TMI Blog2021 (10) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... n of duty was done prior to June 30, 2019. The demand of the duty quantified/finalised by the Audit Raigad was only under letter dated August 29, 2019. The respondents categorically denied that the said e-mails are intimation as regards the tax amount having been quantified finally. It is further stated in the affidavit-in-reply that as the petitioner did not provide any further documentary evidence, a letter dated September 4, 2018 was issued to the petitioner for providing necessary clarification. No doubt it is only on the basis of the communications placed on record and the impugned letter that its action is to be justified by the respondents - there are substance in the contention of the respondents that the final quantification in terms of the scheme was done only on August 29, 2019 and not prior to the cut-off date viz. June 30, 2019. In the present facts, it is found that the learned counsel for the petitioner has not been able to demonstrate and/or there is nothing on record to indicate that the duty liability is admitted by the petitioner. On the contrary, though the amount is quantified by the letter dated August 29, 2019, the petitioner goes ahead and addresses th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia challenging the validity and legality of the impugned letters, rejecting the application made by the petitioner under the Scheme for settlement of the amount of excise duty payable. 3. The petitioner is a company registered under the Companies Act, 1956 duly allotted the Central Excise Registration as well as the GST registration. The petitioner is engaged in manufacture and supply of steel. The office of respondent No.4 (Commissioner, CGST and CX) conducted EA-2000 audit on the records of the petitioner for the period April 2015 to June 2017. During the course of scrutiny on records of the petitioner, Circle X, Group I, GST Audit, Raigad, sought following details from the petitioner vide email dated April 4, 2018 :- i) Invoices in respect of which CENVAT Credit was availed and subsequently reversed on account of nonpayment of consideration to the vendors within 90 days from the date of the invoices, as per Rule 4(7) of the CENVAT Credit Rules, 2004 (hereinafter referred to as Credit Rules ). ii) Invoices in respect of CENVAT Credit re-availed once the payment was made by the Petitioner to the vendors, as per the provisions under Rule 4(7) of the Credit Rules. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of challenge in the present petition. 6. The petitioner vide communication dated May 21, 2020 addressed to respondent No.3 highlighted the errors in the rejection letter which were apparent on the face of record and requested for the reconsideration of the petitioner s application. The respondent No.4 proceeded to issue Show Cause Notice dated June 24, 2020 and demanded a payment of duty amount of ₹ 75,64,008/-. Again by a letter dated July 21, 2020, the petitioner requested the respondent No.3 to decide the petitioner s representation for reconsideration of the application. In the absence of any response to the said letters for reconsideration, the petitioner is constrained to file the present petitions. SUBMISSION OF LEARNED COUNSEL FOR THE PETITIONER 7. Learned counsel for the petitioner invited our attention to the relevant provisions of the Scheme and the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (hereinafter referred to as the said Rules for short). Our attention is also invited to the circular dated August 27, 2019 to submit that the Scheme is a bold endeavour to unload the baggage relating to the legacy taxes viz. Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first time only on September 4, 2019, which is after the cut-off date. The communication relied upon by the petitioner at Exhibit C dated October 31, 2018 cannot be said to be a quantification. Learned counsel submits that e-mail dated March 22, 2018 of Audit Commissionerate is only an excel sheet prepared by the Audit Commissionerate on the basis of the details submitted by the petitioner. According to him, the communication nowhere mentions that the duty/tax amount is quantified as payable and that, it is conclusive for the entire period under consideration of EA-2000. In his submission, the Audit Commissionerate called upon the petitioner to submit additional records vide letter dated September 4, 2018 and after receipt of information, finally quantified the amount and intimated the same to the petitioner vide letter dated August 29, 2019. He submits that in fact the Audit department had called for information from the petitioner vide letter dated September 4, 2018 and had quantified the amount of tax only after receipt of requisite documents from the petitioner. Hence, it is submitted that as the demand of duty has not been quantified/finalised by the Audit department prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declarant is entitled under the Scheme where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount is quantified on or before June 30, 2019. Section 121(r) of the Finance Act, 2019 defines the term quantified as a written communication of the amount of duty payable under the indirect tax enactment. 14. It is also material to refer to the relevant portion of circular dated August 27, 2019 issued by the respondent No.2 in accordance with the power entrusted thereupon under Section 133 of the Finance Act, 2019, wherein it has been clarified as under :- (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. 