TaxTMI 
TaxTMI 
2022 (9) TMI 1679
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....3 as well. 3. These petitions are a part of the batch of petitions wherein the short question that arises for consideration of this Court is whether redemption fine is to be considered as part of duty, penalty or the amount eventually payable and is hence, covered by the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter, 'the SVLDR Scheme') or not. 4. The background giving rise to the petitions is that initially, on 20th December, 2012, the Central Excise Authorities conducted searches at various premises linked to the proprietary concerns of the Petitioners i.e. M/s. Meenakshi Garments and M/s. Meenakshi Apparels. Stocks of readymade garments were seized from the said premises. The seized goods were released provisionally on execution of bond and submission of bank guarantee. 5. Pursuant to such seizure, on 18th June, 2013 two separate show cause notices were issued to the Petitioners proposing confiscation of goods and imposition of penalties. In one show cause notice, both M/s Meenakshi Garments and M/s. Meenakshi Apparels were the noticees. In the other show cause notice issued on the same date, only M/s. Meenakshi Apparels was made the noticee. Addit....
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....eads as under: "3. We have heard Shri B.B. Sharma, learned counsel for the assessee-Appellants and Shri M.R. Sharma, learned DR for the Revenue. 4. Both sides have agreed that the issue pertaining to the packaged commodity is pending before the Hon'ble Supreme Court's Larger Bench in the case of State of Maharashtra vs Subhash Arjundas Kataria, MANU-SC-0990-2011 and without the final verdict of the Supreme Court the present appeals cannot be decided. 5. In the above scenario, liberty is granted to the assessee Appellants to approach this Tribunal after having the final verdict from the Hon'ble Supreme Court within the prescribed time, if advise so. 6. With the aforesaid liberty, the appeals stand disposed of." 11. In 2019, the SVLDR Scheme was introduced by the Government vide Chapter V of Finance Act, 2019. Vide Notification 04/2019- Central Excise- NT, the scheme was brought into effect from 1st September, 2019. 12. The said Scheme was meant to give benefits to persons who were having disputes or pending litigation in respect of non-payment of excise duty and other penalties. The Scheme's purpose was to give some amnesty in ca....
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....r, 'CBIC') itself, which clearly uses the words 'total waiver of interest, penalty and fine', while describing the benefits of the SVLDR Scheme. 21. In addition to that, the following judgments passed by various courts are relied upon by the ld. Counsel for Petitioners: i. M/s Jay Shree Industries v. Union of India, Writ Tax No. 832 of 2020- High Court of Allahabad ii. Synpol Products Pvt. Ltd. v. Union of India, 2020 (374) E.L.T. 851 - Gujarat High Court iii. M/s Shoe Sales Corporation & Kapoor International v. Union of India& Ors., CWP-1493-2021 & CWP-14962021- Punjab & Haryana High Court. iv. Messers Espee Electrotech LLP v. Union of India & Ors., Writ Petition No. 7653 OF 2021- Bombay High Court v. Juice Electricals Ltd. v. Union of India & Ors.- Writ Petition No. 12845 of 2023 -Bombay High Court vi. Plane Networks Pvt. Ltd. vs. Union of India, 2020 (41) G.S.T.L. 165 (Del.)- High Court of Delhi vii. Order dated 3^rd March, 2021 in SLP (C) No. 449/2021 challenging the Gujarat High Court judgment in Synpol (supra) wherein the SLP was dismissed by the Supreme Court. 22. Finally, it is submitted by ld.....
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....3 (a)...... (b) where a show cause notice under any of the indirect tax enactment has been received by the declarant on or before the 30th day of June, 2019, then, the amount of duty stated to be payable by the declarant in the said notice: Provided that if the said notice has been issued to the declarant and other persons making them jointly and severally liable for an amount, then, the amount indicated in the said notice as jointly and severally payable shall be taken to be the amount of duty payable by the declarant; 124. (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 notic....
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....espect to the matter and time period covered in the declaration; (b)the declarant shall not be liable to be prosecuted under the indirect tax enactment with respect to the matter and time period covered in the declaration; (c)no matter and time period covered by such declaration shall be reopened in any other proceeding under the indirect tax enactment. (2) Notwithstanding anything contained in sub-section (1), - (a) no person being a party in appeal, application, revision or reference shall contend that the central excise officer has acquiesced in the decision on the disputed issue by issuing the discharge certificate under this scheme; (b) the issue of the discharge certificate with respect to a matter for a time period shall not preclude the issue of a show cause notice, - (i)for the same matter for a subsequent time period; or (ii)for a different matter for the same time period; (c) in a case of voluntary disclosure where any material 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....
