TMI Blog2021 (2) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... ification, one note appended to the Statement in Form SVLDRS -2 mentioning therein that, there was a variance in the quantification of the amount under the draft audit report and letter dated 28.06.2019. If the authority did not have agreed with the amount as declared by the writ applicant, then they should not estimated the amount equal to the amount declared by the writ applicant or they could have been estimated the higher amount against the amount declared by the writ applicant. The communication dated 28.06.2019 would indicate that the respondent No.1 had quantified the amount by way of written communication. Referring to the Circular of the Board dated 27.08.2019, more particularly para 10 (g) of the said Circular, clarified in the context of various provisions of the Act, 2019, that, the cases under an enquiry, investigation or audit, where the duty demand has been quantified on or before 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 liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SVLDRS -2, no specific notice for affording the opportunity of hearing was given to the writ applicant with regard to variance of quantified amount - there is no hesitation in holding that the action of the respondent No.1 issuing statement in Form SVLDRS -2 is in contravention of the Section 127 (1) read with Rule 6 (2). The decisions of rejecting the application by the respondent No.1 were in violation of principles of natural justice. It appears from the record that, no specific amount of variance being brought into notice of the writ applicant. The only remarks appended to the statement in Form SVLDRS -2 without any specification, is not sufficient to hold that, the principles of natural justice have been complied by the respondent No.1. The contents of the rejection letter would go to show that, in the absence of any clarification on the part of the Designated Committee, the application was rejected. In this circumstances, we are of the view that, no sufficient reason being assigned on the issue of variance of the amount while rejecting the application. It is required to be noted that, the amount of variance with regard to quantification having not specifically mentioned i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm SVLDRS- 2 dated 07.02.2020 issued by respondent No.1 and seeks further direction to process the declaration made by the petitioner in Form SVLDRS- 1. 3. The reliefs as sought for by the petitioner read as under: (a) issue a writ of Certiorari, or a writ in the nature of Certiorari calling for the records in the impugned statement in Form SVLDRS -2 dated 07.02.2020 to quash the same as illegal and pass such further orders; (b) issue a writ of Certiorari, or a writ in the nature of Certiorari calling for the records in the first impugned rejection letter dated 05.02.2020 to quash the same as illegal and pass such further orders; (c) issue a writ of Certiorari or a writ in the nature of Certiorari calling for the records in the second impugned rejection letter dated 11.06.2020 to quash the same as illegal and pass such further orders; (d) issue a writ of Mandamus, or direction as the Court deems fit to the Respondent No.1 to process the petitioner's declaration in Form SVLDRS- 1 in accordance with law without being influenced by the objections raised in impugned statement in Form SVLDRS -2 dated 07.02.2020 and the first impugned rejection letter dated 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials (viz. Empty MS/Plastic drums/Bottle, corrugated, cartons, wooden pellets etc.) without payment of any Central Excise Duty. As per Rule 6 of Cenvat Credit Rules,2004 as amended vide Notification No.6/2015 CE NT dated 01.03.201, you were required to pay Central Excise Duty @ 6 %. As per details provided by you e mail, the duty liability on such clearance comes to ₹ 7,32,181/ as detailed in Annexure E. You are requested to submit the sample copies of the invoices for such clearance. 6. During sample check of the cenvat credit documents for (Dec 16 and Apr Jun, 2017), it is noticed that you have availed excess cenvat credit of ₹ 62,831/ as detailed in Annexure F. 7. Please provides the details of input service Credit availed, if any in respect of following input services for the audit period. (If not please submit the declaration). (i) Cenvat Credit taken in respect of Real Estate Agent Service; (ii) Cenvat Credit taken in respect of Club Membership Fee. (iii) Cenvat Credit taken on Erection commissioning or installation Construction service. (iv) Cenvat Credit taken in respect of Outdoor catering, Hotel accommodation. (v) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s there were further development of draft audit report dated 20.09.2019 and there was a variance between the amount mentioned in the interim letter and the draft audit report. In this circumstances, the amount determined in the letter dated 28.06.2019 cannot be construed as qualification of tax dues prior to 30.06.2019. In nut shell, stand of the respondent No.1 is that, the quantum of tax dues payable by the petitioner was not finalized before 30.06.2019, as a result, the petitioner is ineligible to make a declaration under the Scheme, 2019. 