TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1155
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....ioner's Bank Guarantee Bank Guarantee No. 0505108BG0002145 dated 16th June, 2008. 3. This 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, an Order-in-Original No. 15/2009 had been passed against the Petitioner on 20th November, 2009 (hereinafter, 'the OIO dated 20th November, 2009') which was challenged by the Petitioner before Customs, Excise and Service Tax Appellate Tribunal (hereinafter, 'CESTAT'). Vide final order dated 6th August, 2015, the said OIO dated 20th November, 2009 was set aside and the matter was remanded by the CESTAT to the original authority for fresh adjudication, after providing an opportunity of cross-examination. 5. After the said remand, the Order-in-Original dated 28th June, 2019 (hereinafter, 'the OIO dated 28th June, 2019') was passed in terms of which, the following amounts were demanded f....
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.... amount of Rs, 4,40,00,000/- (Rs. Four Crores Forty Lacs only) deposited voluntarily by M/s. JVIPL vide TR-6 Challan dated 31.03.2008 is appropriated. (i) iv) Penalty of Rs. 4,37,55,7331- (Rs. Four Crore Thirty-Seven Lakhs Fifty-Five Thousand Seven Hundred and Thirty-Three only) is also imposed on M/s JV under the provisions of Rule 15 of the Cenvat Credit Rules 2004, Rule 25 of the Central Excise Rules 2002 and Section 11 AC of the Central Excise Act 1944. However, if they pay the entire amount of cenvat confirmed along with interest above, within 30 days of the receipt of this order, they shall be eligible to pay penalty @25% provided the said penalty of 25% is also paid within 30 days of the receipt of this order in terms of proviso to Section 11 AC ibid...." 6. As can be seen from the above, the following amounts were demanded from the Petitioner: Total demand (including redemption fine) Rs. 4,69,27,211 [Rs. 4,51,15,211 + Rs. 18,12,000] Amount to be deposited under SVLDRS Scheme (if redemption fine is considered as 'arrears') Rs. 2,81,56,327 [60% of Rs. 4,69,27,211] Amount already deposited Rs. 4,40,00,000 Amount payable under the Scheme as per sub-section (2) of S....
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....tion Fine. Accordingly, after the issuance of SVLDRS Form -III, a rectification application was filed by the Petitioner under Section 128 of the SVLDR Scheme and simultaneously, the Petitioner deposited Rs. 4,46,084/- in terms of SVLDRS Form -II. 15. The Petitioner also filed an application for withdrawal of the appeal before the CESTAT and the appeal was accordingly withdrawn. 16. In continuation with the rectification application, subsequent letters were also written by the Petitioner to Respondent No. 3 requesting for rectification of SVLDRS Form -III with respect to the redemption fine. 17. In the meantime, the Petitioner also came to know that a bank guarantee of a sum of Rs. 90,00,000/-, which was furnished by them to the Respondent No. 5- Department on 16th June, 2008, was encashed by the Department to the extent of Rs. 18,12,000/-. 18. In view of this action of the Respondent No. 5- Department, the Petitioner has filed the present petition seeking a fresh discharge certificate in SVLDRS Form-IV in respect of the SVLDRS-I filed by the Petitioner. The reliefs sought in this petition are as under: "a) Issue a writ of mandamus or any other appropriate writ or order or dir....
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....ntral Board of Indirect Tax & Customs (hereinafter, 'CBIC') itself, which clearly uses the words 'total waiver of interest, penalty and fine', while describing the benefits of the SVLDR Scheme. 22. In addition to that, the following judgments passed by various courts are relied upon by the ld. Counsel for Petitioner: 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-1496-2021- 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 3rd 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. 23. Finally, it is submitted by Mr. Aldak, ld. Couns....
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.... order in appeal before expiry of the period of time for filing appeal; or (ii) an order in appeal relating to the declarant attaining finality; or (iii) the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he has admitted a tax liability but not paid it (d) "amount of duty" means the amount of central excise duty, the service tax and the cess payable under the indirect tax enactment; (e) "amount payable" means the final amount payable by the declarant as determined by the designated committee and as indicated in the statement issued by it, in order to be eligible for the benefits under this Scheme and shall be calculated as the amount of tax dues less the tax relief; 123. For the purposes of the Scheme, "tax dues" means - 123 (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, th....
