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TMI Blog2023 (6) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... gration for the same and other aspects of incidental design, consultancy and support services. GENESIS-FIRST ROUND OF DISPUTE 2. Briefly stated, the petitioner was assessed to service tax inter-alia in relation to commission income received from outside India and vide order dated 14.06.2019 passed by respondent no. 3/ Commissioner (Appeal), Central Tax GST, Delhi-1. The petitioner was imposed a total demand of Rs. 1,00,89,786/- along with interest and penalty of Rs. 1,00,89,786/-. Needless to state the petitioner had a statutory right to file appeal within a period of two months from the date of receipt of the order (received on 19.06.2019) under Section 85(3A) of the Finance Act, 1994 ("the Act") which was to expire on 18.08.2019. However, in the meanwhile on 05.07.2019 the Hon'ble Finance Minister announced the Sabka Vishwas (Legacy Dispute Resolution) [SVLDR Scheme] Scheme Rules, 2019 during the Budget Speech of 2019- 2020 and later on the Finance Bill 2019-2020 received assent of the President on 01.08.2019, and the SVLDR Scheme was eventually made operational vide Notification No. 4/2019 CE-NT on 21.08.2019 effective w.e.f. 01.09.2019. 3. Initially, the grievance of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after affording opportunity of hearing, passed the impugned directions or order declaring Form SVLDRS-3 dated 18.05.2020 which is assailed for being not only in violation of Section 127(4) read with Rule 6(2) of the SVLDR Scheme Rules as well as clarifications issued in terms of Question No. 6 of Frequently Asked Questions [FAQ], but also on the grounds of the same being arbitrary, unreasonable and ultra vires to Article 14 of the Constitution of India for incorrectly classifying the 'tax dues' as "amount in arrear" as opposed to "litigation" category. In other words, the grievance of the petitioner is that though the respondents subsequently extended the validity of the Scheme, in terms of Notification No. 07/2019 CE-NT dated 31.12.2019, from 31.12.2019 to 15.01.2020, and it had claimed declaration in Form SVLDRS-1 dated 30.12.2019, under "litigation" category, seeking rebate up to 50% of the "tax dues". The respondents have wrongly by misconstruing the provisions of the Scheme have allowed lesser rebate-slab by treating the case of the petitioner under the "litigation" category and the tax dues have been quantified at Rs. 41,30,697/-. The impugned order dated 18.05.2019 has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Form SVLDRS-3 dated 18.05.2020 is claimed to have been lawfully passed and it is deposed that the Department has already issued SVLDRS-4 (Discharge Certificate) dated 03.07.2020 to the petitioner. It is deposed that as per paragraph 2 (vi) of the Circular No. 29.10.2019, the petitioner was made eligible to file a declaration subject to withdrawing the appeal and that once the appeal had been withdrawn, payment of dues raised by its authority attained "finality" as there was no pending litigation; and that it was categorically stipulated that the declaration would have to be filed under the "arrear" category as explained vide FAQ No. 6, and therefore, the Department on behalf of respondents no. 2 and 3 pray for dismissal of the present petition. 8. Suffice to state that a short rejoinder was filed on behalf of the petitioner and denying the correctness of the assertions made in the short affidavit filed on behalf of the respondents, the petitioner has reiterated and re-affirmed its assertions in the writ petition. ANALYSIS & DECISION: 9. We have given our thoughtful consideration to the contentions urged by both the counsels and have also carefully perused the documents enclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een issued a show cause notice under indirect tax enactment for an erroneous refund or refund; (e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019; (f) a person making a voluntary disclosure, - (i) after being subjected to any enquiry or investigation or audit; or (ii) having filed a return under the indirect tax enactment, wherein has indicated an amount of duty as payable, but has not paid it; (g) who have filed an application in the Settlement Commission for settlement of a case; (h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944". 11. A careful perusal of the aforesaid provision would show that the Scheme made all persons eligible to file declaration where there was pending no litigation in respect of any duty/tax dues before the 'cut off date' i.e., 01.07.2019. Section 123 of the Scheme provides for the meaning of the term "tax dues" and the relevant extract of which is reproduced hereunder: "123. For the purposes of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategory the amount of duty is disputed or is capable of being disputed and yet to be finalized, while in the latter category, amount of duty is not in dispute or has become final. On a conjoint reading of the aforesaid provisions, it is manifest that the SVLDR Scheme was extended to cover those category of cases where there was existing some degree of finality with regard to imposition of duty/tax dues as on the "cut off date". This is fortified on plain reading and purport of the Circular dated 29.10.2019, the relevant extract of which is as under:- "(vi) Representations have also been received that the cases where appeals were filed after 30.06.2019 should also be allowed relief under the Scheme. It is stated that such cases are not covered per se. However, if a taxpayer withdraws the appeal and furnishes the undertaking to the department in terms of Para 2(viii) of Circular No. 1072/05/2019-CX dated 25.09.2019, they can file a declaration under the Scheme". 15. The respondents further clarified the issue by simultaneously issuing FAQ, in terms of vide Question No. 6, which reads as under: "Q6. What is the scope under the Scheme when adjudication order determining the duty/t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he FAQ, the petitioner chose to withdraw the appeal and furnished an undertaking to the Department not to file any appeal. The act of the petitioner in voluntarily withdrawing the appeal consequent to the notification dated 29.10.2019 resulted in the order dated 14.06.2019 attaining finality, and therefore, becoming 'amount in arrears' within the meaning and purport of Rule 121(c). 18. To sum up, a comprehensive and harmonious interpretation of Section 123 (a) (1) read with Section 124(1) (a) of the Scheme leaves no scope for doubt that on withdrawal of the appeal filed post 01.07.2019 and on filing of declaration, its case was to be considered under the "arrears" category so much so that the petitioner even accepted the calculation computed by the Department and paid the payable amount as mentioned in the SVLDRS-3 without any demur or protest on the basis of which Discharge Certificate was issued on 03.07.2020. At the cost of repetition, once the pending litigation had been withdrawn, the demand of duty raised by the tax authorities attained "finality" and a fortiori fell under the definition of "amount in arrears" and the declaration was rightly considered under the "arrears" ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice has been issued on or after 30th June, 2019 is not covered under any of the categories of the Scheme, it would still become eligible under "arrears" category if other conditions of mat category are fulfilled, like adjudication of notice is done and limitation period for filing an appeal has expired and no appeal has been filed or the order in appeal has attained finality or the declarant has given the requisite undertaking. {paragraph 20} 20. Before finally drawing the curtains down on this petition, it would be pertinent to mention that this Court in the case of Nidhi Gupta v. Union of India 2019 SCC OnLine Del 12396, had an occasion to examine the SVLDR Scheme, 2019 and in reference to Section 121(C) (i) & (ii) that defines the term "amount in arrears" as also the "amount of duty" which is recoverable, it was observed that the position has been explained vide Circular No. 1072/05/2019.CX dated 25.09.2019 vide clause (viii) that categorically enabled the tax payers to file declaration under the Scheme on giving an undertaking in writing to the Department that he would not file appeal, and suffice to state that the said Circular was held to be in consonance with Rule 3 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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