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2020 (3) TMI 1096

..... dated 20 December, 2016 passed by the Tribunal) till the date of payment of refund amount or not - HELD THAT:- It is not possible to accept this submission of the learned Authorized Representative of the Department. As noticed by the Commissioner (Appeals), the dues pertaining to the orders dated 18 October 2001 and 23 February 2001 confirming the demands, were not disclosed by the Department or the earlier management to the BIFR and the same were not considered in the scheme sanctioned by BIFR. The BIFR had also by order dated 22 May, 2002 protected the management from recovery of dues which were not disclosed by the old management or not provided for in the package approved by the BIFR. It is not the case of the Department that the dues pertaining to the aforesaid two orders confirming the demands had been disclosed by the Department or the earlier management to the BIFR. The proceedings before the BIFR had not been assailed before any appellate forum. Appeal dismissed. - EXCISE APPEAL NO. 50248 OF 2019-DB - FINAL ORDER NO. 50145/2020 - 24-1-2020 - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT AND HON BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri O.P. Bisht, Authorized Representative .....

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..... was declared sick by BIFR in 1992. A scheme for the rehabilitation of the sick industrial company was sanctioned by the BIFR on 03 May, 1994 by an order made under section 18(4) read with section 19(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 SICA. The scheme was modified on 10 May, 1996. However, the modified scheme also failed to revive the company. Thereafter, offer was received through advertisement by the BIFR for taking over of the company. A fresh scheme, by way of Change of Management of the company through induction of a new management under Captain K.S. Solanki was sanctioned by the BIFR on 22 November, 2000. The sanctioned Scheme, interalia, envisaged payment of dues of Financial Institutions and restructuring of dues of Bank and payment to various statutory Authorities, including the Central Excise Department. The scheme sanctioned by the Board by order dated 22 November, 2000 also fixed the cut-off date as 31 March, 2000. The relevant portion of the sanctioned scheme is reproduced hereunder:- 6.E: Government of India:- (xviii) Not to claim any other liability which was not taken/disclosed in the books by the old management or not provided in the .....

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..... e the dues mentioned by the Department of Central Excise, pertained to the period prior to the cut-off- date (31.03.2000) mentioned in the SS, the new management was protected against the recovery of such dues in terms of para 6 (E) (XVIII) of the SS which provided that GOI would not claim from the new management any other liability which was not taken/disclosed in the books by the old management or not provided for the in the package approved by BIFR (due to default of the old management or the Deptt. in disclosing such dues) and the Bench also opined that old management was legally bound to bear the ultimate liability in respect of such undisclosed dues. iii. The BIFR, vide Para 9 of summary record of proceedings of the subsequent review hearing held on 24.03.2003, held that these claims were neither raised by the Deptt. during the during the circulation of the DRS nor even during the RH held on 02.05.2000 when the Bench heard the objections/suggestions from the concerned agencies and against clarified that the new management would not be liable for payment of any additional claim from Central Excise Department, which was not covered in the SS/disclosed in the books of accounts p .....

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..... Misc./RECL/96/2784 dt. 31.10.2013, having department affidavit, where in para 9 of the said affidavit/comments, it has been stated that department has given benefit of the sanctioned scheme, involving revenue of ₹ 462.62 lacs; ₹ 462.62 lacs includes the amount pertaining to OIO No. 5/2001 dt. 23.02.2001 and SCN V(3602)15/offence/50/98/10736-44 dt. 03.10.2000; he failed to produce letter by which departmental claims were lodged on the ground that being old the said record is not traceable; he could not give any plausible reason to why claim pertaining to OIO No. 5/2001 dt. 23.02.2001, in SCN dt. 03.10.2000, in which search was conducted on 08.11.1997 was not lodged; he was unable to specify reasons, why an appeal was not filed against the scheme; he could not give any plausible reason why the order has not been implemented in terms of the observation of the Hon ble BIFR in summary record of procedure of the review hearing held on 24.03.2003 and he admitted that there is nothing on record that a contrary view has been taken by any authority to this advice in respect of legal advice, given by Sh. Kamalakar Sharma, ASG of India, vide his letter dt. 15.01.2007. 20. In view o .....

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..... ed as Annexure R/7. That the BIFR also forwarded a letter dated 09.03.2006 to the company, while, referring to its earlier letter dated 13.12.2005 addressed to the Central Excise Department, it clarified that the department was informed that the company has been discharged from the purview of SICA and the recovery of dues, if any, be done in terms of the Sanctioned Scheme (MS-2000) sanctioned by the Board on 22.11.2000 for revival of the company. A copy of the letter dated 09.03.2006 addressed to the company by the BIFR is annexed herewith and marked as Annexure R/8. However, the department continued to trouble the respondent company with the tax demands and recovery proceedings, as stated aforesaid in 2009, in contravention to the sanctioned scheme on account which the respondent filed a Miscellaneous Applications No. 444/2013 and 252/2014 before the BIFR seeking relief of restraining the department to not pursue/file recovery proceedings against the respondent wherein the Central Excise Department in their reply dated 17.10.2013 filed in M.A. No. 444/2013 categorically stated in Para-9 that the benefit of the sanctioned scheme has already been given to the company in 4 cases invo .....

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