11. Learned Counsel Mr. Sujit Ghosh appearing for the writ applicant raised the following contentions : (a) It is submitted that, the respondent No.1 has acted contrary to the objective of the scheme and the petitioner is eligible to make declaration. Referring to the Section 125 (1)(e) of the Finance Act, 2019, it is submitted that, before 30.06.2019, the amount of duty has been quantified by communication/letter dated 28.06.2019 and according to the Circular dated 27.08.2019, written communication would include a letter intimating duty demand. Therefore, before the cut off date, when authority vide their letter dated 28.06.2019 int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared by the petitioner in Form SVLDRS- 1 and accordingly, the petitioner agreed with the demand estimated by the respondent No.1 by submitting Form SVLDRS -2A dated 10.02.2020. Therefore, it is submitted that, as per Section 127 (2) of the Finance Act, the Designated Committee is empowered to issue Form SVLDRS -2 only when the estimated amount exceed the amount declared by the applicant. It is further submitted that, the amount declared by the petitioner in Form SVLDRS- 1 matches with the amount payable estimated by the Designated Committee. Therefore, as per the mandate of the Scheme, the issuance of Form SVLDRS -2 by the authority is in utter disregards of the provisions of the Scheme and it is liable to be quashed and set aside. (e) Mr. Ghosh would submit that when the amount declared and the amount estimated are the same, then, the Designated Committee shall have to issue Form SVLDRS -3 by operation of the legal provisions contained in Section 127 (1) of the Finance Act, 2019. Therefore, the action on the part of the respondent No.1 Authority for issuance of Form SVLDRS -2 is in contravention with the provisions of the Finance Act, 2019. (f) Lastly, he would submit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard learned counsel appearing for the respective parties at length and perused the materials placed on record. 15. Before adverting to the rival contentions advanced by both the sides, it is relevant to refer to the relevant provisions and procedure to be followed under the Scheme, 2019. a) The scheme was introduced by the Finance (No.2) Act, 2019 and notified on 01.08.2019 and was brought into force by way of Notification dated 21.08.2019. b) The scheme was introduced with the objective of resolution and settlement of legacy cases of Central Excise and Services Act. c) Sections 120 to 135 under Chapter 5 of the Act, contains the definition, relief available under the Scheme, issuance of statement by the Designated Committee. d) Under the scheme, the term amount declared as defined under Section 121A, means, the amount declared by the declarant under Section 125 of the Act. e) The term amount estimated has been defined under Section 121(d) of the Act, which means the amount estimated by the Designated Committee under Section 127 of the Act. f) The term amount payable as defined under Section 121 (e) means, the final amount payable by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be made in such electronic form as may be prescribed. j) Section 127 of the Act empowers the Designated Committee to issue the statement in a prescribed form as provided under the Sabka Vikas (Legacy Dispute Resolution) Scheme Rules, 2019, which reads as under: 127. (1) Where the amount estimated to be payable by the declarant, as estimated by the designated committee, equals the amount declared by the declarant, then, the designated committee shall issue in electronic form, a statement, indicating the amount payable by the declarant, within a period of sixty days from the date of receipt of the said declaration. (2) Where the amount estimated to be payable by the declarant, as estimated by the designated committee, exceeds the amount declared by the declarant, then, the designated committee shall issue in electronic form, an estimate of the amount payable by the declarant within thirty days of the date of receipt of the declaration. (3) After the issue of the estimate under Sub -section (2), the designated committee shall give an opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95,051/ and in the same letter, it was directed to discharge the same at the earliest. (2) On the basis of amount fixed by the authority, the writ petitioner had submitted an application through online in Form SVLDRS- 1 declaring an amount of ₹ 1,22,18,781.50/ as being the amount payable towards the tax. (3) The Designated Committee under Sub -section (2) of Section 127 of the Act, determined the amount ₹ 1,22,18,781.05/ payable by the petitioner, which was equivalent to the declaration made by the petitioner in statement in form SVLDRS- 1. It is required to be noted that, while issuing the statement in Form SVLDRS -2, there was a note appended to the statement stating that, there was variance in the quantification of the amount under the draft audit report and letter dated 28.06.2019, which reads as under: Clarification require regarding quantification as amount of draft audit report is in