TMI Blog2021 (8) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... f that Act provides for penalties punishable with imprisonment, for specified offences. Plainly, same, or similar concept of confiscation exists both under the Customs Act, 1962 and the Central Excise Act, 1944. It allows the revenue authorities to seize and confiscate any goods found offending those legislations. Under both enactments, such confiscation is in addition to the other penalties prescribed against the person offending the laws in the transaction that may give rise to an act of confiscation - under both legislations, there is a right given to the offender to reclaim the title in the confiscated goods, subject to payment of an amount in addition to the other penalties that may have been imposed. That amount is known as the redemption fine , under both laws. The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 provides for (legacy dispute) resolution upon payment of thirty to sixty percent of the disputed demand of tax dues. By virtue of section 123 of the Scheme, tax dues are the total disputed amount of duty only - the legislation seeks to reduce indirect tax legacy litigation, against positive payment of a part (according to the predetermined rates) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the petitioner and Shri Ramesh Chandra Shukla, learned counsel for the revenue. 2. Present petition has been filed to quash the order dated 17.11.2020 issued by the Designated Committee, SVLDR Scheme, 2019/Commissioner Central Tax, Central Goods Services Commissionerate, Ghaziabad. By that order, the said authority has refused to issue the Discharge Certificate in electronic form, in terms of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter referred to as the 'Scheme') for reason of outstanding demand of ₹ 30 lakh against the petitioner, towards redemption fine, for the same transaction and tax period for which the Discharge Certificate has been sought, upon payment of fee computed in terms of section 124 of the Scheme. 3. Briefly, the petitioner is a partnership concern against which an Orderin Original No. 2/A/Ayukt/M-/97 dated 14.08.1997 had been passed creating duty demand of ₹ 1,05,99,382/- together with penalty ₹ 60 lac under the Central Excise Act, 1944. Also, by that order, redemption fine ₹ 30 lac had been determined against the petitioner, in lieu of confiscation of goods under that Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contend, redemption fine is penalty . Last, learned counsel for the petitioner has placed heavy reliance on the circulars and other communications issued by the departmental authorities (described as flyers and press notes in the decision of the Gujarat High Court), to submit that the departmental authorities have consistently read the provisions of the Scheme to include redemption fine as a penalty and therefore, the separate demand of redemption fine does not survive upon payment of the entire amount computed under section 124 of the Scheme. 6. Opposing the writ petition, learned counsel for the revenue submits that the Scheme is part of a fiscal statute. He has therefore invoked the rule of strict interpretation and submitted, the Scheme does not, in any way, include redemption fine within the ambit of consequences of the Discharge Certificate under section 129 of the Scheme. Therefore, unless the petitioner were to pay the entire amount of redemption fine - ₹ 30 lacs, the Discharge Certificate cannot be issued. Referring to the communication dated 20.12.2019, he would submit that the position in this regard has been clarified by the Central Board of Indirec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided under section 124 of the Scheme. It reads as under: 124. (1) Subject to the conditions specified in subsection (2), the relief available to a declarant under this Scheme shall be calculated as follows:-- (a) where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on the 30th day of June, 2019, and if the amount of duty is, - (i) rupees fifty lakhs or less, then, seventy per cent, of the tax dues; (ii) more than rupees fifty lakhs, then, fifty per cent, of the tax dues; (b) where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil, then, the entire amount of late fee or penalty; (c) where the tax dues are relatable to an amount in arrears and,- (i) the amount of duty is, rupees fifty lakhs or less, then, sixty per cent, of the tax dues; (ii) the amount of duty is more than rupees fifty lakhs, then, forty per cent of the tax dues; (iii) in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ischarge Certificate being issued are provided under section 129 of the Scheme. For ready reference, the provisions of section 129 are quoted herein below: 129. (1) Every Discharge Certificate issued under section 126 with respect to the amount payable under this Scheme shall be conclusive as to the matter and time period stated therein, and- (a) the declarant shall not be liable to pay any further duty, interest, or penalty with respect to the matter and time period covered in the declaration; (b) the declarant shall not be liable to be prosecuted under the indirect tax enactment with respect to the matter and time period covered in the declaration; (c) no matter and time period covered by such declaration shall be reopened in any other proceeding under the indirect tax enactment. (2) Notwithstanding anything contained in sub-section (1), - (a) no person being a party in appeal, application, revision or reference shall contend that the central excise officer has acquiesced in the decision on the disputed issue by issuing the Discharge Certificate under this scheme; (b) the issue of the Discharge Certificate with respect to a matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declaration is discovered within a period of one year. Clearly, none of those statutory exclusions are attracted to the facts of the case and none has been pressed into service by the revenue. 