AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1158
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.... petition is 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 petition is that initially, the Petitioner was issued a show cause notice dated 23rd June, 2014 (hereinafter, 'the SCN'), which was adjudicated by the Commissioner of Central Excise, Delhi-II vide Order-in-Original dated 28^th October, 2015, confirming duty demand of Rs. 2,35,42,201/- along with interest and penalty. 5. The said Order-in-Original dated 28^th October, 2015 was then challenged by the Petitioner before the Central Excise and Service Tax Appellate Tribunal (hereinafter, 'CESTAT') and the CESTAT, vide order dated 23^rd February, 2018 allowed the appeal filed by the Petitioner and remanded the matter to the adjudicating authority for de novo adjudication of the SCN. The relevant portion of the final order dated 23^rd February, 2018 is extracted herein below: "7. In the peculiar ....
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.... Account Number: 002000CEZK02026302020051753558 Account Name: RBI Virtual IFSC Code: RBIS0CBICER Challan Expiry Date: Jul 1, 2020, 12:00:00 AM Total Duty Amount: 87,85,107.00 13. However, due to a glitch in the portal, the payment made by the Petitioner did not go through. On 30^th June, 2020 itself the Petitioner wrote to Central Board of Indirect Taxes and Customs (hereinafter, 'CBIC') informing them as under: "...In this regard, I have been issued SVLDR-3 No: L130320SV300488 on 13.03.2020. Amount of payment to be made has also been indicated in the said Form. Owing to Covid-19 pandemic, the date for making the payment has been extended to 30.06.2020. I had been trying to make to make the payment after generating the CTIN No. 2006258884 at around 3.00PM. Since then I had been trying continuously for making the payment but either the website shows 'no challans' or gives and error code HTTP 404. After continuously receiving the message, I had also called the help line number 180030101000. On calling. the help desk, I had been advised to browse through 'internet explorer' for making the payment. After gr....
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....nd the Petitioner cannot make the payment anymore. 16. However, it is the case of the Petitioner that the payment was accepted on 1^st July, 2020 and the said payment is duly reflected under the 'Details of Taxpayer Summary View Tab', where the amount collected is shown as Rs. 87,85,107/- through the Reserve Bank of India by RTGS bank transfer. 17. Under such circumstances, the Petitioner submits that the amount having been paid, the benefit of the SVLDR Scheme ought to be afforded to the Petitioner. 18. Reliance is also placed upon on the Track Challan Status, wherein under the SVLDR Scheme, the Petitioner's amount is shown as `PAID'. The same is extracted herein below: 19. Ld. Counsel for the Petitioner has also relied upon certain judicial precedents in support of their contention. Relevant portions of the same are extracted herein below: i. Shekhar Resorts Ltd. Vs. Union of India, 2023 3 SCC 220 "23. Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, the appellant cannot be punished for not doing something which was impossible for it to do. There was a legal impediment in the way of the appella....
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....something which was impossible for him to do." ii. M/s LG Chaudhary vs. Union of India, Allahabad High Court [Special Civil Application No. 12366 of 2021] "10. The basic object of the Scheme is to reduce litigation by allowing the eligible assessee to make the payment of the outstanding dues after availing the relief under the Scheme. As per the provisions of the Scheme, respondent No. 2 has issued a statement as provided under section 127 of Chapter V of the Finance Act (No. 02) 2019 determining the amount payable by the petitioner under the Scheme. Therefore, in the given facts and circumstances, the petitioner made bona fide attempt to make the payment as determined under the Scheme and is also prepared to pay the amount in question in accordance with the Scheme along with interest for the period for which the petitioner was not permitted to make payment by respondent authorities considering extreme Pandemic condition of Covid-19, we are of the opinion that this is a fit case for invocation of the powers under Article 226 of the Constitution of India. 11. The contention raised on behalf of the respondents relying upon the decision of the Apex Court in ....
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....a glitch. 24. Under such circumstances, since the Petitioner has been permitted to make the payment thereafter and the Track Challan Status shows that the amount is paid, the Petitioner is held to be entitled to the benefit of the scheme. 25. Another argument raised on behalf of the Respondents is that penalty and redemption fine are different from each other and penalty does not include redemption fine. Therefore, the Petitioner has to pay redemption fine along with dues as mentioned in SVLDR Scheme-III issued to them by the Designated Committee. Since the Petitioner could not deposit the settled amount, along with the redemption fine under SVLDR Scheme-III within the stipulated time period, the Designated Committee could not issue SVLDR Scheme-IV, i.e. the discharge certificate and hence, the SVLDR Scheme-I declarations filed by the Petitioner are deemed to have lapsed. 26. This Court observes that the SVLDR Scheme-III Form, was issued to the Petitioner inter alia declaring that redemption fine is required to be paid by the Petitioner before issuance of discharge certificate. The said declaration was issued to the Petitioner on 13^th March, 2020 with the following remark....