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....s Rs. 50 lakh or less and 50% if it is more than Rs. 50 lakh." The said flyer of the SVLDR Scheme, as published by the CBIC can also be accessed via the following URL : https://cbic-gst.gov.in/pdf/sabkavishwas/Sabka-Vishwas-Scheme-English.pdf 33. The issue that has arisen for consideration in the batch of cases, which the present petitions are a part of, is whether where cases where goods are liable for confiscation or any seizure is effected, such cases would be covered under the benefits in the SVLDR Scheme. The further question is whether in cases where redemption fine is imposed for release of confiscated goods, the Scheme would apply or not and if the person deposits the duty in terms of Section 124 of the SVLDR Scheme, a discharge certificate would be liable to be issued. 34. Under the Central Excise Act, 1944, Section 12F and Section 34 provides as under: "12 F. Power of search and seizure - (1) Where the Joint Commissioner of Central Excise or Additional Commissioner of Central Excise or such other Central Excise Officer as may be notified by the Board has reasons to believe that any goods liable to confiscation or any documents or books or things, which i....
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....urt in M/s Jay Shree Industries (supra) which was considering this very scheme, the rationale behind the Scheme has been set out as under: "31. In view of that law laid down by the Supreme Court, 'confiscation' is nothing but a penalty in rem. Redemption fine, by virtue of Section 34 of the Central Excise Act, is only a payment made in lieu of this penalty. Upon any 'confiscation' made under the Act, the option to pay an equivalent fine is required to be provided. It is not possible to say that the nature of 'confiscation' under the Act and a fine in lieu thereof is somehow different. 'Redemption fine' must necessarily also be considered a 'penalty' against the offending goods. Further, in absence of any contrary statutory definition of the word 'penalty' or other specific exclusion of 'redemption fine' from the consequences of issuance of a Discharge Certificate (under section 129 of the Scheme), undoubtedly, the word 'penalty' appearing in section 129 of the Scheme includes, within its plain ambit, both, a penalty in personam and a penalty in rem. Here, both, personal penalty and the penalty in rem ....
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....ion of the public, imposes a duty of a positive kind, the person charged with the performance of the duty cannot by estoppel be prevented from exercising his statutory powers. [Maritime Electric Co. Ltd. v. General Diaries Ltd., 1937 AC 610 and HALSBURY'S LAWS OF ENGLAND, para 1515] A petitioner In a divorce suit cannot obtain relief simply because the respondent is estopped from denying the charges, as the court has a statutory duty to inquire into the truth of a petition. [Hudson v. Hudson, 1948 P. 292 and HALSBURY'S LAWS OF ENGLAND, para 1515] " The luminous footnote cites rulings and states that: 'This rule probably also applies where the statute bestows a discretion rather than Imposing a duty.[ HALSBURY'S LAWS OF ENGLAND, 4th Edn., p. 1019]" To sum up, where public duties cast by statute are involved, private parties cannot prevent performance by invoking estoppel. We do not discuss further since the facts here exclude estoppel". We have no reason to apply a different yardstick to allow the respondent authorities to overlook the clear and binding statutory provision, in favour of the concession claimed to have been ....
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....ssima in lege' which is a well established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous. Therefore, when the Central Board of Indirect Taxes has issued FAQs, press, notes and flyers by way of explaining the scheme providing waiver of interest, penalty and fine and immunity from prosecution, then case involving confiscation/redemption fine cannot be excluded under the Scheme, as such explanation by the Board provides legitimate aid in the constructions and interpretations of the provision of the Scheme. 12. In view of the foregoing reasons, the petition succeeds and is accordingly allowed. The declaration filed by the petitioners and other similarly situated persons are required to be considered by the designated committee without payment of redemption fine by the declarant. The impugned orders passed by the designated committee are therefore quashed and set aside. As observed by the Coordinate Bench of this court, the order passed in this petition would also apply to the similarly situated declarants who have not approached t....
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....the relief offered is 60% of the confirmed duty amount if the same is Rs. 50 Lakh or less and it is 40% in other cases. ●In cases of voluntary disclosure, the declarant will have to pay full amount of disclosed duty. Leamed counsel for the petitioner while referring to letter/order dated 23.12.2019 (Annexure P-5) has argued that his application under the SVLDR Scheme was made on 14.10.2019 against the demand of penalty of Rs. 1,98,597/- and redemption fine of Rs. 9,64,062/(Annexure P-3). While rejecting his application, it was observed that since the matter involves redemption of fine and this fine was in lieu of confiscation of goods which had not been proposed for relief in the said scheme as the said scheme only relates to the matters involving demand of duty, interest and penalty. He has referred to a judgment passed by the High Court of Gujarat in a case titled as Synpol Products Pvt. Ltd. Vs. Union of India, 2020 (32) G.S.T.L 705 (Guj.) (Annexure P-6). While interpreting the contents of the Sabka Vishwas Scheme, 2019, it was held that when the Central Board of Indirect Taxes and Customs had issued flyers, press release and FAQs, it was clearly....
