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M/s. NRC Limited Versus Union Of India & Ors.

2015 (11) TMI 821 - SUPREME COURT

Benefit of KVSS - tax arrears - Levy of additional duty of customs - whether the case of the appellant is covered by KVSS and more particularly by Section 87(m)(ii)(b) of the KVSS or it is excluded by the provisions of Section 95(ii)(b) of the said Scheme - Held that:- in those cases where show cause notice had been issued or where the notice of demand for payment of indirect tax had been issued, it was permissible for the declarant to claim the benefit of the Scheme. In the absence of such show .....

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custom duty and landing charges was assessed. It is a different matter that for the sake of convenience and in order to comply with the interim directions of the High Court, insofar as the additional duty on basic and auxiliary custom duty and landing charges is concerned, the same was not actually recovered but was secured by means of bank guarantee. In any case, there were clear endorsements in respect of demand of this additional duty made on the Bills of Entries by the Assessing Officer. Thi .....

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r. V. Mohan, Adv. And M/s Gagrat & Co.,Adv. For the Respondent : Mr. A. K. Panda, Sr. Adv., Mr. Arijit Prasad, Adv., Mr. R. S. Jena, Adv. And Mr. B. Krishna Prasad, Adv. ORDER A.K.SIKRI, J. The appellant herein had imported Caprolactum for use in manufacture of Nylon Tyre Cord sometime in May, 1986. The appellant filed the Bill of Entry declaring the value of goods on which the import duty was payable. The Customs Authorities, however, took the view that in addition to normal duty, additiona .....

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om levying and/or recovering the additional duty on basic and auxiliary custom duty and landing charges. In this writ petition, interim order dated 02.05.1986 was passed by the Bombay High Court restraining the respondent from recovering and/or levying additional duty under the Customs Tariff Act, 1975 and the import of Caprolactum in future was permitted to be cleared on payment of additional duty on CIF price of goods only. A condition was, however, put directing the appellant to furnish a ban .....

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rsed on Bill of Entry the additional duty @ of 15% on aggregate value of CIF price, basic and auxiliary custom duty and landing charges. However, since the matter was pending in the High Court, separate endorsements were also made on the Bills of Entry specifying the differential duty and the goods were allowed to be clared on receiving the bank guarantee for differential duty. Ultimately, the writ petition was dismissed by the Bombay High Court on 28.06.1994. Insofar as the stay order which was .....

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of ten weeks which was granted by the High Court has also expired in August, 1994 and because of this reason the respondents wrote another communication dated 12.08.1994 to the bank for encashment of the said bank guarantee to recover the outstanding differential duty. In the meantime, order of Bombay High Court was challenged by the appellant by filing special leave petition in this Court. In the said special leave petition interim order dated 14.11.1994 was passed by this Court permitting the .....

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s Scheme the Government invited the tax payers to settle tax arrears by availing substantial discount and immunity from prosecution. As per Section 88(f) of the Finance Act, 1988, an amount of 50% of the tax dues was payable by the declarant for availing the benefit of the Scheme. The appellant herein with a view to take the benefit of this KVSS, filed its declaration thereunder on 29.12.1998. In this declaration it was stated that the total demand of differential duty was in the sum of ₹ .....

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as not covered by the KVSS and the case of the appellant fell under the exclusion clause of Section 95(ii)(b) of KVSS inasmuch as there was neither any show cause notice nor a demand notice issued prior to 31.03.1998. This order of rejection was challenged by the appellant by filing writ petition No. 2528 of 1999 in the Bombay High Court. Insofar as the appeal which was filed by the appellant challenging the earlier decision of the Bombay High Court dated 28.06.1994 is concerned (Civil Appeal No .....

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the demand notice within the meaning of Section 95(ii)(b) of KVSS? On remand the Designated Authority passed an order dated 14th June, 2001 and rejected the application of the appellant once again giving the reason that there were no tax arrears as contemplated by Section 87(m)(ii)(b) of the KVSS and also that the case of the appellant was covered by Section 95(ii)(b) of the said Scheme and, therefore, the appellant was not entitled to the benefit under the Scheme. Against this order, the appel .....

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d clauses of the two Sections are re-produced as under: Section 87: xxxxxx xxxxxx (m) tax arrear means,- (i) in relation to direct tax enactment, the amount of tax, penalty or interest determined on or before the 31st day of March, 1998 under that enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration; (ii) in relation to indirect tax enactment,- (a) The amount of duties (including drawback of d .....

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of March, 1998 under that enactment but remaining unpaid on the date of making a declaration under Section 88, but does not include any demand relating to erroneous refund and where a show-cause notice is issued to the declarant in respect of seizure of goods and demand of duties, the tax arrear shall not include the duties on such seized goods where such duties on the seized goods have not been quantified. Explanation.- Where a declarant has already paid either voluntarily or under protest, an .....

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this Scheme shall not apply- xxxxxx xxxxxx (ii) In respect of tax arrear under any indirect tax enactment,- xxxx (b) In a case where show cause notice or a notice of demand under any indirect tax enactment has not been issued; A plain reading of the aforesaid two provisions would indicate that in those cases where show cause notice had been issued or where the notice of demand for payment of indirect tax had been issued, it was permissible for the declarant to claim the benefit of the Scheme. In .....

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n the said basis. The Customs Authority, acting on the order, not only asserted the additional duty @ 15% on aggregate value of CIF price but even this additional duty on basic and auxiliary custom duty and landing charges was assessed. It is a different matter that for the sake of convenience and in order to comply with the interim directions of the High Court, insofar as the additional duty on basic and auxiliary custom duty and landing charges is concerned, the same was not actually recovered .....

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.) v. Commissioner of Income Tax, Karnataka[2], this Court widely interpreted the term 'total tax determined and payable' appearing in Section 87(f) of the Scheme holding that no particular process of determination is contemplated. It has to be held that on principle, same meaning is to be accorded to the term 'determined as due or payable' in Section 87(m)(ii)(a) of the Scheme. 17. There is another manner of looking into the matter. Immediately after receiving the Bill of Entry .....

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