AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2020 (11) TMI 156
X X X X Extracts X X X X
X X X X Extracts X X X X
....DRS-2 and SVLDRS-3 with the tax dues less tax relief amounts mentioned in the applications (declarations) filed by the petitioners in form SVLDRS-1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 4. Short point for consideration in all the three writ petitions is what would be the amount of tax dues in respect of the petitioners? Whether it would be the amount mentioned in the show cause-cum-demand notice or the amount determined by the adjudicating authority in the order in original which amount has been accepted by the department though the order in original has been set aside by the appellate forum? 5. For the sake of convenience we take up the facts and pleadings in Writ Petition No.818 of 2020 wherein the relevant figures in respect of the other two writ petitions are also mentioned. 6. Petitioner is a private limited company incorporated under the Companies Act, 1956 having its office at Malad (West), Mumbai. 7. The three petitioners were issued show cause-cum-demand notice dated 17.01.1992 from the office of Collector of Central Excise, Bombay-II on the allegation that petitioners had contravened provisions of the Central Excise Rules, 1944. In ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cceptance by the department as to the determination of the amounts due from the petitioners. 12. However, petitioners preferred appeals against the said order in original dated 29.03.2006 before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai (CESTAT) under section 35F of the Central Excise Act, 1944. In the appeals the principal prayer made was for setting aside that portion of the order in original dated 29.03.2006 passed by the Commissioner of Central Excise, Mumbai-V which was against the petitioners and thereby to allow the appeals in entirety with consequential reliefs. 13. CESTAT heard the appeals together and by the order dated 30.10.2017 remanded the matter back to the adjudicating authority to decide the issue on merit apart from quantification. CESTAT opined that when on the previous occasion Tribunal had remanded the matter for re- quantification the issue on merit was kept open. Remand was not confined to re-quantification but adjudication post remand was confined to quantification only. In such circumstances, CESTAT set aside the order in original dated 29.03.2006 and remanded the matter back to the adjudicating authority to pass a fresh order on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed percentage of tax dues. 16. In terms of the scheme, petitioners filed applications (declarations) under the category 'litigation' and sub-category 'show cause notice involving duty pending'. As per the declarations filed by the petitioners disputed tax dues were mentioned as Rs. 6,15,017.00, Rs. 10,12,375.00 and Rs. 2,66,193.00 as determined by the Commissioner in the order in original dated 29.03.2006. However, respondent No.2 i.e. the Designated Committee constituted under the scheme issued form SVLDRS-2 stating that the estimated amount payable by the applicants (declarants) were Rs. 66,18,763.00, Rs. 21,79,966.00 and Rs. 6,91,535.00 i.e. the amounts originally demanded in the show cause-cum-demand notice dated 17.01.1992. Though petitioners filed objections and personal hearing was granted, form SVLDRS-3 was issued reiterating the same amount as mentioned in form SVLDRS-2. 17. Aggrieved, the writ petitions have been filed seeking the reliefs as indicated above. 18. When the three writ petitions were moved before this court on 17th February, 2020, this court had passed the following order :- "2. These Petitions which have been filed on 15 February 2020 have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion we feel that affidavit of the respondents would be necessary. 6. Accordingly we direct respondents to file reply affidavit within three weeks from today. 7. Petitioners may file rejoinder affidavit thereafter." Thereafter separate but identical affidavits in reply were filed by the respondents through Mr. Sanjeev V. Chetule, Assistant Commissioner of Central Goods and Service Tax and Central Excise, Mumbai West, Commissionerate. 19. It is stated that petitioner had filed the declaration under section 125 of the scheme in respect of the show cause-cum-demand notice dated 17.01.1992. Show cause-cum-demand notice was adjudicated vide order in original dated 29.03.2006 (issued on 30.03.2006) by the Commissioner of Central Excise, Mumbai-V whereby the demand was partially confirmed to the extent of Rs. 6,15,017.00 as against the original demand of Rs. 66,18,763.00. As a matter of fact, the above order in original dated 30.03.2006 was passed on remand by the CEGAT, Mumbai vide order dated 28.03.1994. Appeal to CEGAT was made against the initial order in original dated 10.02.1993. 19.1 Against the order in original dated 29.03.2006 whereby the duty demanded ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m-demand notice. 19.7 Refuting the contention of the petitioner that its declaration should be categorized under litigation category, it is contended that as no appeal was pending against the subject order in original, the declarant is not entitled for relief in terms of the reduced amount of tax dues as mentioned in the order in original. Since the subject case has derived the status of pending show-cause notice, the total tax dues appearing in the show cause-cum-demand notice i.e. Rs. 94,90,264.00 has to be taken into consideration for giving any relief under the scheme and not Rs. 18,93,585.00 as claimed by the petitioners. In this connection, reliance has been placed on section 123, more particularly on clause (b) thereof. 20. Mr. Sridharan, learned counsel for the petitioner submits that entire approach of the respondents is wrong. Respondents have completely overlooked the primary objective of the scheme and adopted an approach which defeats the very purpose of this scheme. Idea behind the scheme is to unload the baggage of legacy litigations relating to service tax and excise. It is a beneficial provision intended to confer certain benefits on the declarants who are el....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad not concluded the adjudication on or before 30.06.2019. Therefore, the show cause-cum-demand notice was pending as on 30.06.2019. If that be so, then the amount of dues as per the show cause-cum-demand notice would be the tax dues. Accordingly, the Designated Committee rightly treated the amount of Rs. 66,18,763.00 in the case of the petitioner and total amount of Rs. 94,90,264.00 in respect of all the three petitioners as the tax dues. There is no infirmity in the view taken by the respondents. Accordingly, writ petitions should be dismissed. 