TMI Blog2021 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory intent to allow for change of case category from Litigation to Arrears or to redetermine of the tax dues and EAP upon an adjudication order coming into existence during the pendency of proceedings under the Scheme. Therefore, once the petitioner had (rightly) filed the (first) declaration on 10.10.2019 under the case category Litigation , determination of the EAP amount would be governed accordingly. It cannot be changed, thereafter. In absence of any statutory risk to the adjudication proceedings being hit by any rule of limitation, those proceedings should necessarily have been kept in abeyance till the conclusion of the proceedings under the Scheme. We cannot contemplate, what useful purpose could be served by continuing and concluding the adjudication proceeding during the pendency of the proceedings arising upon filing of the (first) declaration on SVLDRS-1, under the Scheme, on 30.10.2019. In fact, by their conduct the authorities under the Act could not have defeated the object of an otherwise valid proceedings under the Scheme. In absence of any consequence of abatement etc. being prescribed either by the Scheme or the Rules, the time limit of sixty ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter referred to as 'the Scheme'), to the extent, the Estimate Amount Payable ('EAP' in short) has been determined at ₹ 70,11,055.50 against total disputed tax dues taken at ₹ 1,40,22,111/-. According to the petitioners, the net EAP amount should have been computed at ₹ 15,37,816.00 against the total disputed tax dues ₹ 80,75,626/- only, after adjusting the amount of ₹ 25,00,000/- pre-deposited by the petitioners to maintain their appeals, filed earlier. A further consequential mandamus has been sought, effectively to issue the final SVLDRS-3, etc. Last, challenge has been raised to the adjudication order dated 30.12.2019 passed, pending the proceedings under the Scheme. 3. Undisputedly, the petitioners were earlier issued a Show Cause Notice dated 05.06.2015 proposing a demand of central excise duty, ₹ 1,40,22,111/-, under the Central Excise Act, 1944 (hereinafter referred to as 'the Act'). That proceeding culminated in the Order-in- Original dated 26.09.2016. Thereby, the central excise duty demand was confirmed at ₹ 80,75,626/- only. Thus, the cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.12.2019 and 26.12.2019. These facts and documents are on record. They have not been denied by the revenue. Some hearing also appears to have taken place. However, no final demand of EAP on SVLDRS-3, was issued by the Designated Committee. 7. While that proceeding remained thus pending, the Clarification Application filed by petitioner no. 1 came to be allowed by the Tribunal, on 7.1.2020. The Tribunal clarified that the subject matter of adjudication proceedings (in remand), pending before the Adjudicating Authority, was only with respect to the proposed demand ₹ 80,75,626/-, as no appeal had been filed by the revenue against the Order-in-Original dated 26.09.2016. 8. On 30.12.2019, respondent no.3 passed the Order-in-Original, ostensibly in compliance of the Tribunal's order dated 15.5.2019 and adjudicated the Show Cause Notice dated 5.6.2015, on merits. It confirmed the disputed duty liability of the petitioner at ₹ 80,75,626/- and dropped the duty liability to the extent ₹ 59,46,648/-. 9. The Scheme that was to originally expire on 31.12.2019, was extended by the Central Government up to 15.01.2020. On 31.12.2019, the petitioner no.1 file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15.05.2019 and there was no specific stay order operating against the same, in any proceeding. 13. Therefore, the proceedings in remand, arising under that order did not suffer from any inherent lack of jurisdiction or authority. At the same time, by necessary implication, springing from section 127(5) (127(5) The declarant shall pay electronically through internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of thirty days from the date of issue of such statement.) of the Scheme, the petitioner no. 1 had time till 03.01.2020 to deposit the net EAP amount communicated to it vide the (first) SVLDRS-2, issued on 04.12.2019, or to object to the same under section 127(3) (127(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 the declarant: Provided that on sufficient cause being shown by the declarant, only one adjournment may be granted by the designated committee.) read with section 127(4) (127(4) After hearing the declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty payable by the declarant; (c) 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 the 30th day of June, 2019; (d) where the amount has been voluntarily disclosed by the declarant, then, the total amount of duty stated in the declaration; (e) where an amount in arrears relating to the declarant is due, the amount in arrears.) read with section 124 (124. Relief available under Scheme. (1) Subject to the conditions specified in sub-section (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 sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Scheme, the computation of the tax dues and consequently determination of the EAP would depend on the case category Litigation or Arrears . The computation of the EAP under Litigation i.e. pending adjudication case category, would be substantially lower than that computed under the Arrears category. There is a complete absence of any statutory intent to allow for change of case category from Litigation to Arrears or to redetermine of the tax dues and EAP upon an adjudication order coming into existence during the pendency of proceedings under the Scheme. Therefore, once the petitioner had (rightly) filed the (first) declaration on 10.10.2019 under the case category Litigation , determination of the EAP amount would be governed accordingly. It cannot be changed, thereafter. 