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....in the statement issued by the designated committee, the declarant shall not be entitled to any refund. 127(8)- On payment of the amount indicated in the statement of the designated committee and production of proof of withdrawal of appeal, wherever applicable, the designated committee shall issue a discharge certificate in electronic form, within thirty days of the said payment and production of proof. 129. (1) Every discharge certificate issued under section 126 with respect to the amount payable under this Scheme shall be conclusive as to the matter and time period stated therein, and- (a) the declarant shall not be liable to pay any further duty, interest, or penalty with respect 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 co....
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....y amount mentioned even in this form, in cases where there is pending litigation, is in respect of duty/tax/cess and then amount of penalty, amount of late fee. However, there is no mention of redemption fine in this form as well. 34. A further reading of the FAQs/ the flyer published by the CBIC would show that in the said document, there is a clear benefit mentioned in the following words: "Benefits under the Scheme: * Total waiver of interest, penalty and fine * Immunity from prosecution * Cases pending in adjudication or appeal, a relief of 70% from the duty demand if it is 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/sabka- vishwas/Sabka-Vishwas-Scheme-English.pdf 35. 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....
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....sofar as the applicability of the SVLDR Scheme is concerned. 38. Under the SVLDR Scheme, Section 124 provides that only the part of the excise duty has to be paid, depending upon the amount of tax due. Hence, the same can be either 40%, 50%, 60% or 70% of the tax dues and there is no requirement to pay either the balance tax alongwith penalty or any interest. 39. In fact, the various judgments which have been cited by ld. Counsel for the Petitioner clearly cover this issue and the Court need not reinvent the wheel. In the decision rendered by the Allahabad High Court 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. 'Redem....
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....any merit. In Commissioner of Income Tax (Central) v. B.N. Bhattacharjee & Anr., (1979) 4 SCC 121 = 2002- TIOL-2003-SC-IT, it was clearly opined that estoppel does not operate against a statute. The Supreme Court had laid down: "58. The soul of estoppel is equity, not facility for inequity. Nor is estoppel against statute permissible because public policy animating a statutory provision may then become the casualty. Halsbury has noted this sensible nicety: 'Where a statute, enacted for the benefit of a section 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 bes....
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....de ineligible to file a declaration for non-payment of redemption fine. Moreover, the declarant is required to include redemption fine as part of the duty demanded, so as to calculate the amount in arrears as per Section 121 (c) of the Scheme. 11. The Supreme Court in the case of K.P. Varghese (supra) has laid down that the Rule of construction by reference to the principle of 'contemporanea expositio est optima et fortissima 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 ....
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....d fine. ● Immunity from prosecution. ● Cases pending in adjudication or appeal, a relief of 70% from the duty demand if it is Rs. 50 Lakh or less and 50% if it is more than Rs. 50 Lakh The same relief for cases under investigation and audit where the duty involved is quantified on or before 30th 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. 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 j....
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....as per the SVLDR Scheme and redetermine payable including redemption fee/fine under the SVLDR Scheme by passing fresh order. The designated committee will give six months' time after making assessment under the SVLDR Scheme so that the petitioner(s) can deposit the amount in time." 42. In Messers Espee Electrotech LLP (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, therefor....
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.... the scheme gets extended to the redemption fine also. The relevant paragraphs 3.5, 3.6 & 3.8 of the decision in the case of M/s. Esbee Electrotech LLP (supra) read as under:- 3.5 The benefit of SVLDR Scheme is available, if the applicant pays "tax dues" as per Section 124 of SVLDR 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 ....
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....with the definition of the phrase "amount in arrears" defined by Section 121 (c). In the instant case, the provisions of Section 121 (c) is not applicable since Petitioner No.1-Firm has filed an appeal which has not attained finality and, therefore, none of the clauses 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." 44. On the other hand, the decision referred to by Mr. Harpreet Singh, ld. Counsel in Manpreet Engineering and Construction Company (supra) 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. 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 judgments discussed above, all Courts have taken the view that redemption fine would be covered under duty and penalty and a separate mention of redemption fine was not ....