TMI Blog2020 (11) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... able in law should not aggravate the situation of the person who avails the remedy. In other words, a person should not be placed in a worse position as a result of filing an appeal. No reformatio in peius or prohibition of reformatio in peius is a part of fair procedure and thus by extension can also be construed as part of natural justice. It is not only a procedural guarantee but is also a principle of equity. The initial show cause-cum-demand notice dated 17.01.1992 cannot be said to be in existence after the order in original was passed on 29.03.2006 which order has been accepted by the department. Quantification of dues had been done which was accepted by the department - Since the figures i.e., demand amounts in the order in original dated 29.03.2006 have been accepted by the respondents, it is those figures which would be material and not the figures mentioned in the show cause-cum-demand notice. Petitioners cannot be put in a worse off condition or the situation faced by them cannot be aggravated because they had availed the remedy of appeal or had sought relief under the scheme which is a beneficial one. Having regard to the objective of the scheme, in a case of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount determined by the adjudicating authority in the order in original which amount has been accepted by the department though the order in original has been set aside by the appellate forum? 5. For the sake of convenience we take up the facts and pleadings in Writ Petition No.818 of 2020 wherein the relevant figures in respect of the other two writ petitions are also mentioned. 6. Petitioner is a private limited company incorporated under the Companies Act, 1956 having its office at Malad (West), Mumbai. 7. The three petitioners were issued show cause-cum-demand notice dated 17.01.1992 from the office of Collector of Central Excise, Bombay-II on the allegation that petitioners had contravened provisions of the Central Excise Rules, 1944. In the show cause-cum-demand notice the amounts stated to be due against each of the three petitioners were mentioned as under:- 1. M/s. Jyoti Plastic Works Private Limited (Petitioner in Writ Petition No.818 of 2020) ₹ 66,18,763.00 2. M/s. Jai Plastics (Petitioner in Writ Petition No.828 of 2020) ₹ 21,79,966.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was acceptance by the department as to the determination of the amounts due from the petitioners. 12. However, petitioners preferred appeals against the said order in original dated 29.03.2006 before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai (CESTAT) under section 35F of the Central Excise Act, 1944. In the appeals the principal prayer made was for setting aside that portion of the order in original dated 29.03.2006 passed by the Commissioner of Central Excise, Mumbai-V which was against the petitioners and thereby to allow the appeals in entirety with consequential reliefs. 13. CESTAT heard the appeals together and by the order dated 30.10.2017 remanded the matter back to the adjudicating authority to decide the issue on merit apart from quantification. CESTAT opined that when on the previous occasion Tribunal had remanded the matter for re- quantification the issue on merit was kept open. Remand was not confined to re-quantification but adjudication post remand was confined to quantification only. In such circumstances, CESTAT set aside the order in original dated 29.03.2006 and remanded the matter back to the adjudicating authority to pass a fresh orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified percentage of tax dues. 16. In terms of the scheme, petitioners filed applications (declarations) under the category litigation and sub-category show cause notice involving duty pending . As per the declarations filed by the petitioners disputed tax dues were mentioned as ₹ 6,15,017.00, ₹ 10,12,375.00 and ₹ 2,66,193.00 as determined by the Commissioner in the order in original dated 29.03.2006. However, respondent No.2 i.e. the Designated Committee constituted under the scheme issued form SVLDRS-2 stating that the estimated amount payable by the applicants (declarants) were ₹ 66,18,763.00, ₹ 21,79,966.00 and ₹ 6,91,535.00 i.e. the amounts originally demanded in the show cause-cum-demand notice dated 17.01.1992. Though petitioners filed objections and personal hearing was granted, form SVLDRS-3 was issued reiterating the same amount as mentioned in form SVLDRS-2. 17. Aggrieved, the writ petitions have been filed seeking the reliefs as indicated above. 18. When the three writ petitions were moved before this court on 17th February, 2020, this court had passed the following order :- 2. These Petitions which have been filed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n we feel that affidavit of the respondents would be necessary. 6. Accordingly we direct respondents to file reply affidavit within three weeks from today. 7. Petitioners may file rejoinder affidavit thereafter. Thereafter separate but identical affidavits in reply were filed by the respondents through Mr. Sanjeev V. Chetule, Assistant Commissioner of Central Goods and Service Tax and Central Excise, Mumbai West, Commissionerate. 