TaxTMI 
TaxTMI 
2021 (9) TMI 522
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....10.02.2016 at the business and other premises of the petitioner and its directors etc. In the 'Panchnama' drawn on 10.02.2016 itself, an allegation of short payment of Central Excise duty (against shortage of stock) Rs. 2,18,516/- was made. A copy of the same is annexed as Annexure No. 1 to the writ petition. Pursuant to the search, an investigation (under the Act), became pending against the petitioner and its directors. During that investigation, on 13.05.2016, the statement of Dinesh Garg, a director of the petitioner-company came to be recorded. As per Annexure-A to that statement duty payment Rs. 45,38,231/- was avoided upon clandestine removal of excisable goods. Its copy is annexed as Annexure No. 3 to the writ petition. Relevant to our discussion, the contents of question nos. 3 and 7 together with the answers furnished by the said Dinesh Garg, in that statement, read as under: "Q-3. On the basis of print outs of sales register taken from the laptop and sales register submitted by your accountant Shri Gaurav Tyagi on 10.02.2016 in reply of Question No.4 of his statement, a detail have been prepared containing date wise entries of sales made to different buyers duri....
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....on on SVLDRS-1, under the Scheme on 13.01.2020. It disclosed the amount of disputed duty payable under the Act at Rs. 47,56,751/- and the Estimate Amount Payable (EAP in short) Rs. 14,27,025.30/-. The disputed duty payable/'tax dues' disclosed was the sum of the alleged short-paid duty - as per the 'Panchnama' document dated 10.02.2016 and, the evaded duty - as per the statement of Dinesh Garg dated 13.05.2016. The Designated Committee did not dispute the computation of disputed duty payable and EAP disclosed by the petitioner yet, on 31.01.2020, instead of issuing a demand on SVLDRS-3 it issued a demand on SVLDRS-2, to the petitioner. It also computed the EAP at Rs. 14,27,025.30. It included the amount of Rs. 2,18,516/- already paid by the petitioner, during the investigation. 6. Thereafter, though no hearing took place, the Designated Committee rejected the petitioner's declaration by the impugned order dated 05.05.2020. While rejecting the petitioner's declaration, it has been observed as under: "I find that in the instant case, the officers of Anti-evasion, Central Excise Commissionerate, Meerut has initiated an enquiry against the party, wherein a s....
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....(r). ''quantified", with its cognate expression, means a written communication of the amount of duty payable under the indirect tax enactment;" 9. Also, the phrase "enquiry or investigation" has been defined under Section 121(m) of the Scheme. It reads: "121(m). "enquiry or investigation", under any of the indirect tax enactment, shall include the following actions, namely:- (i) search of premises; (ii) issuance of summons; (iv) recording of statements;" 10. Clearly, a person against whom an enquiry, investigation or audit may be pending and whose 'tax dues' may not have been 'quantified', would remain ineligible to make a declaration on form SVLDRS-1. According to the revenue, for the purposes of Clause 123(c) of the Scheme, on 30.06.2019, the 'tax dues' against the petitioner were not 'quantified'. Admittedly, prior to that date no communication whatsoever was issued by any Central Excise authority to the petitioner to communicate the 'quantified' amount of 'tax dues'/duty amount payable. 11. However, there is no doubt that the 'Panchnama' document dated 10.02.2016 prepared by the Central Excise authorit....
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....13. The Central Board of Indirect Taxes and Customs (hereinafter referred to as the CBIC), is the highest administrative authority under the Act. It was also given the power to issue binding orders and instructions and directions to other authorities under the Scheme, for its proper administration. In exercise of that power, the CBIC issued the Circular No. 1071/4/2019-CX.8, dated 27.8.2019 (hereinafter referred to as the 'Circular'). Relevant to our discussion, the opening Clauses and Clause 10(g) of that Circular read as under: " I am directed to state that the Government has announced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 as a part of the recent Union Budget. Further, in accordance with the Finance (No.2) Act, 2019, the Central Government has notified the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 as well as issued Notification No. 04/2019 Central Excise-NT dated 21.08.2019 to operationalize this Scheme from 01.09.2019 to 31.12.2019. 2. As may be appreciated, this Scheme is a bold endeavor to unload the baggage relating to the legacy taxes viz. Central Excise and Service Tax that have been subsumed under GST and al....
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....ase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue." That principle has been consistently applied by the Supreme Court. Also, our Court has consistently followed the same. 15. In Commissioner of Customs, Calcutta & Ors. Vs. Indian Oil Corporation Ltd. & Anr., (2004) 3 SCC 488, the above principle was reiterated and reaffirmed. After discussing the entire gamut of law on the subject, the Supreme Court held as below: "12. The principles laid down by all these decisions are : (1) Although a circular is not binding on a Court or an assessee, It is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand cont....
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....relaxation of law by issuing circulars binding on the taxing authorities." 19. In the present case, Section 133 of the Scheme is pari materia (in material parts) to Section 119(1) of the Income Tax Act, 1961. Under clause 10(g) of Circular issued by the CBIC under Section 133 of the Scheme, the CBIC had forsaken the power it wielded, to its own advantage, under the Scheme. Thus, it waived that advantage and relaxed the rigor of law - to make the Scheme more purposeful and successful by maximizing amicable/consented resolution of legacy disputes, under all indirect taxation enactments, in the context of the imminent enforcement of the G.S.T. Regime, at the relevant time. That being the emphasis laid by the CBIC, it clearly sought to maximize the number and quantum of settlements under the Scheme. That intent is self-apparent from a plain reading of paragraphs 2 and 3 of the Circular. It needs no elaboration. 20. Thus, the CBIC has only clarified the meaning to be given to the word 'quantified' used under the Scheme - to include thereunder any duty liability admitted (in writing) by a person (during an enquiry or investigation) - as a 'written communication' spo....