14. Under section 133 of the Scheme, the Central Board of Indirect Taxes and Customs (CBIC) has been authorised to issue orders, instructions and directions to the other authorities, for the proper administration of the Scheme. The directions so issued have been made mandatory to be observed and followed by the authorities under the Scheme. For ready reference, the provisions of section 133 are quoted below: 133. (1) The Central Board of Indirect Taxes and Customs may, from time to time, issue such orders, instructions and directions to the authorities, as it may deem fit, for the proper administration of this Scheme, and such authorities, and all other persons employed in the execution of this Scheme shall observe and follow such orders, instructions and directions: Provided that no such orders, instructions or directions shall be issued so as to require any designated authority to dispose of a particular case in a particular manner. (2) Without prejudice to the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Fine' denote different things. Section 9 of the Central Excise Act, 1944 provides for the offences and penalties under the Act. The penalties for the offences under the Act may extend to seven years of imprisonment and fine. Needless to say that once the person is granted immunity from prosecution, he also gets waiver from such 'fine'. However, redemption fine is levied in lieu of confiscation Section 34 of the Act, whereby the party can 'redeem' the confiscated goods. Under the scheme, no immunity (Section 129) or relief (Section 124) has been granted for redemption fine. 3. A 'case' under the scheme means 'a show cause notice, or one or more appeals arising out of such notice which is pending as on 30.06.2019' [explanation to rule 3, SVLDRS Rules, 2019]. In the instant case, the SCNs also involve imposition of redemption fine. There are two scenarios that can emerge: (a) The SCN involving redemption fine has been adjudicated. In this case, redemption fine has been imposed and quantified. (b) The SCN involving redemption fine is yet to be adjudicated. In other words, the redemption fine has not been imposed or quantified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary implication, be taken to have decided that it was not a fit case where special leave should be granted. It may be due to several reasons. It may be one or more. It may also be that the merits of the award were taken into consideration and this Court felt that it did not require any interference. But since the order is not a speaking order, one finds it difficult to accept the argument put forward on behalf of the appellants that it must be deemed to have necessarily decided implicitly all the questions in relation to the merits of the award. A writ proceeding is a different proceeding... Again, in Kunhayammed Ors. v. State of Kerala Anr. , (2000) 6 SCC 359 , it was conclusively laid down by the Supreme Court: 40. A petition seeking grant of special leave to appeal may be rejected for several reasons. For example, it may be rejected (i) as barred by time, or (ii) being a defective presentation, (iii) the petitioner having no locus standi to file the petition, (iv) the conduct of the petitioner disentitling him to any indulgence by the court, (iv) the question raised by the petitioner for consideration by this Court being not fit for consideration or dese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 141 of the Constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court. However this would be so not by reference to the doctrine of merger . 18. Thus, the order dated 03.03.2021 dismissing the Special Leave to Appeal neither laid down the law of the land nor did the order of the Gujarat High Court merge in that order of the Supreme Court. Therefore, the Gujarat High Court decision has only persuasive value. That we are bound to consider. 19. With all respect, we face our own difficulty and reservations in accepting (in toto), the reasoning contained in the decision of the Gujarat High Court. Merely because the petitioner was eligible to apply for Discharge Certificate under the Scheme, it would not therefore make it entitled to issue of a Discharge Certificate. That eligibility arises under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of proper administration of its Scheme. Therefore, we are not inclined to look at the other communications (flyers and press notes) relied upon by learned counsel for the petitioner. Second, those communications do not contain expression of any opinion that redemption fine is penalty under section 129 (1) of the Scheme. Third, the communication dated 20.12.2019 clearly does not support the submission advanced by learned counsel for the petitioner. It speaks of redemption fine being different from penalty . Therefore, we are unable to accept the submission advanced by learned counsel for the petitioner on that count. 23. The rule of Contemporanea Expositio may apply only to cases where, in the first place, the revenue authorities have looked at the law in a particular way and that view taken in favour of the assessee has sustained over a period. Here, neither condition is satisfied. The view taken by the Central Board of Indirect Taxes and Customs is not in favour of the petitioner and, in any case, the Scheme is a recent enactment over which there is no consistent view taken by the departmental authorities. 24. Coming to the main issue, whether redempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edemption Acts and many other statutes . Redemption is the act of redeeming which in its ordinary meaning is equal to bringing off a charge or obligation by payment. To what extent this redemption freed the land or its holder from the obligation depends not so much upon what the obligation was before redemption as what remained of that obligation after it. Here, the payment itself was meant to be an immediate payment of one sum equal in value to the revenue redeemed (vide the Resolution of Government dated October 17, 1861). By the down payment, the entire land revenue to be recovered from that land was redeemed. The payment was equal to the capitalised value of the land revenue. When such a payment took place, it cannot be said that the assessment for land revenue remained. The land was freed from that assessment as completely as if there was no assessment. Thenceforward, the land would be classed as revenue-free, in fact and in law. In The Land-Law of Bengal (Tagore Law Lectures, 1895) p. 81 S.C. Mitra described these revenue-free lands as follows: There is another class of revenue-free lands which comes within these rules laid down in the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to the offender to reclaim that title in those goods through payment of redemption fine , in addition to all other dues of tax/duty, interests and liabilities of other penalties. 