TaxTMI 
TaxTMI 
2026 (4) TMI 1582
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...., to remain under SSI exemption limit of Rs. 1.5 Crore, they sold Batteries without bills under 'chits' and after dispatch, they used to destroy such chits. The appellant / claimant manufactured and cleared clandestinely Batteries without obtaining Central Excise Registration, without issuing bills / invoices and without payment of Central Excise Duty during the period from 01.04.2010 to 26.03.2013. Therefore, Show Cause Notice dated 27th March, 2015 was issued by the Assistant Commissioner, Central Excise Division, Rajkot-1 proposing confiscation of goods valued at Rs. 38,24,205/- along with applicable penalty. The second Show Cause Notice dated 16th September, 2013 was issued by Commissioner, Central Excise, Rajkot proposing recovery / demand of Central Excise Duty amounting to Rs. 98,89,979/- along with applicable interest and penalty. The above mentioned Show Cause Notices were adjudicated vide a combined order dated 29th March, 2016. In the said order, confiscation of the seized goods with an option to redeem the same on payment of redemption Fine of Rs. 10,00,000/- within 30 days of receipt of order and penalty of Rs. 2,50,000/- was imposed on the claimant. The demand of Rs. ....
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....ere is no provision of refund of any amount which has been already paid under SVLDRS-2019. 1.4 Feeling aggrieved from the Order-in-Original passed by Learned Assistant Commissioner, Central GST Division, Rajkot, the appellant preferred appeal before the learned Commissioner (Appeals). The learned Commissioner (Appeals) rejected the appeal holding that the amount of redemption fine paid by the appellant is part of "duty payable" and they were required to include the redemption fine in the amount of "duty payable" in their declaration. Since, the amount of redemption fine paid is part of duty and the case is settled under SVLDRS, 2019, the excess payment made, if any, is not refundable as per Section 130(2) of the Finance Act, 2019. 1.5 Feeling aggrieved from the impugned order passed by the learned Commissioner (Appeals), the present appeal has been preferred before this Tribunal. 2. The learned Counsel for the appellant submitted that appellant has applied under SVLDRS Scheme to get the matter settled. However, the department informed that the scheme is applicable only regarding Excise Duty and it is not applicable on "redemption fine" imposed on the appellant. The appella....
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....als) may be set aside. 3. The learned Authorised Representative for the department submitted that the refund claim of Rs. 10,00,000/- towards redemption fine was rightly rejected as it is legally untenable under SVLDRS framework and general law. The appellant voluntarily opted for SVLDRS, consciously paid the redemption fine on 3rd December, 2019 and thereafter, obtained under SVLDRS Scheme conclusive discharge certificate under Section 129 of the Finance Act. Judgment in M/s. Synpol Products Pvt Ltd does not grant any right to get refund of redemption fine already paid. It only deals with eligibility to file declaration without prior payment of redemption fine. He has prayed that the impugned order passed by the learned Commissioner be upheld and the appeal may be rejected. 4. I have heard the learned Counsel for the appellant and the learned Authorised Representative for the department and perused the records. 4.1 In the present case vide a combined order dated 29th March, 2016, the Adjudicating officer passed order for confiscation of the seized subject goods with option to redeem the same on payment of redemption fine of Rs. 10,00,000/- within 30 days of receipt of ord....
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....tment. Therefore, the test which is required to be applied to ascertain what is the amount in arrears as per the Scheme, it would include both the amount of duty as well as amount of redemption fine which is required to be recovered from the taxpayers. The amount of redemption fine cannot be treated separately then the amount of the duty under the Scheme. Therefore, the interpretation made by the Board in the communication dated 20.12.2019 in order to consider the declaration made by the declarant, the payment of redemption fine is prerequisite, is not tenable in law, because as per Section 125 of the Scheme a declarant cannot be made 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." 4.3 In view of the judgment of Hon'ble Gujarat High Court as mentioned above, the appellant vide their letter dated 16th September, 2020 applied for refund claim of Rs. 10,00,000/- paid as redemption fine. However, the department issued Show Cause Notice to the appellant as to why the refund claim should not be....
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....019 in the case of M/s Synpol Products Pvt Ltd. The appellant contented that as per the order of Hon'ble High Court no fine was payable and they are entitled for refund of fine paid by them. However, I find that the contention of the appellant is fallacious as Hon'ble High Court in the said order only said that as per Section 125 of the Scheme a declarant cannot be made ineligible to file a declaration for non-payment of redemption fine. On the contrary, Hon'ble High Court has held that, 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. Paragraph 10 of the said order reads as under: 10. In view of the above facts and situation, when the respondents had issued show cause notice demanding excise duty together with confiscation of the goods in terms of Rule 25(a) and (d) of the Central Excise Rules. 2002 and redemption fine in lieu of confiscation under Rules 25 as goods were not available for confiscation, it is clear that by issuing the show cause notice, the respondent has invoked Rule 25 of the Central Excise Rules, 2002 for levy of redemption fine in....
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....able as per Section 130(2) of the Finance (No.2) Act, 2019. Accordingly, I hold that the adjudicating authority has correctly rejected the refund claim." 4.6 I am of the view that the above reasoning given by the learned Commissioner (Appeals) cannot be accepted and it is not sustainable. It is pertinent to note here that when the appellant applied under SVLDRS Scheme, the Revenue vide letter dated 22nd October, 2019 informed the appellant that their application covered waiver of the redemption fine which is not covered under SVLDRS-2019, therefore, their application is liable to be rejected under the provisions of the scheme. The direction made by the Revenue vide letter dated 22nd October, 2019 was improper and illegal because Hon'ble Gujarat High Court has held in M/s. Synpol Products Pvt Ltd and Ors. the interpretation made by the Board in the communication dated 20.12.2019 "in order to consider the declaration made by the declarant the payment of redemption fine is prerequisite" is not tenable in law because as per Section 125 of the Scheme a declarant cannot be made ineligible to file a declaration for non-payment of redemption fine. 4.7 In view of the order passed by H....