2022-TIOL-1537-HC-MAD-ST
Win Power Engineering Pvt Ltd Vs Designated Committee Sabka Vishwas Legacy Disputes Resolution Scheme
ST - SVLDRS, 2019 - Petitions have been filed against rejection of SVLDRS applications; calling for quashing the SCN dated 25.09.2020 issued by DGCEI and for quashing notification 22/2014-Service Tax.
Held:
W.P.No. 3320 of 2022 and W.P.No.3322 of 2022
+ Rejection of applications filed by the respective petitioners and communication of the same after the scheme has expired did not bar the respective petitioners from challenging the impugned orders rejecting their application under the SVLDRS,2019. [para 22]
+ If the benefit of SVLDRS, 2019 was otherwise available and wrongly denied, then, it cannot be denied to the respective petitioners notwithstanding the fact the period for which the scheme was to be in operation had expired. Further, the purpose behind the Scheme is to bring an end to the legacy cases. [para 23]
+ Had the petitioner immediately challenged the impugned orders rejecting their declaration as soon as it was communicated to them before the so called expiry period under SVLDRS,2019, could it be said that the petitioners were barred from proceeding further and the Court was barred from passing a final order? In our view, the writ petitions could not have been dismissed. [para 24]
+ That apart under the scheme, within 60 days of filing of a Declaration, the Designated Committee under SVLDRS, 2019 was expected to process the application. Within 30 days of issue of Form SVLDRS-3, an applicant was expected to pay the amount. [para 32]
+ The late date for filing a Declaration was extended from 31.12.2019 to 15.01.2020. Due to outbreak of COVID 19 pandemic, the last date for making payment was extended to 30.06.2020. Thus, various factors contributed to the longevity of the scheme being extended. [para 33]
+ Apart from outbreak of Covid-19, litigations have ensured that the scheme did not close for those who have opted to settle their tax due under SVLDRS, 2019 by filing Declarations on or before the deadline of 31.12.2019 which was extended to 15.01.2020. [para 34]
+ We are, therefore, of the view, if the Declarations were filed for settling the tax case under SVLDRS, 2019 in time, but were rejected at the threshold, an applicant whose application was rejected cannot be left without any remedy as the right to have the case settled under the SVLDRS, 2019 is a substantive right. [para 35]
+ We however, make it clear that the right to redress a grievance against rejection of Declaration under SVLDRS, 2019 is subject to a caveat that the applicant whose Declaration was rejected under SVLDRS, 2019, was indeed entitled to file a Declaration under SVLDRS,2019. [para 36]
+ In other words, if an applicant was barred from filing a Declaration under SVLDRS, 2019, such applicant cannot be given any relief. However, to come to a conclusion, the Court has to examine the issue on merits. [para 37]
+ In our view, the respective Writ petitions cannot be rejected in limine . The cases of the petitioners, therefore, deserve a consideration on merits. We are, therefore, of the view that the two writ petitions challenging the rejection of the Declaration are maintainable. However, whether the respective petitioners are entitled for relief is altogether another matter. [para 38]
+ In our view, merely because, by the time, the respective writ petitions were filed, the scheme has come to an end, ipso facto would not present itself as a fait accompli. [para 39]
+ A reference to the Latin Maxim ubi jus ibiremedium is apt under the circumstances. Where there is a right, there is a remedy. Therefore, the discretionary remedy under Art. 226 of the Constitution under the circumstances, at best cannot be denied without going into merits only on account of latches. [para 40]
+ Though, there is a delay of eight to nine months in filing these writ petitions by the respective petitioners and in approaching this Court after the impugned orders were passed rejecting their Declarations filed under SVLDRS, 2019, we are of the view, if on facts, the petitioners have a legitimate case for settling the dispute under the SVLDRS, 2019, the substantive benefit to have the case settled under the SVLDRS, 2019 cannot be denied to them. [para 41]
+ The delay in approaching this Court is not so enormous, so as to, disqualify the respective petitioner, from redressing their grievance before us under Art.226 of the Constitution of India. [para 42]
+ In our view, the Officers of Principal Additional Director General of GST Intelligence /second respondent are Officers of Central Excise Board within the meaning of Section 2(b) of the Central Excise Act and, therefore, the challenge to the powers exercised by the Central Government while issuing the impugned Notification No.22/2014-ST dated 16.09.2014 is without any merits. Therefore, W.P.No.3322 of 2022 is liable to be dismissed. [para 55]
