TMI Blog2022 (8) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- It is an admitted fact that declarations of the petitioners have been accepted by the Designated Committee and Form SVLDRS-3 has been issued to them and the only dispute pertains to the amount payable by the declarants. Petitioner-Aloke Dutta contends that the Designated Authority has determined a sum of Rs. 1,34,32,364.40/- as payable by the petitioner, whereas, as per the Scheme, it is only liable to pay an amount of Rs. 36,22,401/-. Similarly, in the case of M/s. Vassu Enterprises, the amount payable has been determined as Rs. 1,05,59,869.80/-, whereas, as per the petitioner, the amount payable is only Rs. 80,64,412.20/-. Admittedly, there is no dispute with respect to the amount determined in the Order-in-Original and/or the amount of deposit/pre-deposit made by petitioners, but the only dispute in the instant cases, is with respect to computation of the amount payable by the declarants. As per petitioners, amount of arrears means the amount of duty which is reflected as recoverable in the Orders-in-Original, being the tax dues amount, and, accordingly, relief under Section 124(1)(c)(ii) is to be granted on the said amount; whereas, as per the Revenue, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 124(2), it would be evident that the amount of deposit made during enquiry, investigation or audit is required to be deducted after extending relief under section 124(1) of the Scheme and at the time of issuing statement indicating the amount payable by a declarant - the action of Designated Committee by first deducting the amount of deposit made by petitioners during enquiry, investigation or audit and, thereafter, extending relief to the petitioners by computing the amount of tax due on the outstanding amount, is not as per the mandate of the Scheme. Further, clause 2 (iv) of Circular No.1072/05/2019/CX dated 25.09.2019, to the extent it provides that tax relief is to be granted on the outstanding duty amount, as against the amount of duty recoverable, has an effect of altering the effect of the Scheme itself and cannot be given effect to. The Designated Committee is directed to re-compute the amount payable by petitioners under the scheme in view of the observations made, and to issue revised SVLDRS-3 Form to the petitioners within a period of four weeks from the date of this order - application allowed. - HON BLE MR. JUSTICE APARESH KUMAR SINGH AND HON BLE MR. JUSTICE DE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner was directed to show cause as to why the amount paid by petitioner during investigation and/or recovered u/s 87 of the Finance Act, 1994 be not appropriated against the service tax demanded from the petitioner. 4. Petitioner appeared pursuant to issuance of the show cause notice and submitted its reply and, thereafter, an Order-in-Original No. 07/S.Tax/Commr./2019 dated 11.07.2019 was passed by Respondent No.3, wherein a demand of Rs. 4,69,12,227/- towards service tax for the period January, 2013 to March, 2016 was raised against the petitioner and, further, penalty of equivalent amount u/s 78 of the Finance Act, 1994 was also imposed upon the petitioner. Further, penalty of Rs. 10,000/- u/s 77(2) of the Finance Act and Late Fee of Rs. 1,19,400/- was also ordered to be recovered from the petitioner. 5. The Parliament, in the meantime, vide Chapter V of the Finance Act, 2019 dated 1st August, 2019, incorporated therein provisions of SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019 (in short Scheme), which was notified vide Notification dated 21st August, 2019 with effect from 1st September, 2019. Pursuant to the Notification of the said Scheme, petitioner applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the petitioner was to be categorized under category Arrears , the amount payable under the Scheme would be Rs. 36,24,401/- and not Rs. 1,34,32,364.40/-. As per the writ petitioner, computation of the amount payable under the Scheme would be as under:- (i) Amount of duty/tax dues Rs. 4,69,12,227.00/- (ii) Tax relief @ 40% of outstanding Duty/tax dues Rs. 1,87,64,890.80/- (iii) Balance outstanding dues Rs. 2,81,47,336.20/- (iv) Less amount of pre-deposit Rs. 2,45,24,953.00/- (v) Balance payable Rs. 36,24,401.00/- 7. The brief facts of the case in W.P.(T) No. 2422 of 2020 is that the petitioner is also a Proprietorship concern and is engaged in the business of providing services of Cargo Handling and Supply of Tangible goods. On allegation that petitioner was not properly discharging its service tax liability, office of DGCEI, Regional Unit, Jamshedpur initiated enquiry/ investigation proceeding against the petitioner for the period January, 2013 to March, 2016, and, it is an admitted fact that during the process of enquiry/investigation, a sum of Rs. 61,84,644/- was deposited by the petitioner. A show cause notice was issued to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced from the amount of tax dues and, thereafter, on the balance outstanding dues, tax relief has been extended to the petitioner. Designated Committee raised the demand under the Scheme as per the following calculations:- (i) Amount of duty/tax dues Rs. 2,37,48,427.00/- (ii) Amount of pre-deposit Rs. 61,84,644.00/- (iii) Balance outstanding dues Rs. 1,75,99,783.00/- (iv) Tax relief @ 40% of outstanding dues Rs. 70,39,913.20/- (v) Balance payable Rs. 1,05,59,869.80/- 10. However, as per petitioner, relief to be extended to it would be as under:- (i) Amount of duty/tax dues Rs. 2,37,48,427.00/- (ii) Tax relief @ 40% of outstanding Duty/tax dues Rs. 94,99,370.80 /- (iii) Balance outstanding dues Rs. 1,42,49,056.20/- (iv) Less amount of pre-deposit Rs. 61,84,644.00/- (v) Balance payable Rs. 80,64,412.20/- 11. Thus, as per the petitioner, the amount payable was only Rs. 80,64,412.20/- as against the demanded amount of Rs. 1,05,59,869.80/-, and, taking exceptions to the above, petitioner has filed the present writ application. 