19. It is stated that petitioner had filed the declaration under section 125 of the scheme in respect of the show cause-cum-demand notice dated 17.01.1992. Show cause-cum-demand notice was adjudicated vide order in original dated 29.03.2006 (issued on 30.03.2006) by the Commissioner of Central Excise, Mumbai-V whereby the demand was partially confirmed to the extent of ₹ 6,15,017.00 as against the original demand of ₹ 66,18,763.00. As a matter of fact, the above order in original dated 30.03.2006 was passed on remand by the CEGAT, Mumbai vide order dated 28.03.1994. Appeal to CEGAT was made against the initial order in original dated 10.02.1993. 19.1 Against the order in original dated 29.03.2006 whereby the duty demanded w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause- cum-demand notice. 19.7 Refuting the contention of the petitioner that its declaration should be categorized under litigation category, it is contended that as no appeal was pending against the subject order in original, the declarant is not entitled for relief in terms of the reduced amount of tax dues as mentioned in the order in original. Since the subject case has derived the status of pending show-cause notice, the total tax dues appearing in the show cause-cum-demand notice i.e. ₹ 94,90,264.00 has to be taken into consideration for giving any relief under the scheme and not ₹ 18,93,585.00 as claimed by the petitioners. In this connection, reliance has been placed on section 123, more particularly on clause (b) thereof. 20. Mr. Sridharan, learned counsel for the petitioner submits that entire approach of the respondents is wrong. Respondents have completely overlooked the primary objective of the scheme and adopted an approach which defeats the very purpose of this scheme. Idea behind the scheme is to unload the baggage of legacy litigations relating to service tax and excise. It is a beneficial provision intended to confer certain benefits o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he adjudicating authority had not concluded the adjudication on or before 30.06.2019. Therefore, the show cause-cum-demand notice was pending as on 30.06.2019. If that be so, then the amount of dues as per the show cause-cum-demand notice would be the tax dues. Accordingly, the Designated Committee rightly treated the amount of ₹ 66,18,763.00 in the case of the petitioner and total amount of ₹ 94,90,264.00 in respect of all the three petitioners as the tax dues. There is no infirmity in the view taken by the respondents. Accordingly, writ petitions should be dismissed. 22. Submissions made by learned counsel for the parties have been duly considered. Also perused the materials on record. 23. From the above narration and submissions it is evident that facts are not in dispute. However, for proper appreciation of the rival contentions and for arriving at a just conclusion, it would be apposite to highlight the undisputed facts culled out from the above which are relevant for adjudication. 24. The three petitioners were issued show cause-cum-demand notice by the Collector of Central Excise on 17.01.1992 raising the following demand against each one of them and col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,535.00, demand became ₹ 2,66,193.00. Against the total demand of ₹ 94,90,264.00, after order in original dated 29.03.2006, it became ₹ 18,93,585.00. 28. Respondents in their affidavit have made a categorical statement that the order in original dated 29.03.2006 was accepted by the department and no departmental appeal was filed against the said order. On the other hand, petitioners preferred appeal before the CESTAT. Contention of the petitioners before CESTAT was that the adjudicating authority while passing the order in original dated 29.03.2006 on remand had confined its adjudication only to quantification and did not go into the challenge made by the petitioners on merit, limitation, etc. The prayer was to set aside the offending portion of the order in original dated 29.03.2006 and grant relief to the petitioners in toto. This view point of the petitioners was accepted by the CESTAT and by order dated 30.10.2017, the matter was remanded back to the adjudicating authority to decide the issue on merit apart from quantification. To enable the adjudicating authority to pass a fresh order in original, CESTAT set aside the order in original dated 29.03.2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme and also analyzed the statement of objects and reasons of the scheme. This Court had also examined the circular dated 27.08.2019 issued by the Central Board of Indirect Taxes and Customs. Thereafter, it was noted that the scheme has been introduced as a one time measure for liquidation of past disputes of central excise and service tax as levy of central excise and service tax has now been subsumed in the new goods and service tax (GST) regime. The scheme has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. As an incentive, those making the declaration