TaxTMI 
TaxTMI 
2021 (2) TMI 252
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....ka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter referred to as "Scheme, 2019") for settlement of excise duty as conveyed by letters dated 05.05.2020 and 11.06.2020 and further challenging the legality of the statement issued in Form­ SVLDRS-­2 dated 07.02.2020 issued by respondent No.1 and seeks further direction to process the declaration made by the petitioner in Form SVLDRS-­1. 3. The reliefs as sought for by the petitioner read as under: "(a) issue a writ of Certiorari, or a writ in the nature of Certiorari calling for the records in the impugned statement in Form SVLDRS­-2 dated 07.02.2020 to quash the same as illegal and pass such further orders; (b) issue a writ of Certiorari, or a writ in the nature of Certiorari calling for the records in the first impugned rejection letter dated 05.02.2020 to quash the same as illegal and pass such further orders; (c) issue a writ of Certiorari or a writ in the nature of Certiorari calling for the records in the second impugned rejection letter dated 11.06.2020 to quash the same as illegal and pass such further orders; (d) issue a writ of Mandamus, or direction as the....
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....d and as per the details furnished by you, the total duty liability comes to Rs. 3,65,913/­ (Details are attached as per Annexure­-D). You are requested to submit sample copies of related documents, if any. 5. During the course of verification of Sales Bills it is noticed that you have cleared scrap of used packaging materials (viz. Empty MS/Plastic drums/Bottle, corrugated, cartons, wooden pellets etc.) without payment of any Central Excise Duty. As per Rule 6 of Cenvat Credit Rules,2004 as amended vide Notification No.6/2015­CE­NT dated 01.03.201, you were required to pay Central Excise Duty @ 6 %. As per details provided by you e­mail, the duty liability on such clearance comes to Rs. 7,32,181/­ as detailed in Annexure­E. You are requested to submit the sample copies of the invoices for such clearance. 6. During sample check of the cenvat credit documents for (Dec­16 and Apr­Jun, 2017), it is noticed that you have availed excess cenvat credit of Rs. 62,831/­ as detailed in Annexure­F. 7. Please provides the details of input service Credit availed, if any in respect of following input services for the audit pe....
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.... 9. In the aforesaid factual backdrop, the writ applicant being aggrieved by the actions of the respondent No.1 has come up before this Court by way of present writ application seeking the relief as indicated above. 10. Respondent No.1 in their affidavit in reply taken a stand that, the letter dated 28.06.2019 was an interim letter and quantification of duty involved was still not finally determined as there were further development of draft audit report dated 20.09.2019 and there was a variance between the amount mentioned in the interim letter and the draft audit report. In this circumstances, the amount determined in the letter dated 28.06.2019 cannot be construed as qualification of "tax dues" prior to 30.06.2019. In nut­shell, stand of the respondent No.1 is that, the quantum of tax dues payable by the petitioner was not finalized before 30.06.2019, as a result, the petitioner is ineligible to make a declaration under the Scheme, 2019. 11. Learned Counsel Mr. Sujit Ghosh appearing for the writ applicant raised the following contentions :­ (a) It is submitted that, the respondent No.1 has acted contrary to the objective of the scheme and the petitioner....
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....e Act read with Rule 6(2) of the SVLDRS Rules, further submits that, if the amount estimated by the designated committee, exceed the amount declared by the declarant, then the committee is required to issue Form SVLDRS­-2 indicating the amount payable, as per Section 127 (2) of the Finance Act read with Rule 6(3) of the SVLDRS Rules. He further submits that, the amount estimated by the Designated Committee was Rs. 1,22,18,781.05/­ and the same was declared by the petitioner in Form SVLDRS-­1 and accordingly, the petitioner agreed with the demand estimated by the respondent No.1 by submitting Form SVLDRS­-2A dated 10.02.2020. Therefore, it is submitted that, as per Section 127 (2) of the Finance Act, the Designated Committee is empowered to issue Form SVLDRS­-2 only when the estimated amount exceed the amount declared by the applicant. It is further submitted that, the amount declared by the petitioner in Form SVLDRS-­1 matches with the amount payable estimated by the Designated Committee. Therefore, as per the mandate of the Scheme, the issuance of Form SVLDRS­-2 by the authority is in utter disregards of the provisions of the Scheme and it is liable to ....
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....the ample opportunity of hearing was afforded to the petitioner, however, the petitioner could not clarify the note appended with the Form SVLDRS­-2 with regard to variance of the amount mentioned in the draft audit report and letter dated 28.06.2019. Therefore, no any error had been committed by the authority on the ground of eligibility while rejecting the application. 13. Mr. Lodha would contend that, in the aforesaid circumstances, the petition being devoid of merits and the same may be dismissed. 14. We have heard learned counsel appearing for the respective parties at length and perused the materials placed on record. 15. Before adverting to the rival contentions advanced by both the sides, it is relevant to refer to the relevant provisions and procedure to be followed under the Scheme, 2019. a) The scheme was introduced by the Finance (No.2) Act, 2019 and notified on 01.08.2019 and was brought into force by way of Notification dated 21.08.2019. b) The scheme was introduced with the objective of resolution and settlement of legacy cases of Central Excise and Services Act. c) Sections 120 to 135 under Chapter 5 of the Act, contains the d....
