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2021 (3) TMI 379 - HC - Central ExciseSVLDRS - re-determination of the 'amount payable' under the scheme - Claim of refund of amount deposited as per the Court order - levy of personal penalty on Director - the declaration was rejected on the ground that Applicant has not discharged the amount estimated in SVLDRS-3 in the case of M/s Eureka Fabricators, which is the main notice in this case - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT - Section 123(a) of the said Act states that for the purposes of the scheme, tax dues means the total amount of duty which is being disputed in a single appeal arising out of an order and pending as on 30.06.2019 or in the case of more than one appeal arising out of an order which are pending as on 30.06.2019 before the appellate forum - The impugned order dated 11.09.2020 passed by the respondent No.3 i.e. the Designated Committee proceeds on the premise that under the provisions of section 123(a) of the said Act, since the petitioner has categorically admitted its tax liability of ₹ 88,16,598.00 in the memorandum of appeal, the tax liability of the petitioner under the scheme is to be computed on the balance amount and the relief of 50% of tax dues under the scheme is required to be given to the petitioner only on the said balance amount which is ₹ 78,10,369.00. Respondent No.3 has arrived at the total tax payable at ₹ 1,27,21,782.50 and has therefore called upon the petitioner to pay the net amount payable of ₹ 16,47,860.50 after giving the petitioner the benefit of the deposit of ₹ 1,10,73,922.00. The principal reason for denial of the benefit to the petitioner is due to the alleged admission by the petitioner of its admitted duty liability in the memorandum of appeal filed before the Commissioner (Appeals) which has been relied upon by the Designated Committee. We have perused the memorandum of appeal filed by the petitioner before the Commissioner (Appeals). The finding in the impugned order dated 11.09.2020 that the petitioner has admitted its tax liability of ₹ 88,16,598.00 before the Commissioner (Appeals) and the Settlement Commission against the total confirmed tax of ₹ 1,66,26,967.00 which therefore needs to be excluded from computation is therefore not sustainable - That apart, under section 124(1)(a)(ii) of the said Act, the relief available to the petitioner under the scheme would be 50% of the entire duty liability of ₹ 1,66,26,967.00 i.e. ₹ 83,13,484.00. Reliance placed on para 2 (iv) of the Circular No.1072/05/2019-CX dated 25.09.2019 to the effect that under Section 123 tax dues is the amount of duty which is the outstanding amount against the declarant and this is the net amount after deducting the dues that he has already paid in the form of pre-deposit, is not sustainable and deserves to be rejected. The petitioner therefore has deposited the total sum of ₹ 1,29,12,090.00 with the respondents, though petitioner's deposit of ₹ 55,56,045.00 on orders of the Court cannot be construed as a pre-deposit or a deposit under the scheme; therefore the proviso to sub-section (2) of section 124 would not be applicable or attracted to the said deposit. It is also settled preposition that an order of the Court can cause prejudice to none. It is evident that the amount payable by the petitioner under the scheme would be 50% of the tax dues less the deposits and pre-deposits which is 50% of ₹ 1,66,26,967.00, ₹ 83,13,484.00 less the pre-deposits and deposits i.e., ₹ 73,17,877.00 (Rs,50,00,000.00 plus ₹ 5,17,877.00 plus ₹ 18,00,000.00). The figure comes to ₹ 9,95,607.00. Since petitioner has paid ₹ 55,56,045.00 as per Court's order, petitioner would be entitled to a refund of ₹ 55,56,045.00 less ₹ 9,95,607.00 which is ₹ 45,60,438.00 - Petition allowed.
Issues Involved:
1. Quashing of the order dated 11.09.2020 by the Designated Committee. 2. Determination and settlement of tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). 3. Refund of the amount deposited by the petitioner. 4. Rejection of the SVLDRS-1 application of the Director on grounds of ineligibility. Issue-Wise Detailed Analysis: 1. Quashing of the Order Dated 11.09.2020 by the Designated Committee: The petitioner challenged the order dated 11.09.2020 passed by the Designated Committee, which determined the amount payable under the SVLDRS scheme at ?46,47,860.50. The petitioner argued that the Designated Committee failed to consider the deposits made towards central excise duty and interest, which should have reduced the final amount payable. The Court found that the Designated Committee's reliance on the petitioner’s alleged admission of tax liability was not sustainable. The Court concluded that the entire duty liability of ?1,66,26,967.00 should be considered as "tax dues" under section 123(a) of the Finance Act, 2019, and the petitioner is entitled to relief of 50% of this amount under section 124(1)(a)(ii), which amounts to ?83,13,484.00. 2. Determination and Settlement of Tax Dues Under SVLDRS: The petitioner filed a declaration under the SVLDRS scheme, declaring tax dues of ?1,66,26,967.00 and claimed that the amount payable should be ?9,95,606.00 after considering the pre-deposits and deposits. The Designated Committee initially estimated the amount payable at ?33,13,483.00 and later at ?55,56,045.00. The Court found that the Designated Committee incorrectly excluded the admitted liability from the scheme's benefits. The Court held that the petitioner is entitled to a 50% relief on the entire duty liability of ?1,66,26,967.00, which amounts to ?83,13,484.00. After deducting the pre-deposits and deposits totaling ?73,17,877.00, the final amount payable by the petitioner under the scheme is ?9,95,607.00. 3. Refund of the Amount Deposited by the Petitioner: The Court noted that the petitioner had deposited ?55,56,045.00 as per the Court's previous order. Since the final amount payable under the scheme was determined to be ?9,95,607.00, the petitioner is entitled to a refund of ?45,60,438.00 (?55,56,045.00 less ?9,95,607.00). The Court directed the respondents to refund this amount to the petitioner within four weeks after the issuance of the SVLDRS-4 form. 4. Rejection of the SVLDRS-1 Application of the Director on Grounds of Ineligibility: The Director's application under SVLDRS-1 was rejected by the Designated Committee on the grounds that the main noticee (the petitioner company) had not discharged the estimated amount in SVLDRS-3. The Court found that since the petitioner's case was allowed, the rejection of the Director's application was also unsustainable. The Court directed the Designated Committee to issue the discharge certificate in Form SVLDRS-4 to the Director as well. Conclusion: The Court allowed both writ petitions, setting aside the order dated 11.09.2020 by the Designated Committee. The Court directed the Designated Committee to issue the discharge certificate in Form SVLDRS-4, determining the amount payable under the scheme at ?9,95,606.00. The respondents were also directed to refund ?45,60,438.00 to the petitioner within four weeks after the issuance of the SVLDRS-4 form. The companion writ petition regarding the Director's personal penalty was also allowed, and the Designated Committee was directed to settle the declaration and issue the discharge certificate accordingly.
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