TaxTMI 
TaxTMI 
2021 (9) TMI 154
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.... According to the petitioners, the net EAP amount should have been computed at Rs. 15,37,816.00 against the total disputed 'tax dues' Rs. 80,75,626/- only, after adjusting the amount of Rs. 25,00,000/- pre-deposited by the petitioners to maintain their appeals, filed earlier. A further consequential mandamus has been sought, effectively to issue the final SVLDRS-3, etc. Last, challenge has been raised to the adjudication order dated 30.12.2019 passed, pending the proceedings under the Scheme. 3. Undisputedly, the petitioners were earlier issued a Show Cause Notice dated 05.06.2015 proposing a demand of central excise duty, Rs. 1,40,22,111/-, under the Central Excise Act, 1944 (hereinafter referred to as 'the Act'). That proceeding culminated in the Order-in- Original dated 26.09.2016. Thereby, the central excise duty demand was confirmed at Rs. 80,75,626/- only. Thus, the central excise demand, Rs. 59,46,648/-, as proposed by the Show Cause Notice dated 5.6.2015 was not confirmed by the Adjudicating Authority under the Act. Against the order dated 26.09.2016, the two petitioners filed their individual appeals before the Customs, Excise and Service Tax Appellate Tribunal ....
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....led by petitioner no. 1 came to be allowed by the Tribunal, on 7.1.2020. The Tribunal clarified that the subject matter of adjudication proceedings (in remand), pending before the Adjudicating Authority, was only with respect to the proposed demand Rs. 80,75,626/-, as no appeal had been filed by the revenue against the Order-in-Original dated 26.09.2016. 8. On 30.12.2019, respondent no.3 passed the Order-in-Original, ostensibly in compliance of the Tribunal's order dated 15.5.2019 and adjudicated the Show Cause Notice dated 5.6.2015, on merits. It confirmed the disputed duty liability of the petitioner at Rs. 80,75,626/- and dropped the duty liability to the extent Rs. 59,46,648/-. 9. The Scheme that was to originally expire on 31.12.2019, was extended by the Central Government up to 15.01.2020. On 31.12.2019, the petitioner no.1 filed a (second) declaration disclosing the 'tax dues' Rs. 80,75,626/-, under the case category 'Arrears'. The (second) declaration filed was also processed by the Designated Committee and accordingly, on 17.01.2020, a second estimate of EAP was issued to the petitioner on form SVLDRS-2, computing that demand at Rs. 58,45,379.20. Admitted....
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.... internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of thirty days from the date of issue of such statement.) of the Scheme, the petitioner no. 1 had time till 03.01.2020 to deposit the net EAP amount communicated to it vide the (first) SVLDRS-2, issued on 04.12.2019, or to object to the same under section 127(3) (127(3) After the issue of the estimate under sub-section (2), the designated committee shall give an opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by the declarant: Provided that on sufficient cause being shown by the declarant, only one adjournment may be granted by the designated committee.) read with section 127(4) (127(4) After hearing the declarant, a statement in electronic form indicating the amount payable by the declarant, shall be issued within a period of sixty days from the date of receipt of the declaration.) of the Scheme. If deposited, it would foreclose the decision in the pending adjudication proceeding. It is so, because, under section 127(6) (127(6) Where the declarant has filed an appeal or referenc....
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....t, 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.) read with section 124 (124. Relief available under Scheme. (1) Subject to the conditions specified in sub-section (2), the relief available to a declarant under this Scheme shall be calculated as follows:- (a) where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on the 30th day of June, 2019, and if the amount of duty is,- (i) rupees fifty lakhs or less, then, seventy per cent of the tax dues; (ii) more than rupees fifty lakhs, then, fifty per cent of the tax dues; (b) where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil, then, the entire amount of late fee or penalty; (c) where the tax dues are relatable to an amount in arrears and,- (i) the amount of duty is, rupees fifty lakhs or less, then, sixty per cent of the tax dues; (ii) the amount of duty is more than rupees fifty lakhs, then, fort....
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....nce of any statutory intent to allow for change of case category from 'Litigation' to 'Arrears' or to redetermine of the 'tax dues' and EAP upon an adjudication order coming into existence during the pendency of proceedings under the Scheme. Therefore, once the petitioner had (rightly) filed the (first) declaration on 10.10.2019 under the case category 'Litigation', determination of the EAP amount would be governed accordingly. It cannot be changed, thereafter. 15. Also, by virtue of section 127(8) (127(8) On payment of the amount indicated in the statement of the designated committee and production of proof of withdrawal of appeal, wherever applicable, the designated committee shall issue a discharge certificate in electronic form, within thirty days of the said payment and production of proof.) read with Section 129(1)(a) (129. Issue of discharge certificate to be conclusive of matter and time period. (1) Every discharge certificate issued under section 126 with respect to the amount payable under this Scheme shall be conslusive as to the matter and time period stated therein, and - (a) the declarant shall not be liable to pay any further duty, interest, or penalty wi....