22. Submissions made by learned counsel for the parties have been duly considered. Also perused the materials on record. 23. From the above narration and submissions it is evident that facts are not in dispute. However, for proper appreciation of the rival contentions and for arriving at a just conclusion, it would be apposite to highlight the undisputed facts culled out from the above which are relevant for adjudication. 24. The three petitioners were issued show cause-cum-demand notice by the Collector of Central Excise on 17.01.1992 raising the following demand against each one of them and collectively Rs. 94,90,264.00:- 1. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing authority while passing the order in original dated 29.03.2006 on remand had confined its adjudication only to quantification and did not go into the challenge made by the petitioners on merit, limitation, etc. The prayer was to set aside the offending portion of the order in original dated 29.03.2006 and grant relief to the petitioners in toto. This view point of the petitioners was accepted by the CESTAT and by order dated 30.10.2017, the matter was remanded back to the adjudicating authority to decide the issue on merit apart from quantification. To enable the adjudicating authority to pass a fresh order in original, CESTAT set aside the order in original dated 29.03.2006. 29. After the matter was remanded, adjudicating authority had not decided the matter and when the scheme was introduced the adjudication was pending as on 30.06.2019 which is the cut-off date. Respondents have taken the position that since the appellate authority had set aside the order in original dated 29.03.2006 the said order was not in existence as on 30.06.2019; what was in existence was the show cause notice dated 17.01.1992, besides there being no pending appeal. Therefore, the demand raised in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. As an incentive, those making the declaration and paying the declared tax verified and determined in terms of the scheme would be entitled to certain benefits in the form of waiver of interest, fine, penalty and immunity from prosecution. After a threadbare analysis of the relevant provisions of the scheme, this Court held that the basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. Focus is to unload this baggage of the pre- GST regime and allow business to move ahead. Therefore, a liberal interpretation has to be given to the scheme. This is the broad picture which the officials have to keep in mind while considering a declaration under the scheme seeking amnesty. The approach should be to ensure that the scheme is successful and therefore, a liberal view embedded with the principles of natural justice is called for. 34. Sections 120 to 135 of the Act comprises the scheme. Section 123 of the Act which is part of the scheme deals with tax dues. For ready reference, section 123 is extrac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (b) where a show cause notice under any of the indirect tax enactment has been received by the declarant on or before the 30th day of June, 2019, then, the amount of duty stated to be payable by the declarant in the said notice: Provided that if the said notice has been issued to the declarant and other persons making them jointly and severally liable for an amount, then, the amount indicated in the said notice as jointly and severally payable shall be taken to be the amount of duty payable by the declarant; (c) where an enquiry or investigation or audit is pending against the declarant, the amount of duty payable under any of the indirect tax enactment which has been quantified on or before the 30th day of June, 2019; (d) where the amount has been voluntarily disclosed by the declarant, then, the total amount of duty stated in the declaration; (e) where an amount in arrears relating to the declarant is due, the amount in arrears." 35. Section 123(a)(i) deals with a situation where a single appeal arising out of an order is pending as on 30.06.2019 before the appellate forum. In that case, the tax dues would mean the total amount of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8,93,585.00 would have been the determined tax dues of the petitioners, with break up thereof as under:- 1. M/s. Jyoti Plastic Works Private Limited (Petitioner in Writ Petition No.818 of 2020) Rs. 6,15,017.00 2. M/s. Jai Plastics (Petitioner in Writ Petition No.828 of 2020) Rs. 10,12,375.00 3. M/s. N. D. Patel (Petitioner in Writ Petition No.821 of 2020) Rs. 2,66,193.00 Total Rs. 18,93,585.00 38. Secondly, even after the petitioners had filed appeals and following the appellate order the matter has come back on remand, if the petitioners had not filed declarations under the scheme they would still have been better off with the total demand adjudicated at Rs. 18,93,585.00 as against the original demand of Rs. 94,90,264.00 in terms of the show cause-cum-demand notice. 39. The question which is begging consideration is whether the petitioners could be prejudiced or put in a worse off condition firstly by filing appeal before the CESTAT and secondly by filing declarations under the scheme? 40. In this connection we may refer to the maxim reformatio in peius. It is a latin phrase meaning a change towards the worse i.e., a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lenge. 27. As rightly contended by the learned counsel for the appellant, instead of addressing the issue, as to whether, the appellate authority had acted beyond the scope of the appeal, and exceeded in his jurisdiction, the Tribunal passed an order, impugned before us, elaborating, as to how, adjudication has to be done, with reference to the aspect of clandestine removal of raw materials, which in our considered opinion, is jurisdictionally erroneous. On the facts and circumstances of the case, we hold that the directions issued by the appellate authority and that of the Tribunal, run contrary to the principle of "no reformatio in peius"." 43. This decision was followed by the same High Court in Rajaram Johra Vs. Commissioner of Customs (Airport & Cargo), 2019 (365) E.L.T. 424 in the following words:- "11. The Court held that had the assessee not filed an appeal, they would not be placed in a situation of inviting an adverse order on the aspect of clandestine removal. A party, who files an appeal, expects that the appellate authority would only address the grounds of appeal made against the order impugned and the appellant does not expect the appellate autho....