2004 (10) TMI 383 - AT - Central Excise

Summary

Issues:
1. Settlement of dues under Kar Vivad Samadhan Scheme, 1998 and its applicability to Revenue's appeal.

Analysis:
The judgment revolves around the settlement of dues under the Kar Vivad Samadhan Scheme, 1998, and its impact on the Revenue's appeal. The respondent contended that the assessee had settled dues under the scheme, which also covered the Revenue's appeal. Reference was made to a Circular dated 8-12-98, which highlighted the constitutional validity of the scheme and the provisions related to Departmental appeals. The High Court upheld the scheme's provisions, except those concerning Departmental appeals. It was emphasized that the scheme's benefits should not be denied to an assessee even if the revenue continued with litigation. The Court struck down the proviso related to Departmental appeals, allowing settlement of disputed amounts. The Government accepted the High Court's order, enabling assessees to avail the scheme even for cases involving Departmental appeals.

The judgment emphasizes that an assessee, despite succeeding in litigation, can still be treated as in arrears if the revenue pursues litigation post 31-3-1998. The definition of 'Tax Arrears' was interpreted broadly to include amounts disputed in Departmental appeals for settlement purposes. The judgment clarifies that even if an assessee had obtained a favorable judgment, disputed amounts in Departmental appeals could be settled under the scheme. Assessees were granted the opportunity to file declarations under the scheme for pending Departmental appeals up to 31-12-1998, with the provision to settle the disputed amount by paying 50% of the duty amount in dispute.

Furthermore, the judgment outlines procedures for filing declarations for appeals and departmental appeals under the scheme. Immunity from penal action was granted to co-noticees along with the principal noticee settling under the scheme, subject to certain conditions. The waiver of immunity from penalty applied to cases where a show cause notice was issued before 31-3-1998 and was pending adjudication at the time of filing the declaration under the Kar Vivad Samadhan Scheme, 1998. Ultimately, the Court agreed with the Respondent's plea, leading to the abatement and dismissal of the Revenue's appeal.