+ Consequently, the impugned Show Cause Notice No.47 of 2020 dated 25.09.2020 under Section 73 of the Finance Act, 1994 impugned in W.P.No.3320 of 2022 cannot be said to be without jurisdiction. [para 56]
+ Therefore, the challenge to the impugned Show Cause Notice issued by the second respondent, Principal Additional Director General, Directorate General of Goods and Service Tax Intelligence, Chennai in W.P.No.3320 of 2022 is liable to be dismissed. [para 57]
+ Therefore, the petitioner will be required to answer to Show Cause Notice No.47 of 2020 dated 25.09.2020 under Section 73 of the Finance Act, 1994, if W.P.No. 12957 of 2020 challenging the order rejecting the SVLDRS application dated 31.12.2019 is dismissed. [para 58]
+ We therefore, answer the issue against the petitioner in W.P.No. 3320 of 2022 and W.P.No.3322 of 2022. As mentioned elsewhere, if the petitioner in W.P.No.12957 of 2020, succeeds, the proceeding in Show Cause Notice No.47 of 2020 dated 25.09.2020 issued under Section 73 of the Finance Act, 1994 by the second respondent, the Principal Additional Director General, Directorate General of Goods and Service Tax Intelligence, Chennai will have to be dropped. [para 59]
+ Similarly, if the petitioner in W.P No. 11785 of 2020 succeeds, the proceedings in SCN.No.06/2020(ADC) vide dated 26.02.2020 initiated by the Additional Commissioner, Office of the Commissioner of GST and Central Excise, Audit II Commissionerate will also have be dropped. [para 60]
W.P.Nos.3320 & 3322 of 2022 stand dismissed.
W.P.Nos.11785 & 12957 of 2020
+ The reason for rejecting the application filed by the respective petitioners in W.P.Nos.11785 & 12957 of 2020 is “ No quantification done prior to 30.06.2019.” [para 73]
+ Thus, the point for consideration in these Writ Petitions is whether quantification arrived at by the respective petitioners in their written communication on 24.10.2018 during audit (in W.P.Nos.11785 of 2020) and on 07.05.2019 during investigation (in W.P.No.12957 of 2020) qualifies as quantification before 30.6.2019 under SVLDRS, 2019 and makes them eligible to avail tax relief under the aforesaid scheme. Consequently, whether in the facts and circumstances of the case, the rejection of Declaration filed by the respective petitioners under SVLDRS, 2019 on the respective dates by the Designated Committee is to be interfered by this Court. [para 85]
+ The respective petitioners submit that the respective petitioners were being audited and investigated and the respective petitioners by their communication dated 24.10.2018 (in the case of W.P.No.11785 of 2020) and by communication dated 07.05.2019 (in the case of W.P.No.12957 of 2020) had quantified the tax dues payable by them before the cut-off date of 30.6.2019. Therefore, it was submitted that the applications filed by the respective petitioners were in consonance with the SVLDRS, 2019 (i.e. Chapter V of the Finance Act, 2019) read with SVLDRS Rules, 2019. [para 87]
+ It is the specific case of the respective petitioners that the tax dues declared by them in their communications dated 24.10.2018 and 07.05.2019 satisfied the definition of "tax dues" within the meaning of Section 123(c) of the SVLDRS, 2019 as "tax dues" were quantified before 30th June 2019 within the meaning of Section 124(1)(d) of SVLDRS, 2019. [para 88]
+ It is further case of the respective petitioners that the applications under SVLDRS, 2019 have been wrongly rejected by the Designated Committee without even looking at the quantification by them on 24.10.2018 and 07.05.2019. [para 89]
+ It is submitted that the Central Board of Indirect Taxes and Customs, by Circular No.1071/4/2019-CX.8, dated 27.08.2019 in F.No.267/78/2019-CX-8-Pt.III, has clarified that even a written communication by an assessee would amount to quantification for the purpose of Section 2(r) of SVLDRS, 2019, which describes the meaning of the expression 'quantified'. [para 91]
+ There should have been a quantification of the tax dues/duty liability on or before 30.06.2019 as per Section 123(c) where the tax dues are linked to an enquiry, investigation or audit against the declarant so as not to attract the exception under Section 125(1)(e). [para 134]
+ Thus, "Voluntary Disclosure" is not permissible in view of exclusion in Section 125(f) after a person has been subjected to an "Enquiry", "Investigation", or "Audit" or where having filed returns under the indirect tax enactment, amount payable in it has not been paid. If returns were filed after 30.06.2019 also benefit is not available. Thus, the respective petitioners are prima facie not entitled to any relief if there was quantification after 30.06.2019. [para 146]