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....ore the 30th day of June, 2019; (f) a person making a voluntary disclosure,- (i) after being subjected to any enquiry or investigation or audit; or (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." j) Section 127 of the Act empowers the Designated Committee to issue the statement in a prescribed form as provided under the Sabka Vikas (Legacy Dispute Resolution) Scheme Rules, 2019, which reads as under: "127. (1) Where the amount estimated to be payable by the declarant, as estimated by the designated committee, equals the amount declared by the declarant, then, the designated committee shall issue in electronic form, a statement, indicating the amount payable by the declarant, within a period of si....
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....n available records. [Rule 4] (f) Lastly, the Designated Committee on being satisfied that, the declarant has paid in full amount as indicated in Form SVLDRS­-3, shall issue discharge certificate in Form SVLDRS [Rule 9]. 17. We have considered the submissions made by both the sides and the materials on record. 18. We take notice of the following facts which are not in dispute between the parties: (1) The audit was undertaken by the respondent No.1 for a period from June, 2014 to June 2017 and accordingly, during the course of audit, by way of communication dated 28.06.2019, the tax liability under the different head was fixed to the tune of Rs. 2,52,95,051/­ and in the same letter, it was directed to discharge the same at the earliest. (2) On the basis of amount fixed by the authority, the writ petitioner had submitted an application through online in Form SVLDRS-­1 declaring an amount of Rs. 1,22,18,781.50/­ as being the amount payable towards the tax. (3) The Designated Committee under Sub­-section (2) of Section 127 of the Act, determined the amount Rs. 1,22,18,781.05/­ payable by the petitioner, which was equival....
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....igation or audit was still continued. Thus, before the cut­off date i.e. 30.06.2019, the respondent No.1 had quantified and communicated the amount of duty involved during the audit undertaken by the respondent No.1. Referring to the letter dated 28.06.2019, it evident that, the respondent No.1 had directed to the writ applicant to pay the amount determined in the letter at the earliest, which shows that the amount of duty payable by the writ applicant was quantified on or before 30.06.2019. It is required to be noted that, at the time of issuing the letter dated 28.06.2019, there is no any whisper by the authority that, the amount fixed as a duty was subject to further audit. We also take the notice of the fact that, while issuing statement in Form SVLDRS­-2, after considering the declaration made by the writ applicant, the amount payable Rs. 1,22,18,781.05/­ determined and estimated by the authority and the same amount reflected in the impugned Form SVLDRS­-2. Therefore, at the one hand, while issuing statement in Form SVLDRS­-2 by the Designated Committee estimated the amount equal to the amount declared by the writ applicant in Form SVLDRS-­1 i.e. Rs. 1,....
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....eclared by the declarant, then, the Designated Committee shall issue a statement in Form SVLDRS­-3 indicating the amount payable by the declarant. Whereas, Sub­-section (2) of Section 127 provides that, where the amount estimated by the Designated Committee exceed the amount declared by the declarant, then, the committee shall issue statement in Form SVLDRS­-2. In this circumstances, before insisting on payment of the excess amount or higher amount, then the Designated Committee is required to give an opportunity of hearing. The Section 127 further provides that, after hearing the declarant, a statement in electronic Form indicating the amount payable by the declarant shall require to be issued. 24. Reverting back to the facts of the present case, after filing the application in statement in form SVLDRS-­1 intimating the total tax dues of Rs. 2,52 95,051/­ based on the amounts quantified and communicated to the writ applicant by letter dated 28.06.2019, the net amount payable by the writ applicant was mentioned Rs. 1,22,18,781.05/­ and in response to the declaration, the Designated committee had estimated the same amount declared by the writ applicant and....
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....tion of the respondent No.1 issuing statement in Form SVLDRS­-2 is in contravention of the Section 127 (1) read with Rule 6 (2). 28. Now, let us deal with the contention with regard to the rejection of the application vide letters dated 05.05.2020 and 11.06.2020. According to the case of writ applicant, the decision of rejecting was without affording any opportunity of hearing to the writ applicant and would be in violation of principles of natural justice. 29. Before deal with the issue, let us examine the decision of rejection reflected in the impugned communications dated 05.05.2020 and 11.06.2020, which reads as under: "To, M/s. E I DUPONT INDIA PRIVATE LIMITED Plot no.11, Manjusar, Vadodara, Email Address: venkat­[email protected] Gentleman, Subject: Intimation regarding rejection of SVLDRS application m/reg. In reference to the above mentioned subject, it is to mention that under the Sabka Vishwa Legacy Dispute resolution Scheme, 2019 (SVLRDS) an application was filed by you with following details: ARN No.LD2712190002906 Dated­27­12­2019, Category­Investigation, Enquiry or Audit. On....
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....ned on the issue of variance of the amount while rejecting the application. It is required to be noted that, the amount of variance with regard to quantification having not specifically mentioned in the statement in form SVLDRS­-2, nor being stated in the rejection application. Had the respondent No.1 provided the varied estimate in the statement in Form SVLDRS­-2, the writ applicant would have submitted their response and sought a personal hearing. It is pertinent to note that, against the rejection of the letter dated 05.05.2020, the writ applicant had requested twice for process of the application. However, the respondent No.1 did not have assign any reason with regard to varied amount. Therefore, the whole process undertaken in this case was not fair and the mechanical rejection of the application is against the settled principles of natural justice. It is settled that, any order which has civil consequences must be passed after giving an opportunity to be heard. In this regard, we may refer to the case of Prakash Vs. State of Bihar [2009 (4) SCC 690), wherein the Apex Court has observed as under: "If there is a power to decide and decide detrimentally to the p....