the declarations made by the petitioners on the ground that no relief as regards confiscation and redemption fine has been allowed under the Scheme, and, therefore, the entire matter covered under the declarations cannot be accepted. It was submitted that the petitioners' submission ....
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....so satisfied in the present cases and the cutoff date of 30th June, 2019 is also not violated in the present cases. It was urged that since all qualifying conditions are satisfied and no exclusion of section 125 of the Finance Act is attracted, the declarations of the petitioners herein cannot be treated as void, and hence, ought not to have been rejected. 4.3 Next, it was submitted that section 129(1) of the Finance Act lays down under clause (a) that the declarant shall not be liable to pay any further duty, interest or penalty. It was submitted that since the declarations made by the petitioners are maintainable under the Scheme, this relief can certainly be granted to them. It was contended that under clause (b) of the section, immunity from prosecution is allowed. Such relief can also be granted to the petitioners because their declarations are maintainable under the Scheme. It was submitted that under section 129(1) and also clause (c) thereof, the discharge certificate is conclusive as to the "matter" and time period stated in the declaration, and no "matter" and time period covered by such declaration shall be reopened in any other proceeding. It was submitted that a dec....
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....rnment has issued Circular No.1072/05/2019-CX dated 25th September, 2019 laying down at para 2(ii) that the procedure laid down in Circular No.1009/16/2015-CX dated 23.10.2015 should be followed for withdrawal of prosecution after issuance of discharge certificate, if prosecution has already been launched. Vide para 10.2 of the other Circular dated 23.10.2015, it is provided that the appropriate Commissioner shall give direction to file an application through the Public Prosecutor to allow withdrawal of the prosecution. It was submitted that the procedure laid down for withdrawal of prosecution shows that a criminal case is to be withdrawn before its conclusion, that is, before it results in sentence of imprisonment or fine. It was submitted that the letter now issued on 20th December, 2019, is for waiver from fine under section 9 of the Act, but there is no question of waiver of such fine, which is not even ordered by the criminal court. It was contended that the excise authorities cannot waive "fine" if imposed by a competent criminal court and, therefore, the immunity from prosecution can be allowed under the Scheme only when no prosecution is instituted, or the prosecution alre....
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....ties, the waiver of redemption fine has to be read under section 129(1)(c) of the Finance Act. 4.9 Reference was made to para 3(b) of the letter dated 20th December, 2019, to submit that the Ministry's stand is that a show cause notice involving redemption fine is excluded if it was not adjudicated and the redemption fine quantified under the adjudication order was not paid by the declarant before lodging the declaration. It was submitted that getting a notice pending on 30th June, 2019 to be adjudicated and paying redemption fine imposed under the order-in-original is a virtually impossible exercise for a declarant; and when section 123(b) specifically provides that a show cause notice received on or before the 30th June, 2019 can also be settled under the Scheme because the duty stated to be payable in such notice was "tax dues", such cases cannot be excluded from the Scheme only because such show cause notice may involve a possible liability of confiscation and redemption fine upon its adjudication. It was submitted that in case of a pending show cause notice also, the declarant can file a declaration under the Scheme and discharge its liabilities by paying 30%, or 50%, as th....
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.... to seven years of imprisonment and fine. Needless to say that once the person is granted immunity from prosecution, he also gets waiver from such 'fine'. However, redemption fine is levied in lieu of confiscation Section 34 of the Act, whereby the party can 'redeem' the confiscated goods. Under the Scheme, no immunity (Section 129) or relief (Section 124) has been granted for redemption fine. 3. A 'case' under the Scheme means 'a show cause notice, or one or more appeals arising out of such notice which is pending as on 30.06.2019' [Explanation to rule 3, SVLDRS Rules, 2019]. In the instant case, the SCNs also involve imposition of redemption fine. There are two scenarios that can emerge; (a) The SCN involving redemption fine has been adjudicated. In this case, redemption fine has been imposed and quantified. (b) The SCN involving redemption fine is yet to be adjudicated. In other words, the redemption fine has not been imposed or quantified. The discharge certificate [Section 129] which is issued at the end of the proceedings under the Scheme is a full and final closure of the matter and time period stated therein. Therefore, the discharge cert....
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.... (ii)having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it; (g) who have filed an application in the Settlement Commission for settlement of a case; (h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944. (2) A declaration under sub-section (1) shall be made in such electronic form as may be prescribed." 8. On a plain reading of clauses (a) to (h) of section 125 of the Finance Act, it is abundantly clear that persons whose cases involve confiscation and fine in lieu of confiscation are not placed in the categories of persons who are not eligible to make declarations under the Scheme. Thus, persons who have been ordered to pay fine in lieu of confiscation or to whom show cause notices proposing confiscation of goods have been issued, have not been declared to be ineligible to make a declaration under the Scheme. 9. Sub-section (1) section 129 of the Finance Act provides that every discharge certificate issued under section 126 thereof with respect to the amount payable under the Scheme s....
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....ted that in the communication dated 20th December, 2019 of the Board, the contents whereof have been reproduced hereinabove, it has been stated that when a person gets immunity from prosecution, he also gets waiver of such fine for the offences under section 9 of the Central Excise Act, 1944. Thus, it is not the case of the Board that the Scheme does not provide for waiver of fine, but only that it does not provide for waiver of redemption fine. Testing the explanation put forth by the Board in the context of the relevant statutory provisions, section 9 of the Central Excise Act, 1944 specifies the categories of offences and the punishment thereunder, which may be punishable with imprisonment and fine or imprisonment or fine. Thus, the question of imposing fine arises only upon conviction for an offence specified in section 9 of the Central Excise Act. However, clause (b) of section 125 of the Finance Act, clearly excludes persons who have been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file declaration. As a necessary corollary therefore, it follows that the legislature would not have contemplated w....