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....l not be liable to pay any further duty, interest, or penalty with respect to the matter and time period covered in the declaration;) of the Scheme. Here also, if we allow the Adjudicating Authority to conclude an adjudication proceeding during the pendency of a Discharge Certificate proceeding, it would run contrary to the intention of the Scheme to bring an end to the disputes under the Act. Any interpretation given to the Scheme as may defeat its purpose and object of the reform, must therefore be rejected. A purposive interpretation must therefore be adopted. 18. Then, under section 127(5) (127(5) The declarant shall pay electronically through internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of thirty days from the date of issue of such statement.) read with Rule 6(2) (Rule 6 Verification by designated committee and issue of estimate, etc.- (1)........ (2) The statement under sub-sections (1) and (4) of section 127, as the case may be, shall be issued by the designated committee electronically, within a period of sixty days from the date of receipt of the declaration under sub-rule (1)....
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.... have been kept in abeyance till the conclusion of the proceedings under the Scheme. We cannot contemplate, what useful purpose could be served by continuing and concluding the adjudication proceeding during the pendency of the proceedings arising upon filing of the (first) declaration on SVLDRS-1, under the Scheme, on 30.10.2019. In fact, by their conduct the authorities under the Act could not have defeated the object of an otherwise valid proceedings under the Scheme. 20. That said, we are unable to reach a conclusion that the respondent no. 3 lacked inherent jurisdiction to pass the Order-in- Original dated 30.12.2019. As discussed above, we conclude that the said order was tainted with impropriety, to the extent that order was passed during thirty (30) days from issuance of the SVLDRS-2 on 04.12.2019. Therefore, in the first place, it could not have been enforced till 03.01.2020, in view of the language of section 127(2) (127(2) Where the amount estimated to be payable by the declarant, as estimated by the designated committee, exceeds the amount declared by the declarant, then, the designated committee shall issue in electronic form, an estimated of the amount payable by t....
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....ittee electronically, within a period of sixty days from the date of receipt of the declaration under sub-rule (1) of rule 3, in Form SVLDRS-3 setting forth therein the particulars of the amount payable: Provided that no such statement shall be issued in a case where the amount payable, as determined by the designated committee is nil and there is no appeal pending in a High Court or the Supreme Court.) of the Rules. Since no communication was made to the petitioners on SVLDRS-3, the time provided under section 127(5) (127(5) The declarant shall pay electronically through internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of thirty days from the date of issue of such statement.) of the Scheme has not started running, yet. Therefore, the proceedings arising from the (first) declaration filed by the petitioner dated 30.10.2019 are still pending under the Scheme. 23. In absence of any consequence of abatement etc. being prescribed either by the Scheme or the Rules, the time limit of sixty (60) days under section 127(4) (127(4) After hearing the declarant, a statement in electronic form indicating the am....
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....a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he has admitted a tax liability but not paid it;) read with section 123(a)(i) (123. Tax dues. For the purposes of the Scheme, "tax dues" means - (a) where- (i) a single appeal arising out of an order is pending as on the 30th day of June, 2019 before the appellate forum, the total amount of duty which is being disputed in the said appeal; (ii) more than one appeal arising out of an order, one by the declarant and the other being a departmental appeal, which are pending as on the 30th day of June, 2019 before the appellate forum, the sum of the amount of duty which is being disputed by the declarant in his appeal and the amount of duty being disputed in the departmental appeal: Provided that nothing contained in the above clauses shall be applicable where such an appeal has been heard finally on or before the 30th day of June, 2019. Illustration 1:....................... Illustration 2: ..................... Illustration 3: ...................... Illustration 4: ...................... (b) where a show cause not....
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....ce a valid (first) declaration dated 30.10.2019 had been filed on SVLDRS-1, it had to be processed by the Designated Committee. In fact, that Committee did not accept the petitioner's disclosure thus made. Accordingly, it issued demand of EAP on SVLDRS-2 on 04.12.2019 and fixed 06.12.2019 as the date for the post-decisional hearing, in terms of section 127(3) (127(3) After the issue of the estimate under sub-section (2), the designated committee shall give an opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by the declarant:) Provided that on sufficient cause being shown by the declarant, only one adjournment may be granted by the designated committee. of the Scheme. The Designated Committee also took on record written objections/arguments filed by the petitioners dated 09.12.2019 and 26.12.2019 and it also appears to have heard the matter at some length. However, it did not discharge its statutory obligation and it did not respond to the same as mandated under section 127(4) (127(4) After hearing the declarant, a statement in electronic form indicating the amount payable by the declarant, shall be....