TMI Blog2020 (12) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... the period from 2015-16 upto June, 2017 with further clarification that an amount of ₹ 1,20,60,000.00 was already paid. It is evident that the word quantified under the scheme would mean a written communication of the amount of duty payable which will include a letter intimating duty demand or duty liability admitted by the person concerned during enquiry, investigation or audit or audit report and not necessarily the amount crystalized following adjudication. Thus, petitioner was eligible to file the declaration in terms of the scheme under the category of enquiry or investigation or audit as its service tax dues stood quantified before 30.06.2019. Matter remanded back to the Designated Committee to consider afresh the declaration of the petitioner dated 24.11.2019 as a valid declaration and grant the consequential relief after giving due opportunity of hearing to the petitioner who shall be informed about the date, time and place of the hearing - petition allowed by way of remand. - WRIT PETITION (L) NO.4421 OF 2020 - - - Dated:- 8-12-2020 - UJJAL BHUYAN ABHAY AHUJA, JJ. Mr. Rajendra R. Mishra a/w. Mr. Mukesh Gupta for Petitioner. Mr. Pradeep Jetly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry, statement of Shri. Sanjay Shirke, Director of petitioner company was recorded under section 83 of Chapter V of the Finance Act, 1994 read with section 14 of the Central Excise Act, 1944 read with sections 174 and 70 of the CGST Act on the same day i.e., on 27.06.2019 before the said Senior Intelligence Officer. In the said statement, in response to query No.3, he admitted and accepted revised service tax liability of ₹ 2,47,32,456.00 for the period from 2015-16 upto June, 2017 and that service tax of ₹ 1,20,60,000.00 was already paid. He further stated that the remaining amount of service tax along with interest and penalty would be paid by end of July, 2019. 7. In the meanwhile, Central Government introduced a scheme called the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly the scheme hereinafter) as part of Finance (No.2) Act, 2019. 01.09.2019 was the due date fixed for the commencement of the scheme. Rules under the said scheme called Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 were also framed and notified. 8. Petitioner filed declaration in terms of the said scheme on 24.11.2019 under the category Investigation, Enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent writ petition has been filed seeking the reliefs as indicated above. 11. Notice in this case was issued on 15.10.2020. 12. In response respondents have filed affidavit in reply through Mr. Rajesh Sanan, Commissioner of CGST and Central Excise, Mumbai Central Commissionerate. A ground has been taken that DGGI, Mumbai Zonal Unit has not been added as a respondent to the writ proceeding. Therefore, writ petition suffers from non-joinder of necessary party. 12.1. Referring to section 123(1)(c) of Chapter V of Finance Act, 2019, it is contended that a declaration under the category of Investigation, Enquiry or Audit can be filed where the amount of duty payable had been quantified on or before 30.06.2019. Declaration of the petitioner was forwarded to the Additional Director, DGGI, Mumbai Zonal Unit for verification. As per verification report dated 24.01.2020, it was mentioned that declaration of the petitioner fell under the exception clause of section 125(1)(e) of Chapter V of Finance (No.2) Act, 2019 as the final quantification in the enquiry had not been done before 30.06.2019. 12.2. Designated Committee had granted personal hearing to the petitioner on 10.02.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance (No.2) Act, 2019 (briefly the Act hereinafter) comprises the scheme. Section 123 defines tax dues for the purposes of the scheme. As per clause (c) of section 123, where an enquiry or investigation or audit is pending against the declarant, the amount of duty payable under any of the indirect tax enactment which has been quantified on or before 30.06.2019 would be the tax dues . The word quantified has been defined in section 121(r) to mean a written communication of the amount of duty payable under the indirect tax enactment. 17. Section 124 deals with relief available to a declarant under different categories as per the scheme. Clause (d) of sub section (1) of section 124 provides that where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before 30.06.2019 is rupees fifty lakhs or less, then the relief available to the declarant would be seventy per cent of the tax dues; and if the amount quantified on or before 30.06.2019 is more than rupees fifty lakhs, then fifty percent of the tax dues would be available as relief to the declarant. 17.1. Sub-section (2) of section 124 clarifies that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the duty involved is quantified and communicated to the declarant or admitted by the declarant in a statement on or before 30.06.2019, the relief available would be 70% of the duty involved if it is ₹ 50 lakhs or less and 50% if it is more than ₹ 50 lakhs. 22.2. Likewise, clause (g) of paragraph 10 is relevant and the same is extracted hereunder :- 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. * * * * * * 22.3. Clause (g) of paragraph 10 makes it abundantly clear that cases under an enquiry, investigation or audit where the duty demand had been quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India decided on 26.11.2020 , it was held as follows:- 27. We have already noticed that proprietor of the petitioner in his statement recorded on 11.01.2018 by the investigating authority admitted the service tax liability of ₹ 60 lakhs (approximately) to be outstanding for the period from 20152016 to June, 2017. This was corroborated by the departmental authority in the letter dated 24.01.2018 which we have already noted and discussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the petitioner the amount of duty involved had been quantified on or before 30.06.2019. In such circumstances, rejection of the application (declaration) of the petitioner on the ground of being ineligible with the remark that investigation was still going on and the duty amount was pending for quantification would not be justified. 28. This position has also been explained by the department itself in the form of frequently asked questions (FAQs). Question Nos.3 and 45 and the answers provided thereto are relevant and those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the scheme is successful. 28. Though not very relevant, we may still deal with the objection of the respondents regarding non-rejoinder of what is contended to be a necessary party. In the affidavit of the respondents it is contended that petitioner did not make DGGI, Mumbai Zonal Unit a respondent in the writ petition and on this ground, relief should be declined. In the present proceeding, petitioner is concerned with rejection of its declaration under the scheme. The rejection is by the Designated Committee comprising of officers under respondent No.2. Communications of the officials working under respondent No.2 with officials of DGGI is an internal matter on the basis of which the declaration of the petitioner was rejected. Thus, neither DGGI, Mumbai Zonal Unit nor any of its officials are necessary parties to the present proceeding. This objection is, therefore, without any substance. 29. Considering the above, we set aside the order dated 01.03.2020 and remand the matter back to the Designated Committee to consider afresh the declaration of the petitioner dated 24.11.2019 as a valid declaration and grant the consequential relief after giving due opportunity of hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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