15. The Frequently Asked Questions (FAQs) issued on the Scheme by the Ministry of Finance reiterate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d April 4, 2018, the petitioner s response reads thus :- Sir, Pl. find attached as desired by you. Pl. confirm Best Regards VIJAY K Patil Excise Deptt. Mob.8108094920/Direct 02143277874/Extn No.7087 JSW STEEL LTD DOLVI WORKS Along with the said communication dated April 4, 2018, the necessary details in respect of the invoices of which the CENVAT Credit was availed was provided by the petitioner. (C) By a communication dated September 4, 2018 at Exhibit B , the respondents called upon the petitioner to submit clarification in respect of the matters stated therein. The relevant portion of the said letter reads thus :- 2) Further it is also observed that in the ER-1 filed by you and submitted to this office for audit, the opening balance and closing balances of the products manufactured and cleared by you do not match. Please clarify on this issue also. 3) During the course of audit, inadmissible credit in many invoices were noticed and clarification was sought from you on the said issue. However, till date, the clarification is not received. 4) Details clarification in r/o CENVAT credit taken after one year period on input s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated September 4, 2018 was issued to the petitioner for providing necessary clarification. No doubt it is only on the basis of the communications placed on record and the impugned letter that its action is to be justified by the respondents. We have referred to the affidavit-in-rely only to ensure that the stand taken by the respondents is in consonance with the communication and the impugned letter and nothing more. 20. Now a reference to paragraphs 7 and 8 of the communication dated August 29, 2019 would be relevant. Paragraph 7 of the said letter reads that on reconciliation of both the annexures, it appears that you have taken CENVAT credit as re-credit without reversal of CENVAT credit for an amount of ₹ 75,65,008/- (Basic ₹ 73,43,696/- Ed.Cess ₹ 1,46,882/- S H Ed. Cess ₹ 73,430/-) (Detailed as per Annexure-A). You are therefore requested to pay the amount along with interest and penalty. Further, in paragraph 8 the petitioner is intimated about the inadmissibility of an amount of ₹ 4,44,64,068/- and a request is made to pay amount with interest and penalty. We therefore find substance in the contention of the respondents that the final qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion, merely because the calculations made by the petitioner on the basis of the invoices matches with the quantification made by the department on August 29, 2019 will not stand to benefit the petitioner as what is contemplated is a quantification by the department in view of Section 121 (r) of the Finance Act, 2019. These invoices submitted during the course of audit without the petitioner admitting the duty liability would not amount to quantification within meaning of the Scheme. 23(A). We now consider the decisions relied upon by learned counsel in support of the petitioner s case. Relying on the decision in Seventh Plane Networks Private Limited Vs. Union of India and ors. 2020 (8) TMI 343-Delhi High Court, learned counsel for the petitioner submitted that the Delhi High Court is of the view that even if the duty liability stood admitted in an oral statement by the petitioner before June 30, 2019, consequence thereof is the duty liability stood quantified prior to the cut-off date in accordance with the beneficial circulars. Reliance is also placed on the observations made by Their Lordships that a liberal interpretation has to be given to the Scheme of 2019 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided in favour of the petitioner. Such are not the facts in the present case. This decision again, does not further the petitioner s cause. (D) Reliance is then placed on the decision of this Court in the case of Thought Blurb Versus Union of India and ors 2020(10) TMI 1135-Bombay High Court. This was the case where the duty liability was admitted by the petitioner. However, there was a mistake in declaring the tax dues in the application and hence, this Court held that in such a case because of the mistake in declaring the tax dues for the later period on the higher side, no benefit would accrue to the petitioner; such a mistake could have been rectified had a hearing been given to the petitioner. It is in these circumstances, the Designated Committee was directed to decide the application (declaration) afresh after giving an opportunity of hearing to the petitioner. The decision in Thought Blurb (supra) is in a different context altogether. (E) Let us now consider the decision in Landmark Associates Versus Union of India and ors. 2021(1) TMI 385-Bombay High Court relied by the learned counsel for the petitioner. After considering the decisions of this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel for the petitioner in Joseph Daniel Massey Vs. Union of India and ors. Writ Petition (St.) No.3151 of 2020 again is in the facts of that case where this Court observed that the petitioner in a communication addressed to the respondent No.3 had specifically mentioned that the service tax amount due to be paid by the petitioner was ₹ 40,95,110/-. 24. We may now turn to the decision of this Court relied upon by learned counsel for the respondents in the case of Shri SiddhiKumar Infrastructure Private Limited Vs. Union of India, Ministry of Finance and others Writ Petition (L) No.3556 of 2020 dated February 17, 2021. This Court was considering a case where the petitioner had in fact made a categorical statement that the service tax liability as calculated was not acceptable to the petitioner. This Court was of the opinion that there being no admission of the petitioner as to its liability of service tax dues prior to the cut-off date of June 30, 2019, declaration of the petitioner was rightly rejected. In the present facts, we find that the learned counsel for the petitioner has not been able to demonstrate and/or there is nothing on record to indicate th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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