28. Considering the nature of confiscation under the Foreign Exchange Act, a five judge Constitution Bench of the Supreme Court in Sewpujanrai Indrasanarai Ltd. v. Collector of Customs Ors., AIR 1958 SC 845, at that early stage, had made a distinction between the penalty imposed on a citizen for violating the law and, a penalty imposed on the offending goods, both penalties arising from one transaction. The first was categorized as a penalty in personam, visiting the offender/person whereas confiscation was held to be a penalty in rem, visiting the goods. That penalty being imposed on the offending goods may be imposed even if the ownership in the goods remains undetermined or in doubt or in dispute and even if a penalty in personam may remain from being imposed. In paragraph 15 of that decision, it was held as below: (15) We do not so decide, but let us assume that the construction put forward on behalf of the appellant is the one that should be accepted in this case. The question then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of prejudicing its provisions by the adoption of the procedure under the Sea Customs Act can at all arise. 29. The question again arose in another case before the Supreme Court in Collector of Customs, Madras Ors. v. D. Bhoormall, (1974) 2 SCC 544, in the context of the Customs Act, 1878. The same principle was followed and applied. The imposition of penalty on the offender was treated to be a penalty in personam whereas the penalty of confiscation of the goods was treated to be penalty in rem. Relevant to our discussion in paragraphs 22 and 23 of the aforesaid decision, it was held: 22. A reading of Section 167(8) and the related provisions indicates that proceedings for confiscation of contraband goods are proceedings in rem and the penalty of confiscation under the first part of the entry in column (3) of clause (8) of the Schedule, is enforced against the goods irrespective of whether the offender is known unknown. But, imposition of the other kind of penalty, under the second part of the entry in column (3), is one in personam ; such a penalty can be levied only on the person concerned in any offence described in column (I) of the clause. 23. Goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of confiscation under the Act and a fine in lieu thereof is somehow different. Redemption fine must necessarily also be considered a 'penalty' against the offending goods. Further, in absence of any contrary statutory definition of the word 'penalty' or other specific exclusion of 'redemption fine' from the consequences of issuance of a Discharge Certificate (under section 129 of the Scheme), undoubtedly, the word 'penalty' appearing in section 129 of the Scheme includes, within its plain ambit, both, a penalty in personam and a penalty in rem. Here, both, personal penalty and the penalty in rem arose from a single transaction. Clearly, both penalties are part of the same dispute, for a common period. It is so because even according to the revenue both those penalties were imposed vide the Order-in-Original 2/A/Ayukt/M/97 dated 14.08.1997. Though that order has not been shown to us, yet it is not the case of the revenue that the redemption fine in question was imposed on the petitioner, independent of that order. The revenue only contends that by its very nature, redemption fine is not a penalty at all. That submission is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to include all inams. It further opined that any exclusion claimed must arise on unimpeachable evidence and not ipse dixit. It was thus held: 12. Returning to the present case, to be out of Act 26, the area of grant to the appellants should not constitute to be a part-village estate and for this the appellants have to prove that its grant was expressed only in terms of acreage or cawnies etc. . Unless this is shown exclusion from the Act cannot be gained. Looking back to the history of legislation of inam estates, the intention of the legislature was to encompass all inam estates within its fold and if small exclusion is made, the exclusion has to be read keeping with the intention of legislation. The exclusion cannot be read by ipse dixit but only through clear and unimpeachable evidence. The legislature further makes it clear through sub-section (9) of Section 2 of Act 30 of 1963 that it is only such area of grant which is not included within the purview of Act 26 of 1963 as will constitute to be minor inam under Act 30 of 1963 . 35. As noted above, the Scheme being a piece of reformative legislation, redemption fine that is a penalty in rem must clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oppel . We have no reason to apply a different yardstick to allow the respondent authorities to overlook the clear and binding statutory provision, in favour of the concession claimed to have been made by the petitioner. The concession, if any, made by the petitioner in the Discharge Certificate proceedings - to deposit the redemption fine , would remain contrary to the express provision of law and therefore unenforceable and of no consequence. 37. In the result, upon the petitioner being eligible under section 125 of the Scheme and upon payment of the entire amount due under section 124 of the Scheme and, in absence of any other objection being raised by the revenue, clearly, the petitioner is entitled to issue of the Discharge Certificate. 38. Accordingly, the present petition is allowed. The communication dated 20.12.2019 issued by the CBIC providing for payment of redemption fine in addition to the settlement amount paid under section 124 of the Scheme and further providing that the Discharge Certificate under the Scheme may not be issued unless that fine has been paid, is clearly contrary to the Scheme. To that extent it is unenforceable against the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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