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....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 30^th 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, forty per cent. of the tax dues; (iii) in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it and the duty amou....
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....n, 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 was never made and proceedings under the applicable indirect tax enactment shall be instituted." 28. A perusal of the above provisions of the SVLDR Scheme would show that the same applies only to legacy disputes and under Section 124 of the SVLDR Scheme, different amounts are prescribed, which if paid, would result in a discharge certificate being issued to the tax payer stating that their liability stands discharged. 29. Further a reading of Section 123 (b) of the SVLDR Scheme woul....
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....enefits 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. 36. Under the Central Excise Act, 1944, Section 12F and Section 34 provides as under: "12F. 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 in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any Central Excise Officer to search and seize or may himself search and seize such documents or books or things. [(2) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of Section....
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....alent 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 arose from a single transaction. Clearly, both penalties are part of the same dispute, for a common period. It is so because even according to the revenue both those penalties were imposed vide the Order-in Original 2/A/Ayukt/M/97 dated 14.08.1997. Though that order has not been shown to us, yet it is not the case of the revenue that the 'redemption fine' in question was imposed on the petitioner, independent of that order. The revenue only co....
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....o 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 made by the petitioner. The concession, if any, made by the petitioner in the Discharge Certificate proceedings - to deposit the 'redemption fine', would remain contrary to the express provision of law and therefore unenforceable and of no consequence." 40. Similarly, in Synpol Products Pvt. Ltd. 2020 (374) E.L.T. 851, the Gujarat High Court has taken a similar view to the following effect: "10. In view of the above facts and situation, when....
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.... 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 this Court, in order to reduce the multiplicity of proceedings. Accordingly, this order would apply to the cases of all the declarants involving confiscation/redemption fine. In such circumstances, the respondent authorities are directed to issue necessary discharge certificate under Section 129 of the Finance Act, 2019 to the petitioners subject to fulfilment of all other conditions as per the Scheme. Rule is made absolute to the aforesaid extent, with no order as to costs." 41. The....
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....d 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 stated that there would be full waiver of interest, fine and penalty and also complete immunity from prosecution and the cases involving redemption of fine and confiscation cannot be excluded under the said scheme. In this backdrop, the explanation given by the Board with respect to redemption fine cannot be treated separately than the amount of duty under the scheme. The term 'fine' mentioned in the Board's flyers, press release and FAQs cannot be fine ....
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....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 Scheme grants immunity/waiver from such "redemption fine" if the basic excise duty is paid as per the Scheme. This is so because under Section 124, what is required to be paid is the prescribed percentage of "tax dues" which is defined in Section 123 to mean the amount of duty disputed and the "amount of duty" is further defined in Section 121 (d) to mean the amount of "central excise duty". Therefore, when Section 124 speaks of payment re....
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....red 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 period covered in the declaration. Although in Section 129 (1) (a) of SVLDR Scheme redemption fine is per se not included, but the Central Board of Indirect Taxes and Customs issued flyers, wherein it is stated that the benefit under the Scheme would be total waiver of interest, penalty and fine. To the same effect, is the press note dated 22^nd August 2019 issued by the Ministry of Finance, Government of India, wh....
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....d 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. 45. 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. 46. In the judgements 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 clauses in the scheme itself. 47. The scheme of the Central Excise Act, 1944 reveals that whenever there is non-payment of excise duty in respect of any goods, there can be various consequences. There can be seizure of goods and/or relevant material, a redemption fine can be imposed for release of goods. Such seizure or imposition of redemption fine, is nothing but a fine being paid due to nonpayment of duty. Once the duty itself gets settled under the SVLDR Scheme, it would not be appropriate to interpret the Scheme in a manner that would be contrary to the in....
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....Loggod in: Nov 1, 2020, 6:24:12 PM ANN-P-18 Dantbours Trank Cầu llan Track Challan Status 142 afresh Amount Paid IG Reference Numberw MAKE PAYMENT CE/ST Registration location Code CTIN Expiry Email Address Mobile Number Assesie Date of Paymert Â¥ Address Schang Status . Search Q ddfmn @ Search Q 50 Street No.1A Friends Ram AFOP80294CLDOD1 7/0202 2006258384 01/07/2020 anubhavgangster @gmail.com 9810194093 Gupta Babu 8385,107.00 01/07/2020 Industrial Aras, Shahdara, CO2000CEZX02025302020051753558 SVLORS - PAID Deli 4137 Delel 110095 Status . Gupta Babu AFOP80294CLDOD1 7/0202 2006258384 01/07/2020 anubhavgangster @gmail.com 9810194093 Babu 4 P'ericus 1 Mest # Document 2 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 involv....