12. Mr. Sumeet Gadodia, leaned counsel for the petitioner while advancing arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability is also determined electronically without any manual calculations by petitioners. It has been submitted that the purpose of the Scheme was to unload the baggage relating to legacy disputes and to allow the business to make a fresh beginning and since the Scheme itself was a beneficial scheme, a literal formalistic interpretation of the statute at hand is to be avoided. While placing reliance upon the decision of the Hon ble Supreme Court in the case of Government of Kerala v. Mother Superior Adoration Convent, reported in 2021 SCC OnLine SC 151, it has been submitted that even if there was any ambiguity arising in construction of the scheme, such ambiguity must be in favour of the subject. Further, while placing reliance upon the decision of Hon ble Delhi High Court and Bombay High Court, it was submitted that the scheme in question has been interpreted by respective High Courts in their decisions and it has been held that a liberal interpretation is to be given to the scheme. The Judgments relied upon by petitioner on the said issue are as under:- (i) Vaishali Sharma v. Union of India, reported in 2020 SCC OnLine Del 1386 (Relevant Paragraph-11); (ii) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said dealer would be Rs. 40.00 Lakh in terms of Section 123(1)(e) of the Scheme and, consequently, the said dealer would be entitled for relief of an appropriate percentage as provided under Section 124(1)(c) only on the amount of Rs. 40.00 Lakh and not on Rs. 1.00 Crore. Further, while placing reliance upon definition of the term amount in arrears , as defined under Section 121(c) of the Scheme, it has been contended that the amount in arrears means the amount of duty which is recoverable as arrears of duty and, thus, if a dealer has already paid certain amount either as pre-deposit and/or during investigation etc., the said amount is no longer recoverable as arrears of duty . Thus, it has been contended that Designated Committee has rightly followed the Circular dated 25.09.2019 and has determined the amount payable by extending relief to the petitioners at the required percentage of the outstanding amount which was recoverable from them towards duty at the time of acceptance of their declarations. 18. Mr. Amit Kumar, Counsel appearing for the Revenue, in support of his contentions, has placed reliance upon the Judgment of Allahabad High Court in the case of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated is more than rupees fifty lakhs, then, forty per cent. Of the tax dues; 124 (2) The relief calculated under sub-section (1) shall be subject to the condition that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant. Provided that if the amount of pre-deposit or deposit already paid by the declarant exceeds the amount payable by the declarant, as indicated in the statement issued by the designated committee, the declarant shall not be entitled to any refund 20. It is an admitted fact that declarations of the petitioners have been accepted by the Designated Committee and Form SVLDRS-3 has been issued to them and the only dispute pertains to the amount payable by the declarants. Petitioner-Aloke Dutta contends that the Designated Authority has determined a sum of Rs. 1,34,32,364.40/- as payable by the petitioner, whereas, as per the Scheme, it is only liable to pay an amount of Rs. 36,22,401/-. Similarly, in the case of M/s. Vassu Enterprises, the amount payable has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of (a) Fraud; or (b) Collusion; or (c) willful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made there-under with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words one year , the words five years had been substituted. Explanation .-Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the show cause notices issued to petitioners, the amount reflected as payable was the amount of service tax not paid by them. If petitioners would have filed appeal against the Orders-in-original disputing the amount payable as determined in the said Orders-in-original being the amount of service tax not paid by petitioners, the petitioners would have been extended relief u/s 124(1)(a) being equivalent to the amount of duty disputed by petitioners in the said appeal, i.e. the amount of service tax determined. Merely because petitioners, instead of filing appeal, have claimed benefit under the Scheme, the amount of service tax payable and/or recoverable from the petitioners cannot be reduced with the amount of deposit/pre-deposit by treating the said amount as the amount only outstanding against the petitioners. 27. The Scheme is, admittedly, a beneficial legislation, and, both, the Hon ble High Court of Delhi and Hon ble High Court of Bombay, in their Judgments rendered in the cases of Code Engineers Pvt. Ltd. (supra) and Morde Foods Pvt. Ltd. Anr. (supra), have unequivocally held that literal interpretation is to be given to the Scheme . That apart, Hon ble Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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