AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 240
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....l Excise Officer to proceed to adjudicate for the period and the subject in respect of which a Discharge Certificate has been issued in Form No.SVLDRS- 4 under the Sabka Viswas (Legacy Dispute Resolution) Scheme Rules, 2019. 3. Brief Facts: 3.1. The petitioner is a partnership firm engaged in execution of works contract and obtained a registration under the provisions of erstwhile Chapter V of the Finance Act, 1994. A show cause notice No.30 of 2019 dated 11.11.2019 was issued on the premise that verification of financial documents revealed that the petitioner received income towards provision of works contract services, however, the petitioner had not filed periodical returns in form ST-3 nor have they paid appropriate service tax. The notice proposed to treat the income disclosed under the income tax return as representing the value of taxable services in the absence of contract copies, agreements, customer details, completion certificate etc., without extending any abatement. The notice also proposed to levy interest, penalty and late fee under the Finance Act, 1994. 3.2. While so, the Central government introduced a scheme viz., Sabka Vishwas (Legacy Dispute Resolution....
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....nsel for the respondent placing reliance upon the counter that the petitioner being ineligible to even file a declaration under the scheme in view of the fact that an investigation was pending as on 30.06.2019 and thus hit by Section 125 (f)(i), the Discharge Certificate ought to be treated as nonest. Reliance was placed on Section 129(2)(c) which provides that in the case of voluntary disclosure where any material or particular furnished in the declaration is subsequently found to be false within a period of one year of issue of the Discharge Certificate, it shall be presumed as if the declaration was never made. It is the submission of the learned counsel for the respondent that once the declaration contains particulars which are false, Section 129(2)(c) would automatically become operational giving rise to a statutory presumption, as if the declaration under the scheme was never made thereby enabling the authorities under the Act to proceed with adjudication. It was thus submitted that the contention of the petitioner that the Discharge Certificate ought to be revoked / cancelled before proceeding with the adjudication is without any merit. 6. Against the above background, qu....
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.... The Sabka Vishwas (Legacy Dispute Resolution) Scheme is a one time measure for liquidation of past disputes of Central Excise and Service Tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The Scheme shall be enforced by the Central Government from a date to be notified. It provides that eligible persons shall declare the tax dues and pay the same in accordance with the provisions of the Scheme. It further provides for certain immunities including penalty, interest or any other proceedings under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 to those persons who pay the declared tax dues. Objectives : ● To encourage voluntary disclosure of past disputes of Central Excise, Service Tax and 26 other Indirect Tax Enactments. ● To facilitate an eligible person to declare the unpaid tax dues and pay the same in accordance with the provisions of this scheme. ● To provide certain immunities, including Penalty, Interest or any other proceedings including prosecution, to eligible persons who pay the declared tax dues. 8.1. Having had an overview of the object of....
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....t payable by the Declarant, shall be issued within a period of sixty days from the date of receipt of the declaration. (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. (6) Where the Declarant has filed an appeal or reference or a reply to the show cause Notice against any order or notice giving rise to the tax dues, before the appellate forum, other than the Supreme Court or the High Court, then, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn. (7) Where the Declarant has filed a writ petition or appeal or reference before any High Court or the Supreme Court against any order in respect of the tax dues, the Declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal of such writ petition, appeal or reference with the leave of the Court, he shall furnish proof of s....
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....l be instituted." 8.2. On a cumulative reading and analysis of Section 125, 126,127 128 and 129 of the SVLDRS the following position appears to emerge : a) The Designated Committee on receipt of the declaration made by the Declarant under Section 125 shall verify the correctness of the declaration. b) The amount which the Declarant is required to pay under the Scheme is decided on hearing the Declarant. c) The Discharge Certificate issued under Section 127(8) of the SVLDRS Scheme is declared to be conclusive under Section 129(1) of the Scheme as to the matter and time period stated in the Discharge Certificate. The exception to the conclusivity of resolution of the dispute under the Scheme in the case of a voluntary disclosure, is if any material particular is subsequently found to be false within a period of one year of issuance of the Discharge Certificate. If so, the scheme provides that it shall be presumed as if the declaration was never made and proceedings under the applicable indirect tax enactment shall be instituted. d) Section 129(2)(c) on which emphasis was placed by the learned counsel for the respondent reads as under : ....
