TaxTMI 
TaxTMI 
2026 (6) TMI 1234
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.... 2. The petitioners were subjected to the inquiry and investigation which was initiated on 21.05.2018. During the course of on spot primary scrutiny it was noticed that the petitioners have not paid the service tax to the tune of Rs. 25,73,507/-. An on spot confession was made by one Shri Ashok Kalyanbhai Patel on the inquiry made as a part of the investigation. Accordingly, summon dated 20.11.2018 was issued to the petitioners wherein, certain documents were called for investigation to ascertain the total Service Tax liability. After the issuance of summons, the petitioners finally produced the documents as called upon by the investigating officers under the letter dated 18.12.2019. 2.1 Upon scrutiny of the record, it was observed that the petitioners have not paid service tax to the tune of Rs. 1,83,11,330/- and accordingly, a show-cause notice dated 12.06.2020 was issued. It appears that the inquiry culminated into the final order dated 15.11.2022 passed by the Joint Commissioner, Central Goods and Services Taxes (for short 'CGST') & Central Excise, Ahmedabad imposing a penalty of Rs. 1,55,11,789/-. 2.2 The petitioners have also challenged the same by filing an appeal b....
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.... on this count also the impugned decision is required to be quashed and set aside. Finally, it is submitted that the respondents ought to have considered the part of the amount of the tax liability which has been admitted by the petitioner in the statement dated 21.05.2018 to the tune of Rs. 25,73,507/- and for the rest of the demand the adjudication proceedings are over, which would not have any bearing on granting the benefit of Scheme. Thus, it is urged that respondent may be directed to reconsider the case and accept the Form SVLDR-1 and grant the benefit of the Scheme. SUBMISSIONS ON BEHALF OF THE RESPONDENTS 4. Opposing the present writ petition and the submissions advanced as recorded hereinabove, learned Senior Standing Counsel Mr. Utkarsh Sharma while referring to the foregoing statutory provisions has submitted that on conjoint reading of the provision of Section 123(c) of the Scheme and the definition of "quantified" as provided under Section 121(r) of the Scheme read with para 10(g) of the Circular dated 27.08.2019, will clarify that the amount which has been ultimately finalised in the adjudication proceedings can be said to be the quantification. It is submitted....
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....ged that the present writ petition deserves to be dismissed. ANALYSIS AND OPINION 5. The facts which are established from the pleading and from the record are as under: (a) The petitioner was subjected to an inquiry initiated on 21.05.2018 and during the on spot preliminary scrutiny it was noticed that the petitioners have not paid the service tax to the tune of Rs. 25,73,507/- (b) An investigation was undertaken and summons were issued on 20.11.2018 asking the petitioners to produce certain documents. (c) On scrutiny of the record it was observed that the petitioners have not paid the service tax to the tune of Rs. 1,83,11,330/- and accordingly a show-cause notice dated 12.06.2020 was issued to the petitioner. (d) Ultimately, the proceedings culminated in the order dated 15.11.2022 passed by the office of the Joint Commissioner, CGST & Central Excise, Ahmedabad imposing a penalty of Rs.1,55,11,789/-. (e) The petitioner assailed the same by filing an appeal and and by the order dated 29.02.2024, the amount was modified and the appellate authority upheld the demand on the taxable value of Rs. 82,06,270/- along with interest and pena....
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..... The Circular dated 27.08.2019 is issued by the Central Board of Indirect Taxes and Customs clarifying issues arising from the implementation of the Scheme. 7.3 In order to appreciate the aforesaid submission a close reading of Section 121(r) and Clause 10(g) is necessary. Section 121(r) of the Scheme reads thus :- "(r) "quantified", with its cognate expression, means a written communication of the amount of duty payable under the indirect tax enactment;" 7.4 Clause 10(g) of the Circular dated 27.08.2019 reads as under:- "10. Further, the following issues are clarified in the context of the various provisions of the Finance(No. 2) Act,2019 and Rules made thereunder: (g) Cases under an enquiry, investigation or audit where the duty demand has been quantified on or before the 30th day of June, 2019 are eligible under the Scheme. Section 2(r) defines "quantified" as a written communication of the amount of duty payable under the indirect tax enactment. It is clarified that such written communication will include a letter intimating duty demand; or duty liability admitted by the person during enquiry, investigation or audit; or audit report etc." 8.....
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....s relating to the declarant is due, the amount in arrears." 8.3 The definition of "quantified" under Section 121(r) uses the expression "duty payable". The purpose of the definition cannot be construed as part of the duty payable as per the admission of the declarant/assessee. Thus, the combined reading of all the aforenoted provisions exposit that the tax liability which has been admitted by a person during enquiry / investigation / audit, will be included towards the final quantification of the "duty payable" and determined before 30.06.2019. 9. The Scheme or the Circular does not stipulate any eventuality which makes an assessee eligible for the Scheme on acceptance of the part of the amount of tax liability during the investigation/inquiry. The intention of the Scheme is specific and unambiguous. The benefit is only extended to those persons in whose case, the liability of the tax is quantified on or before 30.06.2019, in case any inquiry / investigation / audit is pending against the declarant. The pendency of the inquiry or investigation or an audit which finds place under the provisions of Section 123(c) read with provision of Section 125(1)(e) of Scheme elucidates tha....