TaxTMI 
TaxTMI 
2021 (10) TMI 990
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....nder the Scheme under ARN No.LD2812190001665 dated December 28, 2019 under the category of 'Investigation/Enquiry/Audit', sub category 'Audit' declaring tax dues of Rs. 2,41,59,708/-. The declarations are rejected by the letters dated May 12, 2020 (hereinafter referred to as 'the impugned letters' for short). For convenience we have referred to the facts in Writ Petition No.970 of 2020. 2. The jurisdiction of this Court is invoked under Article 226 of the Constitution of India challenging the validity and legality of the impugned letters, rejecting the application made by the petitioner under the Scheme for settlement of the amount of excise duty payable. 3. The petitioner is a company registered under the Companies Act, 1956 duly allotted the Central Excise Registration as well as the GST registration. The petitioner is engaged in manufacture and supply of steel. The office of respondent No.4 (Commissioner, CGST and CX) conducted EA-2000 audit on the records of the petitioner for the period April 2015 to June 2017. During the course of scrutiny on records of the petitioner, Circle X, Group I, GST Audit, Raigad, sought following details from the petitioner vide email dated Ap....
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....the view that the said amount was not quantified prior to June 30, 2019 and therefore, the respondent No.3 in accordance with Section 127 of the Finance Act, 2019 read with Clause 6 of the Scheme issued Form SVLDRS-2 dated January 14, 2020 stating that the declaration filed by the petitioner appears ineligible. An opportunity of personal hearing was granted to the petitioner on January 21, 2020. The 'impugned letter' dated May 12, 2020 then came to be issued which is the subject matter of challenge in the present petition. 6. The petitioner vide communication dated May 21, 2020 addressed to respondent No.3 highlighted the errors in the rejection letter which were apparent on the face of record and requested for the reconsideration of the petitioner's application. The respondent No.4 proceeded to issue Show Cause Notice dated June 24, 2020 and demanded a payment of duty amount of Rs. 75,64,008/-. Again by a letter dated July 21, 2020, the petitioner requested the respondent No.3 to decide the petitioner's representation for reconsideration of the application. In the absence of any response to the said letters for reconsideration, the petitioner is constrained to file the present ....
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....-off date viz. June 30, 2019, the impugned letter is unsustainable. Learned counsel also placed reliance on various decisions rendered by the High Courts which we have referred to in the latter part of this judgment in support of his submissions. SUBMISSIONS OF LEARNED COUNSEL FOR THE RESPONDENTS 9. Our attention is invited to the affidavit-in-reply filed on behalf of respondents. It is submitted that the quantification was communicated to the petitioner for the first time only on September 4, 2019, which is after the cut-off date. The communication relied upon by the petitioner at Exhibit 'C' dated October 31, 2018 cannot be said to be a quantification. Learned counsel submits that e-mail dated March 22, 2018 of Audit Commissionerate is only an excel sheet prepared by the Audit Commissionerate on the basis of the details submitted by the petitioner. According to him, the communication nowhere mentions that the duty/tax amount is quantified as payable and that, it is conclusive for the entire period under consideration of EA-2000. In his submission, the Audit Commissionerate called upon the petitioner to submit additional records vide letter dated September 4, 2018 and after ....
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....r the Scheme except the persons specified under Section 125 of the Finance Act, 2019. 13. Section 123 of the Finance Act, 2019 inter alia provides that where any 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 June 30, 2019 shall be treated as 'tax dues'. Further, Section 124 of the Finance Act, 2019 inter alia provides for the relief the declarant is entitled under the Scheme where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount is quantified on or before June 30, 2019. Section 121(r) of the Finance Act, 2019 defines the term 'quantified' as a written communication of the amount of duty payable under the indirect tax enactment. 14. It is also material to refer to the relevant portion of circular dated August 27, 2019 issued by the respondent No.2 in accordance with the power entrusted thereupon under Section 133 of the Finance Act, 2019, wherein it has been clarified as under :- (g) Cases under an enquiry, investigation or audit where the duty demand has been quantified on or before the 30th ....
