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TMI Blog2021 (9) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner, Central GST Division/respondent no.6, seeking recovery of interest and penalty Rs. 74,36,934/-. 3. Further, mandamus has been sought to re-compute the amount payable under the Scheme as also for refund claimed. Insofar as challenge to the validity of Rule 8(3A) of the Central Excise Rules, 2002 is concerned, the same has not been pressed. 4. Present writ petition has been filed by M/s Unitech Machines Ltd.- petitioner no.1 and M/s UM Autocomp Pvt. Ltd.-petitioner no.2. It has been submitted, earlier, M/s United Machines Ltd. had two manufacturing divisions, namely an auto division and an engineering division. It had incurred liabilities both under the Central Excise Act, 1944 and also towards Service Tax, under the Finance Act, 1994. 5. According to the petitioners, petitioner no.1 filed its return under the Central Excise Act on Form ER-1 on time, for the period September 2016 to February 2017 and also for the period April 2017 to June 2017. Thus, total excise duty liability was admitted at Rs. 26,62,16,761/-. Of that, it discharged Central Excise duty liability to the extent of Rs. 16,68,84,918/-, by the due date. The balance Central Excise duty was dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heavy reliance has been placed on Circular No. 1073/06/2019.CX dated 29.10.2019 issued by the CBIC Clause 2(iii) read with Circular No. 1072/05/2019.CX dated 25.09.2019 Clause 2(iv)(b). Thus, it has been submitted, though the petitioner no.1 had paid the amount of Central Excise duty and Service Tax yet, owing to delayed payments of that duty and tax, the petitioner no.1 was eligible to make an application on Form SVLDRS-1 as it is not a person ineligible for making such application under any of the Clauses (a to h) of Section 125(1) of the Scheme. The Estimated Amount Payable should have been computed as 'zero'. In any case, the second declaration filed on Form SVLDRS-1, should have been entertained. 10. Second, it has been submitted, no demand of interest or penalty could be pressed against the petitioners without being preceeded by any order of adjudication passed under Section 11 of the Central Excise Act, 1944. By means of paragraph no.54 of the writ petition, it has been specifically stated that no such adjudication had taken place. That averment has not been denied by means of paragraph no.32 of the counter affidavit filed by the respondent. 11. Third, it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not paid it and the duty amount indicated is,-- (A) rupees fifty lakhs or less, then, sixty per cent, of the tax dues; (B) amount indicated is more than rupees fifty lakhs, then, forty per cent, of the tax dues; (d) where the tax dues are linked to an enquiry, inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utation of relief under Section 124(c) of the Scheme, the phrase "amount in arrears" means the amount of Central Excise or Service Tax or Cess dues recoverable as arrears of duty under any indirect tax enactment (specified under Section 122 of the Scheme) that may be admittedly payable but may not have been paid upto that date. 19. The phrase "amount of duty" conveys a singular meaning under the Scheme. It is the amount of Central Excise duty or an amount of Service Tax or a Cess payable under any of the specified indirect tax enactments. No other amount whether by way of interest or penalty can ever be categorized as an amount of duty, especially as the entire scheme conveys that singular meaning. 20. No provision of the Scheme indicates - an amount of duty would include interest or penalty in the definition of the words "amount in arrears". 21. Once a valid settlement is reached, then, by way of a consequence provided under Section 129(1)(a) of the Scheme no interest or penalty liability may exist. Consequently, for the purposes of Sections 121(1)(c), 123(e), 124(1)(c) and 125(1)(f) also, the "amount in arrears" would be referable only to duty liability outstanding and not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in the context of arrears of confirmed demand. It is clarified that these also cover the cases of arrears of tax liability admitted under returns filed on or before 30.06.2019." 26. Further paragraph no. 2(iv) of the Circular dated 25.09.2019 reads as below:- "2(iv) Section 121(c) defines an amount in arrears as the amount of duty which is recoverable as arrears of duty. Further, Section 123 defines 'tax dues' in respect of arrears as the amount which is due in arrears. In other words, tax dues is the amount of duty which is outstanding against the declarant. This is the net amount after deducting the dues that he has already paid. Such payment may be in the form of pre-deposits appropriated or paid subsequently by the tax payer voluntarily against the outstanding amount. It is clarified that the relief available under Section 124(1)(c) will be applied to the net outstanding amount so arrived at. It may be noted that in respect of all other categories, any money paid before its appropriation is in the nature of a deposit only. Hence, in respect of declarations made under these other categories, the relief will be applied to the outstanding amount and, only thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r penalty. 30. This is also not a case under Section 123(c) of the Scheme, inasmuch as, the petitioner no.1 does not contend that the amount of penalty and interest had ever been quantified in writing, by any means. The procedure i.e. manner of filling up the statutory Form SVLDRS-1 or the explanations furnished cannot create any right to the relief claimed that otherwise does not exist under the Scheme. 31. In view of the above reasons, the first submission advanced by learned counsel for the petitioners cannot be accepted. For the same reasons, no recoveries are possible to be made pursuant to any determination made under the Scheme. 32. Insofar as the other contention has been raised, the same appears to be wholly well founded, inasmuch as Rule 8(4) of the Central Excise Rules, 2002 reads as under:- "8(4). The provisions of section 11 of the Act shall be applicable for recovery of the duty as assessed under rule 6 and the penalty under sub-rule 3(A) in the same manner as they are applicable for recovery of any duty or other sums payable to the Central Government." Therefore, before any recovery of interest or penalty may be enforced against the petitioners it would have to ..... 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