variation from quantification letter dated 28.06.2019. (4) After receipt of statement in Form SVLDRS-2, the petitioner agreed with the demand estimated by the respondent No.1 and communicated its agreement vide Form SVLDRS -2A dated 10.02.2020. (5) The D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing statement in Form SVLDRS -2, after considering the declaration made by the writ applicant, the amount payable ₹ 1,22,18,781.05/ determined and estimated by the authority and the same amount reflected in the impugned Form SVLDRS -2. Therefore, at the one hand, while issuing statement in Form SVLDRS -2 by the Designated Committee estimated the amount equal to the amount declared by the writ applicant in Form SVLDRS- 1 i.e. ₹ 1,22,18,781.05/ and on the other hand, without any clarification, one note appended to the Statement in Form SVLDRS -2 mentioning therein that, there was a variance in the quantification of the amount under the draft audit report and letter dated 28.06.2019. If the authority did not have agreed with the amount as declared by the writ applicant, then they should not estimated the amount equal to the amount declared by the writ applicant or they could have been estimated the higher amount against the amount declared by the writ applicant. 21. Thus, in the aforesaid, we are of the view that, the communication dated 28.06.2019 would indicate that the respondent No.1 had quantified the amount by way of written communication. Referring to the Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the application in statement in form SVLDRS- 1 intimating the total tax dues of ₹ 2,52 95,051/ based on the amounts quantified and communicated to the writ applicant by letter dated 28.06.2019, the net amount payable by the writ applicant was mentioned ₹ 1,22,18,781.05/ and in response to the declaration, the Designated committee had estimated the same amount declared by the writ applicant and the same was confirmed by the writ applicant in issuing the statement in Form SVLDRS -2. Therefore, when the liability of tax amount estimated by the authority equal to the amount declared by the writ applicant, then, there is no reason for the authority to issue statement in Form SVLDRS -2. The respondent No.1 tried to defend the issuance of statement in Form SVLDRS -2 in their reply stating, inter alia that, the statement in Form SVLDRS dated 07.02.2020 was issued for the clarification with regard to the quantification amount was in variation with quantification letter dated 28.06.2019. 25. Referring to the statement in Form SVLDRS -2, the notice for personal hearing reflected in the Form reads as under: Notice for Personal Hearing. If the declarant does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g rejection of SVLDRS application m/reg. In reference to the above mentioned subject, it is to mention that under the Sabka Vishwa Legacy Dispute resolution Scheme, 2019 (SVLRDS) an application was filed by you with following details: ARN No.LD2712190002906 Dated 27 12 2019, Category Investigation, Enquiry or Audit. On verification it came to notice of Designated Committee of Vadodara- II Commissionerate that the application is not eligible under the Category of Investigation, Enquiry or Audit. Further SVLDRS 2 was issued to clarify if applicant fulfils criteria of category Investigation, Enquiry, Audit No Clarification has been provided by you in this regard. Hence, based on the facts of case Designated Committee- 1 Vadodara- II hereby rejects your application under ARN No.LD2712190002906. Sd/(Amit Kumar) Joint Commissioner Member, Designated Committee I Vadodara- II Date:11.06.2020 From: Sabkavishwas Vadodara -II sabkavishwasvdr2@gmai.com Sent: Thursday, June 11, 2020 12:32 PM To: Mittal, Rohit Subject: [EXTERNAL]Ref.:Intimation regarding rejection of SVLDRS application m/reg. Gentleman, Sub.: Intimation regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after giving an opportunity to be heard. In this regard, we may refer to the case of Prakash Vs. State of Bihar [2009 (4) SCC 690), wherein the Apex Court has observed as under: If there is a power to decide and decide detrimentally to the prejudice of a person, duty to act judicially is implicit in exercise of such a power and the rule of natural justice operates in areas not covered by any law validly made. Where there is nothing in the statute to actually prohibit the giving of an opportunity of being heard, the nature of the statutory duty imposed on the decision maker itself implies an obligation to hear before deciding. Whenever an action of a public body results in civil consequences for the person against whom the action is directed, the duty to act fairly can be presumed and in such a case, the administrative authority must give a proper opportunity of hearing to the affected person. 31. Thus, having regard to the discussion as above, we hold that, the statement in Form SVLDRS -2 dated 07.02.2020 is in contravention of the provisions of the Act and the Rules thereunder and the same deserves to be quashed and set aside and accordingly, it is quashed and set as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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