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....nication of 'quantification' of duty liability. (A) The communication dated April 4, 2018 addressed by the respondents to the petitioner reads thus :- "Dear Patil, You are again requested to please provide the month-wise annexure of the credit reversed and credit retaken for non payment within 90 days as per attached annexure. Regards Superintendent Circle-X, Group-I GST, Audit Raigad" (B) On the very same day, vide communication dated April 4, 2018, the petitioner's response reads thus :- "Sir, Pl. find attached as desired by you. Pl. confirm Best Regards VIJAY K Patil Excise Deptt. Mob.8108094920/Direct 02143277874/Extn No.7087 JSW STEEL LTD DOLVI WORKS" Along with the said communication dated April 4, 2018, the necessary details in respect of the invoices of which the CENVAT Credit was availed was provided by the petitioner. (C) By a communication dated September 4, 2018 at Exhibit 'B', the respondents called upon the petitioner to submit clarification in respect of the matters stated therein. The relevant portion of the said letter reads thus :-....
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....rtlisted excel sheet to enable them to locate and search the invoices easily and produce the same for verification. Accordingly, the said shortlisted excel sheet namely 'credit taken after one year' was forwarded to the petitioner by email dated March 22, 2018 as per petitioner's request. The respondents categorically denied that the said e-mails are intimation as regards the tax amount having been quantified finally. It is further stated in the affidavit-in-reply that as the petitioner did not provide any further documentary evidence, a letter dated September 4, 2018 was issued to the petitioner for providing necessary clarification. No doubt it is only on the basis of the communications placed on record and the impugned letter that its action is to be justified by the respondents. We have referred to the affidavit-in-rely only to ensure that the stand taken by the respondents is in consonance with the communication and the impugned letter and nothing more. 20. Now a reference to paragraphs 7 and 8 of the communication dated August 29, 2019 would be relevant. Paragraph 7 of the said letter reads that "on reconciliation of both the annexures, it appears that you have taken C....
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....ed September 4, 2018 it is stated that during the course of audit, inadmissible credit in many invoices were noticed and clarification was sought from the petitioner on the said issue which clarification, according to the respondents, was never received. On the basis of the invoices of the said CENVAT credit produced by the petitioner alongwith the communications, the petitioner wants us to conclude that the quantification made by the Department on August 29, 2019 matches with the invoices submitted prior to the cutoff date. In our opinion, merely because the calculations made by the petitioner on the basis of the invoices matches with the quantification made by the department on August 29, 2019 will not stand to benefit the petitioner as what is contemplated is a quantification by the department in view of Section 121 (r) of the Finance Act, 2019. These invoices submitted during the course of audit without the petitioner admitting the duty liability would not amount to quantification within meaning of the Scheme. 23(A). We now consider the decisions relied upon by learned counsel in support of the petitioner's case. Relying on the decision in Seventh Plane Networks Private Limi....
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..... Union of India and ors. 2020(11) TMI 845-Bombay High Court. In paragraph 27, this Court observed that there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. This Court therefore held that in the case of the petitioner, the amount of duty involved had been quantified on or before June 30, 2019. It is in the light of the finding recorded that there has been a quantification of the duty amount on or before June 30, 2019 that this Court decided in favour of the petitioner. Such are not the facts in the present case. This decision again, does not further the petitioner's cause. (D) Reliance is then placed on the decision of this Court in the case of Thought Blurb Versus Union of India and ors 2020(10) TMI 1135-Bombay High Court. This was the case where the duty liability was admitted by the petitioner. However, there was a mistake in declaring the tax dues in the application and hence, this Court held that in such a case because of the mistake in declaring the tax dues for the later period on the higher side, no benefit would accrue to the petitioner; such a mistake could have been rectified had a hearing....
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....17, the Director of the Petitioner had admitted service tax liability of Rs. 12,24,99,843/-. This Court held this to be an admissible quantification under the scheme which was prior to the cut-off date. It is in these circumstances, this Court held that the decision of the respondents in declaring the petitioner as ineligible is unjustified. Thus, the decision in M/s. Suyog Telematics Limited (supra) will turn on the facts of that particular case. (H) The decision relied by the learned counsel for the petitioner in Joseph Daniel Massey Vs. Union of India and ors. Writ Petition (St.) No.3151 of 2020 again is in the facts of that case where this Court observed that the petitioner in a communication addressed to the respondent No.3 had specifically mentioned that the service tax amount due to be paid by the petitioner was Rs. 40,95,110/-. 24. We may now turn to the decision of this Court relied upon by learned counsel for the respondents in the case of Shri SiddhiKumar Infrastructure Private Limited Vs. Union of India, Ministry of Finance and others Writ Petition (L) No.3556 of 2020 dated February 17, 2021. This Court was considering a case where the petitioner had in fact made ....