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....he authorities to make any adjudication with respect to the matter and time period with regard to which the Discharge Certificate is issued. The impugned order stands vitiated inasmuch as the Discharge Certificate is admittedly not revoked / cancelled by the Designated Committee thus the embargo under the Scheme with regard to adjudication of the matter and time period constituting the subject matter of the Discharge Certificate would continue to operate. 8.5. The powers of the adjudicating authority flows from Section 83 of the Finance Act read with Section 12E of the Central Excise Act which reads as under : S.12E Powers of Central Central Excise Officers. - (1) A Central Excise Officer may exercise the powers and discharge the duties, conferred or imposed under this Act on any other Central Excise Officer who is subordinate to him. (2) Notwithstanding anything contained in sub-section (1), the [Commissioner of Central Excise (Appeals)] shall not exercise the powers and discharge the duties conferred or imposed on a Central Excise Officer other than those specified in section 14 or Chapter VIA.] SECTION 83. Application of certain provisions of Act 1 ....
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....ority could also be lower in rank to the members of the designated committee and to understand that an authority can revoke or cancel an order / certificate passed by a superior authority / body would result in distortion of Institutional Hierarchy. This would be clear if one contrasts the Constitution of the Designated Committee under Rule 5 of the SVLDRS Rules, 2019 vis-a-vis definition of Central Excise Officer who performs / discharges the function of adjudication, which reads as under: "5. Constitution of designated committee.. (1) The designated committee under section 126 shall consist of- (a) the Principal Commissioner or Commissioner of Central Excise and Service Tax, as the case may be, and the Additional Commissioner or Joint Commissioner of Central Excise and Service Tax, as the case may be, in a case where the tax dues are more than rupees fifty lakh: Provided that there shall be only one such designated committee in a Commissionerate of Central Excise and Service Tax; (b) the Additional Commissioner or Joint Commissioner of Central Excise and Service Tax, as the case may be, and the Deputy Commissioner or Assistant Commissi....
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....oner and Additional Commissioner. Resultantly, to understand that the Discharge Certificate issued by the designated committee could be revoked, cancelled or discarded by an officer of a lower rank would result in distortion of institutional and administrative hierarchy a consequence which ought to be avoided. In this regard it may be relevant to refer to the judgment in the case of M/s.Muthu Metals Vs. State of Tamil Nadu reported in 1993(3) M.T.C.R.: "On a careful consideration of the submission in the light of the governing position of law, we are of the view that there is nothing in the provisions of the Act or the Rules or the scheme underlying assessment and levy of tax which disables a particular authority in the hierarchy who is otherwise entitled to and empowered to exercise powers under Sections 16 and 16-A of the Act from exercising sch powers merely because the original assessment under Section 12 came to be made by an officer of a higher rank or status in the administrative hierarchy. The exercise of powers under Sections 16 and 16-A of the Act is equally an independent one on distinct and separate material or for reasons and the validity or otherwise of such ....
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....e, possibility of a conflict in the orders passed by the two courts may arise, which must be avoided." (ii) Commissioner of Customs Vs. Sayed Ali and another reported in (2011) 3 SCC Cases 537 : "20. From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest that only such a Customs Officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue notice under Section 28 of the Act. Any other reading of Section 28 would render the provisions of Section 2(34) of the Act otiose inasmuch as the test contemplated under Section 2(34) of the Act is that of specific conferment of such functions. 21. Moreover, if the Revenue's contention that once territorial jurisdiction is conferred, the Collector of Customs (Preventive) becomes a "proper officer" in terms of Section 28 of the Act is accepted, it would lead to a situation of utter chaos and confusion, inasmuch as all officers of Customs, in a particular area be it under the Collectorate of ....