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2022 (2) TMI 1322 - HC - Service Tax


Issues Involved:
1. Eligibility for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Correct categorization of the declaration under the Scheme.
3. Rejection of the form of declaration by the respondents.

Issue-wise Detailed Analysis:

1. Eligibility for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The writ applicants, a partnership firm and its partners, were served with a show-cause notice alleging evasion of Central Excise duty. The Commissioner confirmed the demand of Central Excise Duty amounting to Rs. 1,33,82,430/- along with interest and penalties. The applicants appealed to the Tribunal (CESTAT), which remanded the matter to the Commissioner for a fresh decision. The applicants then sought relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, which provides for the resolution of disputes related to indirect taxes. Section 125 of the Finance (No.2) Act, 2019, outlines the eligibility criteria for the scheme, excluding cases where the appeal was finally heard on or before 30th June 2019.

2. Correct Categorization of the Declaration under the Scheme:
The applicants submitted their declaration under the category of "Litigation" and sub-category of "show-cause-notice involving duty pending." However, the declaration was rejected on the grounds that the correct category should be "pending appeal" since the case was remanded by the Tribunal and was pending as on 30.06.2019. The respondents argued that the final hearing had taken place on 05.04.2019, thus barring the applicants from eligibility under Section 125(1)(a).

3. Rejection of the Form of Declaration by the Respondents:
The applicants' first declaration was rejected because the respondents believed the case fell under "pending appeal" rather than "show-cause-notice pending." The applicants then submitted a second declaration under the category of "arrears," which was also rejected on the grounds that the remanded case assumed the nature of a "show-cause-notice pending adjudication" as of 02.08.2019. The respondents maintained that the case did not fall under the "arrears" category as defined under the Finance (No.2) Act, 2019.

Judgment:
The Court held that the respondents should have considered that an order of remand revives the entire matter from its inception, meaning the case was pending before the Commissioner and not finally heard by 30.06.2019. The stance of the respondents was not in line with the objectives of the scheme. Consequently, the Court quashed the orders dated 28.11.2019 and 19.12.2019, remitting the matter to the respondents. The respondents were directed to accept the form of declaration under the category of "litigation" sub-category "SCN involving duty pending" and proceed with the verification process through the designated committee. The writ application was allowed and disposed of accordingly.

 

 

 

 

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