+ Only if the "tax dues" are linked to an "Enquiry" or "Investigation" or "Audit" where it was quantified on or before the 30th day of June 2019, a Declaration could have been filed. [para 147]
+ The details furnished by the petitioner in its communication dated 24.10.2018 and the information in the Show Cause Notice dated 26.02.2022 indicate that the petitioner did not make a complete disclosure. There was no proper quantification of the tax due by the petitioner for the entire period between March 2016 to June 2017. [para 160]
+ If the amount quantified by the petitioner on 24.10.2018 and later declared in the declaration filed under SVLDRS, 2019, and the amount arrived in the Show Cause Notice dated 26.02.2022 were same, it can be said that there was "quantification" for the purpose of SVLDRS, 2019 before 30.06.2019 in terms of Section 121(r) r/w Section 123(c) and Section 124(1)(d) to bring the case within the purview of the exemption to the exclusion in Section 125(1)(e). [para 161]
+ In our view, there was neither a proper quantification by the petitioner nor any quantification during audit by the Department. Therefore, the petitioner in W.P.No.11785 of 2020 is not entitled to the benefit of SVLDRS, 2019 for the period between March 2016 to March 2017. [para 163]
+ As per Rule 3 of the SVLDRS Rules, 2019, a person is entitled to make multiple declarations in respect of the case as defined in explanation to the aforesaid Rule. A reading of the above facts indicate that there is only a proper quantification for a sum of Rs.1,98,86,089/- for the period between April 2017 to June 2017. Thus, at best the petitioner is entitled to settle for the period from April 2017 to June 2017 alone. The show cause proceedings initiated subsequently on 26.02.2020 cannot be scuttled by the petitioner for demands made earlier starting from March 2016 to June 2017. To that extent, the petitioner is not entitled to settle the case. [para 166]
+ The petitioner has made a partial quantification of the tax liability. Only a sum of Rs.75,51,102/- on account of TDR and services rendered to AWHO as detailed above in the Table was not quantified either in the ST-3 Returns and/or in the letter dated 7.5.2019 before the implementation of SVLDRS,2019. [para 184]
+ However, it would not disentitle the petitioner from the purview of SVLDRS, 2019 for the amount remaining unpaid as per the admission in the ST-3 Returns prior to the implementation of SVLDRS, 2019. [para 185]
+ …In the result, the petitioner was entitled to settle the case under SVLDRS, 2019 on the amounts which were not declared in the returns filed on 10.05.2017, 19.11.2018 and 11.01.2019 but quantified in the letter dated 7.5.2019. [para 187]
+ The respondents are directed to issue Form SVLDRS (3 or 4) the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 subject to the balance amount paid by the petitioner. [para 190]
Conclusion:
W.P.No.11785 of 2020:
i. W.P.No.11785 of 2020 is allowed by directing the respondents to accept the declaration filed under SVLDRS, 2019 for the tax dues and tax determined by the petitioner as payable for the period between April 2017 to June 2017 amounting to Rs.1,98,86,089/- in its letter dated 28.10.2018 alone and settle the case.
ii. For the balance amount covered by the Show Cause Notice dated 26.02.2022, the Additional Commissioner of GST and Central Excise may issue a corrigendum to the said Show Cause Notice.
iii. For the rest of amount, the respondents are directed to proceed with the aforesaid Show Cause Notice dated 26.02.2022 issued by the Additional Commissioner of GST and Central Excise as proposed or as per corrigendum to the aforesaid show cause notice.
W.P.No.12957 of 2020:
i.W.P.No.12957 of 2020 is allowed by directing the respondents to accept the declaration filed under SVLDRS, 2019 for the tax dues, determined and quantified by the petitioner as payable for the period between 2014-15 to 2017-18 (upto June 2017) by accepting the Declaration in Form SVLDRS-I filed by the petitioner on 31.12.2019 and settle the case by issuing appropriate discharge certificate in accordance with the provisions of SVLDRS, 2019 to the extent there was a quantification on 7.5.2019 for the amount of tax due that had remained unpaid.
ii. For the balance amount covered by the Show Cause Notice No.47 of 2020 dated 25.09.2020, the Principal Additional Director General, Directorate General of Goods and Service Tax Intelligence may issue a corrigendum to the said Show Cause Notice.
iii. For the rest of amount, the respondents are directed to proceed with the aforesaid Show Cause Notice No.47 of 2020 dated 25.09.2020 issued by the second respondent as proposed or as per corrigendum.