and paying the declared tax verified and determined in terms of the scheme would be entitled to certain benefits in the form of waiver of interest, fine, penalty and immunity from prosecution. After a threadbare analysis of the relevant provisions of the scheme, this Court held that the basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. Focus is to unload this baggage of the pre- GST regime and allow business to move ahead. Therefore, a liberal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 100 and penalty of ₹ 10. The amount of duty which is being disputed is ₹ 900 plus ₹ 100 i.e ₹ 1000 and hence tax dues are ₹ 1000. Illustration 4: The show cause notice to a declarant was for an amount of duty of ₹ 1000. The order was for an amount of duty of ₹ 1000. The declarant files an appeal against this order of determination. The first appellate authority reduced the amount of duty to ₹ 900. The declarant files a second appeal. The amount of duty which is being disputed is ₹ 900 and hence tax dues are ₹ 900; (b) where a show cause notice under any of the indirect tax enactment has been received by the declarant on or before the 30th day of June, 2019, then, the amount of duty stated to be payable by the declarant in the said notice: Provided that if the said notice has been issued to the declarant and other persons making them jointly and severally liable for an amount, then, the amount indicated in the said notice as jointly and severally payable shall be taken to be the amount of duty payable by the declarant; (c) where an enquiry or investigation or audit is pending against the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and was pending as on 30.06.2019. Therefore, this situation is not one which can be said to be covered by clause (b). 37. We have already noted and discussed that against the total demand of ₹ 94,90,264.00 made in the show cause-cum-demand notice, the order in original dated 29.03.2006 had substantially reduced the same to ₹ 18,93,585.00, with corresponding reduction of demand vis-a-vis each of the petitioners. Had the petitioners accepted the order dated 29.03.2006 like the respondents had accepted and had the petitioners not preferred appeals before the CESTAT, ₹ 18,93,585.00 would have been the determined tax dues of the petitioners, with break up thereof as under:- 1. M/s. Jyoti Plastic Works Private Limited (Petitioner in Writ Petition No.818 of 2020) ₹ 6,15,017.00 2. M/s. Jai Plastics (Petitioner in Writ Petition No.828 of 2020) ₹ 10,12,375.00 3. M/s. N. D. Patel (Petitioner in Writ Petition No.821 of 2020) ₹ 2,66,193.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans that a person should not be placed in a worse position, as a result of filing an appeal. It is a latin phrase, expressing the principle of procedure, according to which, using the remedy at law, should not aggravate the situation of the one who exercises it. 26. Had the assessee not filed an appeal, it would not be placed in a situation of inviting an adverse order, on the aspect of clandestine removal. A party who files an appeal, expects that the appellate authority would only address the grounds of appeal, made against the order impugned, and the appellant does not expect the appellate authority to go beyond the scope of appeal, and pass an order, adverse to his interest, in which event, it certainly creates a worse situation for the appellant/assessee, in his own appeal, than the order under challenge. 27. As rightly contended by the learned counsel for the appellant, instead of addressing the issue, as to whether, the appellate authority had acted beyond the scope of the appeal, and exceeded in his jurisdiction, the Tribunal passed an order, impugned before us, elaborating, as to how, adjudication has to be done, with reference to the aspect of clandestine remova ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 18,93,585.00 45. These amounts would now be the tax dues of the petitioners and this position would not change because of the subsequent order of the CESTAT dated 30.10.2017 setting aside the order in original dated 29.03.2006 for the purpose of deciding afresh the whole issue on merit, limitation etc. apart from quantification. As a technicality the order in original dated 29.03.2006 had to be set aside. Since the figures i.e., demand amounts in the order in original dated 29.03.2006 have been accepted by the respondents, it is those figures which would be material and not the figures mentioned in the show cause-cum-demand notice. Petitioners cannot be put in a worse off condition or the situation faced by them cannot be aggravated because they had availed the remedy of appeal or had sought relief under the scheme which is a beneficial one. 46. Thus having regard to the objective of the scheme, in a case of this nature, a reasonable and pragmatic approach has to be adopted so that a declarant can avail the benefits of the scheme; a declarant who seeks benefit under the scheme cannot be put in a worse off condition than he was before makin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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