15. Also, by virtue of section 127(8) (127(8) On payment of the amount indicated in the statement of the designated committee and production of proof of withdrawal of appeal, wherever applicable, the designated committee shall issue a discharge certificate in electronic form, within thirty days of the said payment and production of proof.) read with Section 129(1)(a) (129. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ret the meaning of the word penalty appearing in Section 129(1)(a) (129. Issue of discharge certificate to be conclusive of matter and time period. (1) Every discharge certificate issued under section 126 with respect to the amount payable under this Scheme shall be conslusive 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;) of the Scheme. Here also, if we allow the Adjudicating Authority to conclude an adjudication proceeding during the pendency of a Discharge Certificate proceeding, it would run contrary to the intention of the Scheme to bring an end to the disputes under the Act. Any interpretation given to the Scheme as may defeat its purpose and object of the reform, must therefore be rejected. A purposive interpretation must therefore be adopted. 18. Then, under section 127(5) (127(5) The declarant shall pay electronically through internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of thirty days from the date of issue of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a particular method, it could not have been demanded or paid otherwise. That rule stands long settled since a four Judge Supreme Court decision in Patna Improvement Trust Vs. Smt. Lakshmi Devi, AIR 1963 SC 1077. 19. For the above reasons and in absence of any statutory risk to the adjudication proceedings being hit by any rule of limitation, those proceedings should necessarily have been kept in abeyance till the conclusion of the proceedings under the Scheme. We cannot contemplate, what useful purpose could be served by continuing and concluding the adjudication proceeding during the pendency of the proceedings arising upon filing of the (first) declaration on SVLDRS-1, under the Scheme, on 30.10.2019. In fact, by their conduct the authorities under the Act could not have defeated the object of an otherwise valid proceedings under the Scheme. 20. That said, we are unable to reach a conclusion that the respondent no. 3 lacked inherent jurisdiction to pass the Order-in- Original dated 30.12.2019. As discussed above, we conclude that the said order was tainted with impropriety, to the extent that order was passed during thirty (30) days from issuance of the SVLDRS-2 on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic form indicating the amount payable by the declarant, shall be issued within a period of sixty days from the date of receipt of the declaration.) of the Scheme read with Rule 6(2) (Rule 6 Verification by designated committee and issue of estimate, etc.- (1) .. (2) The statement under sub-sections (1) and (4) of section 127, as the case may be, shall be issued by the designated committee electronically, within a period of sixty days from the date of receipt of the declaration under sub-rule (1) of rule 3, in Form SVLDRS-3 setting forth therein the particulars of the amount payable: Provided that no such statement shall be issued in a case where the amount payable, as determined by the designated committee is nil and there is no appeal pending in a High Court or the Supreme Court.) of the Rules. Since no communication was made to the petitioners on SVLDRS-3, the time provided under section 127(5) (127(5) The declarant shall pay electronically through internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of thirty days from the date of issue of such statement.) of the Scheme h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 121(c)(i) (121(c) amount in arrears means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of (i) no appeal having been filed by the declarant against an order or an appeal before expiry of the period of time for filing appeal; or (ii) an order in appeal relating to the declarant attaining finality; or (iii) the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he has admitted a tax liability but not paid it;) read with section 123(a)(i) (123. Tax dues. For the purposes of the Scheme, tax dues means - (a) where- (i) a single appeal arising out of an order is pending as on the 30th day of June, 2019 before the appellate forum, the total amount of duty which is being disputed in the said appeal; (ii) more than one appeal arising out of an order, one by the declarant and the other being a departmental appeal, which are pending as on the 30th day of June, 2019 before the appellate forum, the sum of the amount of duty which is being disputed by the declarant in his appeal and the amount of duty b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction , laid down by a Constitutional Bench of the Supreme Court in Hiralal Patni Vs. Sri Kali Nath, AIR 1962 SC 199, in the context of regular civil proceedings applies with equal force to the present quasi-judicial proceeding. 26. As to the first submission advanced by learned counsel for the petitioner, in view of the discussion made above, first, we are of the view, once a valid (first) declaration dated 30.10.2019 had been filed on SVLDRS-1, it had to be processed by the Designated Committee. In fact, that Committee did not accept the petitioner s disclosure thus made. Accordingly, it issued demand of EAP on SVLDRS-2 on 04.12.2019 and fixed 06.12.2019 as the date for the post-decisional hearing, in terms of section 127(3) (127(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 the declarant:) Provided that on sufficient cause being shown by the declarant, only one adjournment may be granted by the designated committee. of the Scheme. The Designated Committee also took on record written ..... X X X X Extracts X X X X X X X X Extracts X X X X
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