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....(supra), the Bombay High Court has also categorically held that redemption fine is nothing but a duty and the same would be waived upon the payment of the amount in terms of the SVLDR Scheme: "3.3 It is the contention of Petitioner that the issue of waiver of redemption fine is covered by SVLDR Scheme or not is no more res integra in the light of the decision of (i) the Gujarat High Court in Synpol Products Pvt. Ltd. vs. Union of India (374) E.L.T. 851 and SLP has also been dismissed by the Supreme Court, (ii) the Allahabad High Court in M/s. Jay Shree Industries vs. Union of India & Anr. 2021 (8) TMI 446 and (iii) this Court in HP Adhesives Limited vs. Union of India & Ors. WP No. 3743 of 2021 dtd. 20th February 2023. Petitioner further submitted that under the Scheme what is required to be deposited is the amount of tax dues relating to the duty and, therefore, Respondents are not justified in rejecting the application since once the duty is settled under the scheme, waiver of penalty and fine is consequential. xxx 3.7 Assuming we accept the contention of respondents that "redemption fine" is nothing but a "duty" then even in that case, the SVLDR ....
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....VLDR Scheme. Section 123 defines "tax dues" for the purpose of the scheme to mean the "amount of duty" which is being disputed in the appeal. The phrase "amount of duty" is defined in Section 121 (d) to mean 'the amount of central excise duty, the service tax and the cess payable under the indirect tax enactment'. Therefore, on a conjoint reading of Sections 124, 123 and 121 (d) of SVLDR Scheme what is required to be paid for availing the benefit of the Scheme is the amount of certain percentage of the amount of excise duty and not the amount of redemption fine. Once the applicant pays the amount of excise duty as required under the Scheme, the applicant is not liable to pay any further duty, interest or penalty with respect to the matters covered in the declaration. Therefore, in our view, the reasons given by Respondents in the application for rejecting the application that Petitioner is required to pay the redemption fine is not borne out from any provisions of SVLDR Scheme. 3.6 Once the applicant pays the amount of duty as per Scheme then Section 129 provides that the applicant shall not be liable to pay any further duty, interest or penalty with respect to the....
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....ses of Section 121 (c) of the Scheme applies to Petitioner's case. Therefore, on facts the observations in paragraph 10 of the Gujarat High Court is not applicable to the case before us." 42. On the other hand, the decision referred to by ld. Counsel in Manpreet Engineering and Construction Company v. Union of India & Ors. 2016 (44) STR 384 (JHAR) primarily holds that no language can be added into a scheme since such schemes would be liable to be strictly interpreted by the Court. Further, it has also been held that the scheme is also not to be interpreted liberally and no leniency can be granted. 43. The Court has considered the overwhelming decisions which have been cited on behalf of the Petitioner, as also the arguments made on behalf of the Respondents. 44. In the judgments discussed above, all High Courts have taken the view that redemption fine would be covered under duty and penalty and a separate mention of redemption fine was not required either under SVLDR Scheme-I or in terms of the Sections in the scheme itself. 45. The scheme of the Central Excise Act, 1944 reveals that whenever there is non-payment of excise duty in respect of any goods, there ....
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.... 51. Accordingly, the Department shall issue to the Petitioners, the discharge certificates with respect to show cause notices dated 18^th June, 2013 in terms of Section 129 of the SVLDR Scheme, within a period of two months. 52. The petitions are allowed in these terms. Pending applications, if any, are also disposed of. ============= Document 1 31 Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 SABKA VISHWAS (Legacy Dispute Resolution) SCHEME, 2019 For Service Tax and Central Excise Mule & Now Begining! Psys m40 सतà¥à¤¯à¤®à¥‡à¤µ जयते Objectives . The same relief for cases under investigation and audit where the duty involved is quantified on or before 30" June, 2019 . In case of an amount in arrears, the relief offered is 60% of the confirmed duty amount if the same is Rs. 50 Lakh or less and it is 40% in other cases . In cases of voluntary disclosure, the declarant will have to pay full amount of disclosed duty. · One time measure for liquidation of past disputes of Central Excise and Service Tax ·To provide an opportunity of voluntary disclosure to non-compliant taxpayers. Cases c....