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TMI Blog2008 (8) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise and Salt Act, 1944. 4. With the amendment of Central Excise Rules, 1944 with effect from 14th May, 1992, the petitioner was duly registered under Rule 174 of the said Central Excise Rules. 5. According to the petitioner, the petitioner has, at all material times maintained, and still maintains the requisite books of accounts and documents, in terms of the provisions of the Central Excise Act, 1944. 6. The petitioner is a subsidiary of Philips India Ltd., a company incorporated under the Indian Companies Act, 1913 and an existing company within the meaning of the Companies Act, 1956. 7. The electrical goods manufactured by the petitioner are sold to Philips India Ltd. and Philips India Ltd. sells the said electrical goods in the market. 8. A dispute arose between the Central Excise authorities and the petitioner with regard to the mode of assessment of the assessable value of the goods manufactured by the petitioner at its factory. 9. While the petitioner contended that the goods should be assessed, taking into account the price at which the petitioner sold the goods to Philips India Ltd., the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Sections 86 to 98) are set out hereinbelow for convenience : "87. In this Scheme, unless the context otherwise requires,-- (a) "declarant" means a person making a declaration under Section 88; (b) ...................... (c) "disputed chargeable expenditure", in relation to an assessment year, means the whole or so much of the chargeable expenditure as is relatable to the disputed tax; (d) "disputed chargeable interest", in relation to an assessment year, means the whole or so much of the chargeable interest as is relatable to the disputed tax; (e) ................. (f) "disputed tax" means the total tax determined and payable, in respect of an assessment ' year under any direct tax enactment but which remains unpaid as on the date of making the declaration under section 88; (j) "indirect tax enactment" means the Customs Act, 1962 (52 of 1962) or the Central Excise Act, 1944 (91 of 1944) or the Customs Tariff Act, 1975 (51 of 1975) or the Central Excise Tariff Act, 1985 (5 of 1986) or the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be determined at the rates specified hereunder, namely :- (a) ......... (b) ......... (c) ......... (d) ........ (e) ........ (f) where the tax arrear is payable under the indirect tax enactment - (i) in a case where the tax arrear comprises fine, penalty or interest but does not include duties (including drawback of duty, credit of duty or any amount representing duty) or cesses, at the rate of fifty per cent, of the amount of such fine, penalty or interest, due or interest, due or payable as on the date of making a declaration under section 88, (ii) in any other case, at the rate of fifty per cent, of the amount of duties (including drawback of duty, credit of duty or any amount representing duty) or cess due or payable 'on the date of making a declaration under section 88. 89. A declaration under section 88 shall be made to the designated authority and shall be in such form and shall be verified in such manner as may be prescribed. 90. (1) Within sixty d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such writ petition, appeal or reference with the leave of the Court, furnish proof of such withdrawal along with the intimation referred to in sub-section (2). 91. The designated authority shall, subject to the conditions provided in section 90, grant immunity from instituting any proceeding for prosecution for any offence under any direct tax enactment or indirect tax enactment, or from the imposition of penalty under any of such enactments, in respect of matters covered in the declaration under section 88. 93. Any amount paid in pursuance of a declaration made under section 88 shall not be refundable under any circumstances. 94. For the removal of doubts, it is hereby declared that, save as otherwise expressly provided in sub-section (3) of section 90, nothing contained in this Scheme shall be construed as conferring any benefit, concession or immunity on the declarant in any assessment or proceedings other than those in relation to which the declaration has been made." 16. With the enforcement of the Kar Vivad Samadhan Scheme with effect from 1st September, 1998, the petitioner became eligible to file a declaration before the designated authority declaring the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as entitled to settle tax arrears, that is, the amount of all duties, cesses, interest, fine or penalty determined as due and payable on 31st March, 1998 under any indirect tax enactment covered by the said Scheme, but remaining unpaid as on the date of making the declaration under Section 88 of the Finance Act, or the amount of all duties, cesses, interest, fine or penalty which constituted the subject matter of a demand notice or a show cause notice issued before 31st March, 1998 under any indirect tax enactment covered by the said Scheme, but remaining unpaid on the date of the declaration under Section 88 of the Finance Act. Such tax arrears could finally be settled by payment of 50% thereof. 25. Immediately on receipt of the certificate, the petitioner protested against inclusion therein of Rs. 1,40,00,450/- representing contingent sales tax liability. The petitioner, however, paid the entire amount demanded, to avoid losing the benefit offered under the scheme. 26. After payment, the petitioner made an application for amendment of the certificate and prayed for refund of the excess amount of Rs. 50,20,297 being the 50% of the contingent sales tax lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid order, the petitioner made a representation dated 17th August, 2001, to the Commissioner of Central Excise. The aforesaid representation was followed by another representation dated 3rd October, 2001. 29. By an order No. CC/Kol-1/No-40/2001 dated 10th October, 2001, which is impugned in this writ application, the Commissioner of Central Excise rejected the claim of the petitioner for refund of Rs.50,20,207. The reasoning as contained in the order impugned is extracted hereinbelow : "Further when the sale price of related person is basis, the excise duty and sales tax, as per Section 4(4)(d)(ii) are to be excluded from the gross sale price, this is with reference to the judgment of Hon'ble Tribunal in the case of Pilco Pharma v. Collector reported in 1987 (29) E.L.T. 523 (Tri). In view of the above I would like to mention that in the instant case, the sale tax paid or payable by the assessee on account of selling of their goods to the brand name owners is not the sale in terms of Section 4(1) 1(a), rather in the instant case : Sale is made in terms of Section 4(1)(a)(iii), hence the abatement on account of sales tax would be from the wholesale price i.e. the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m payable under the scheme shall be conclusive as to the matters stated therein and no matter covered by such order shall be re-opened in any other proceedings." Further, I would like to mention that in the Finance (No. 2) Act 1998 (KVSS 1998) there is no provision to refund any amount which has been settled under the said Act. Every particular case should be dealt under the provisions of the said particular Act only, as there is no provisions in the said Act for refunding any amount, being the creature of statute, the Commissioner of Central Excise can not act beyond the provision of statute." 30. It is a matter of record that the Central Excise authorities had claimed additional excise duty of Rs. 18,64,40,549/- from the petitioner. The petitioner was thus, in terms of the Kar Vivad Samadhan Scheme entitled to settle the dispute at 50% of the aforesaid amount of Rs. 18,64,40,549/- that is, at Rs. 9,32,20,275/-. 31. Admittedly, the designated authority had added contingent liability of Rs. 1,40,00,450/- to the claim on account of excise duty and the petitioner had been required to pay 50% of the total amount. In other words, the petitioner has had to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taxes running into lakhs and crores. 38. Be that as it may, the Kar Vivad Samadhan Scheme had been framed by legislative enactment. The designated authority had no power or authority or jurisdiction to modify the Kar Vivad Samadhan Scheme. 39. As on 31st March, 1998, there was no determination of liability, demand or show cause in respect of Rs. 1,40,00,450/-added to the Certificate in addition to the amount declared by the petitioner. Furthermore, under the Kar Vivad Samadhan Scheme, there could be no question of settlement of any sales tax arrears. 40. Section 90(3) of the Finance Act, 1998, provides that every order of the designated authority under sub-section (1), determining the sum payable under the scheme shall be conclusive as to the matters stated therein, and no matter covered by such order shall be re-opened in any other proceeding under the direct tax enactment or indirect tax enactment or any other law for the time being in force. 41. The argument of Mr. Datta that issuance of a certificate determining the sum payable under the Scheme in itself puts a stamp of finality to the matters stated therein and no matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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