W.P.Nos.11785 & 12957 of 2020
disposed of
- Petitions dismissed/disposed of: MADRAS HIGH COURT
2022-TIOL-1143-CESTAT-AHM
Shubhlakshmi Polysters Ltd Vs CCE
CX - Assessee filed appeal against impugned order under which Commissioner has disallowed cenvat credit availed on various input services - Adjudication authority in respect of disputed input services denied the credit without discussing nature and use of services in assessee's factory - In order to find out eligibility of a particular service as 'input service' under such definition, nature and purpose of use of service in ultimate provision of output service and use in factory is required to be examined inasmuch as parameters of eligibility of such credit differs from case to case basis and standard practice cannot be adopted uniformly in judging such eligibility to Cenvat benefit - Nature and use of disputed services as explained by assessee was not properly addressed by adjudicating authority in impugned order passed by him - Hence, matter remanded to original authority for a proper fact finding on issue of eligibility of Cenvat credit on disputed services: CESTAT
- Matter remanded: AHMEDABAD CESTAT
2022-TIOL-1142-CESTAT-AHM
Mangalam Drugs And Organics Ltd Vs CCE & ST
CX - The limited issue to be decided is that whether, as per claim of appellant that they have not taken credit in respect of inputs and reversed the credit in respect of input service attributed to exempted goods, appellant is liable to pay 5%/10% in terms of Rule 6(3) of CCR, 2004 - Appellant have been maintaining separate record for cenvatable and non-cenvatable inputs in RG-23 Part-I and Form-IV register respectively - From the chart submitted by appellant, it is clear that they have not taken or reversed Cenvat credit in respect of input and input service - Adjudicating Authority has confirmed the demand of Rs. 1,98,42,913/- in terms of Rule 6(3) of CCR, 2004 - In case of demand under Rule 6(3) for amount 5%/ 10%, is made, appellant became entitle to take credit in respect of all inputs and input service irrespective of use of same either in dutiable or exempted goods - Therefore, if appellant have already reversed/ not taken credit of Rs. 2,27,92,622/- then demand of Rs. 1,98,42,913/- which is lesser than the foregone credit of appellant, will not sustain - Even though Adjudicating Authority has some doubt about manner of maintenance of separate accounts but the fact remains that appellant have not taken/reversed Cenvat credit in respect of input and input service of Rs. 2,27,92,622/- - On this basis itself, without going into correctness of separate accounts, demand is not sustainable - Consequently, interest and penalty is also not maintainable - Personal penalty of Rs. 10,00,000/- imposed on Shri Rajesh Kumar Sinha, Manager (Administration) & Authorised signatory of M/s. Manglam Drugs & Organics Limited being consequential to demand which is sustainable, is also not maintainable - Accordingly, impugned order is set-aside: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
2022-TIOL-1141-CESTAT-HYD
J Suresh Vs CC
Cus - The appellant is in appeal against confiscation of one piece of gold bar under Section 111(a), (b), (d) and (l) of Customs Act, 1962 without option of redemption, confiscation of cash under Section 121 of Customs Act and imposition of consolidated penalty under Section 112(a) and 112(b)(i) of the Act - Admittedly, it is a case of town and there is no foreign marking on seized gold - Said person Mr. T. Nandu who sold the gold to appellant has procured the gold from Chennai - open market and thus was not involved in any alleged smuggling of gold - No presumption is available to Revenue to form a reasonable belief of gold in question being of smuggled nature - Thus, burden of proof under Section 123 of the Act is not shifted on appellant - Revenue has not been able to establish smuggled nature of gold in question - Impugned order is set aside so far this appellant is concerned - Accordingly, appellant shall be entitled to release of seized gold and currency/cash: CESTAT
- Appeal allowed: HYDERABAD CESTAT
2022-TIOL-1140-CESTAT-DEL
Travel Security Services India Pvt Ltd Vs CCGST & CE
ST - Issue involved is, whether the rejection of refund claim filed by assessee, an exporter of services, under Rule 5 of Cenvat Credit Rules, 2004 r/w Notification No. 27/2017-S.T. is just and proper for alleged non-compliance of Condition 2(h) of Notification - Debit of amount of refund claim in cenvat credit account during GST regime, i.e., on or after 01.07.2017 is sufficient compliance of Condition 2(h) of notification - In view of observations of Assessing Officer that appellant have claimed refund less than the credit lying as on 30.06.2012, ipso facto established that they have not claimed more amount, and such amount has already been debited in cenvat credit account in ledger - There cannot be any more debit in cenvat credit register on or after 01.07.2017 due to implementation of GST regime - There is sufficient compliance of condition 2(h) of Notification No. 27/2012-C.E.(N.T.) - Impugned order is set aside and Adjudicating Authority is directed to grant the refund alongwith interest to assessee within a period of 60 days: CESTAT
- Appeal allowed: DELHI CESTAT |
