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2023 (1) TMI 452 - HC - Central ExciseDenial of the benefit of the Sabka Vishwas Legacy Dispute Resolution Scheme 2019 (SVLDR Scheme) - rejection of applications on the ground ineligibility observing that in terms of Section 125(1)(h) of the Finance Act 2019 the product falling under the Fourth Schedule to the CE Act is not eligible for this Scheme - invocation of Section 125(1)(h) of the Finance Act (No.2) Act of 2019 - HELD THAT - The above interpretation placed by the Department on Section 125(1)(h) of the Finance Act 2019 appears not to be correct. No doubt that the Petitioner s product (Process Oil) falls under the Fourth Schedule to the CE Act but as far as the rate of duty is concerned - there is no question of the Petitioner s product being outside the purview of the SVLDR Scheme read with the Fourth Schedule to the CE Act. The Court therefore rejects the plea of the Department that the Petitioner would be ineligible for the benefit of the SVLDR Scheme. The Court quashes the order dated 16 th December 2019 and other similar orders issued by the Department (all of which have been assailed by the Petitioner in the writ petitions) rejecting the SVLDR applications of the Petitioner since they are based on an erroneous interpretation of not only the SVLDR Scheme but also Section 125(1)(h) of the Finance Act. A direction is issued to the Department to process the Petitioner s applications for amnesty under the SVLDR Scheme and after hearing the Petitioner on a date to be informed to the Petitioner at least one week in advance and to pass a reasoned order on the Petitioner s applications under the said SVLDR Scheme within a period of four weeks thereafter - the writ petitions are disposed off.
Issues:
Denial of benefit under the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 based on Section 125(1)(h) of the Finance Act, 2019. Analysis: The petitioner, a company manufacturing various goods, sought benefits under the SVLDR Scheme. The company's products were subject to the GST regime post the introduction of the Goods and Services Tax. The Central Excise Act, Customs Act, and other tax legislations underwent changes, impacting the levy of excise duty and cesses. The Fourth Schedule of the CE Act listed goods subject to excise duty, but some entries, like the petitioner's Process Oil, had unspecified duty rates. The Scheme excluded goods subject to excise duty, as clarified by a Circular emphasizing dispute resolution and amnesty. The SVLDR Scheme aimed to resolve legacy tax issues and provide relief to taxpayers, emphasizing cooperation between authorities and taxpayers. The Department rejected the petitioner's SVLDR applications, citing ineligibility due to the product falling under the Fourth Schedule. However, the Court disagreed, noting that the product's entry with an unspecified duty rate meant excise duty was not leviable. The Court rejected the Department's interpretation of Section 125(1)(h) and quashed the rejection orders. It directed the Department to process the petitioner's SVLDR applications, ensuring a fair hearing and a reasoned order within a specified timeframe. The Court emphasized that the petitioner was eligible for the SVLDR Scheme benefits, as the Process Oil was not subject to excise duty, contrary to the Department's assertion. In conclusion, the Court's judgment favored the petitioner, allowing them to avail of the SVLDR Scheme benefits. The Court clarified the eligibility criteria under Section 125(1)(h) of the Finance Act, emphasizing that goods not subject to excise duty were eligible for the Scheme. The Department was directed to reevaluate the petitioner's applications in line with the Court's interpretation and provide a decision within a specified timeframe, ensuring justice and adherence to the Scheme's objectives.
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