2023 (7) TMI 915 - HC - Central Excise

SVLDRS - Waiver of Interest u/s 11AB of the Central Excise Act, 1944 - excise duty on the surcharge component was discharged belatedly as it ought to have been remitted on monthly basis - HELD THAT - It is undisputed that the petitioner has paid the entire excise duty under the Scheme for the Financial Years 2005-06 and 2006-07. The Central Government introduced Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 . The Scheme provides for waiver of interest subject to satisfying certain terms and conditions. In the light of the order passed by the Hon ble High Court of Madhya Pradesh, the Central Government has issued a Circular dated 6-10-2022 clarifying that in cases where the assessee has filed ST-3 return on or before 30-6-2019 and has paid the tax dues in full before filing the application, the declarant is eligible to avail the benefit of the scheme for waiver of interest. In the present case, the petitioner has paid the entire excise duty before 30-6-2019 and in the light of the said Scheme, the petitioner is entitled for waiver of interest. The impugned order passed by respondent No. 1 is not sustainable - Petition allowed.

Summary

Issues:
1. Petitioner's liability for interest under Section 11AB of the Central Excise Act, 1944 for belated excise duty payment.
2. Rejection of petitioner's application for waiver of interest under the "Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019."

Analysis:
1. The Assistant Commissioner of Customs and Central Excise held the petitioner liable for interest of Rs. 39,67,431 under Section 11AB of the Act for belated excise duty payment for the Financial Years 2005-06 and 2006-07. The petitioner's appeal against this decision was dismissed by the Customs, Excise & Service Tax Appellate Tribunal. Subsequently, the Central Government introduced the "Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019." The petitioner applied for waiver of interest under this scheme, which was rejected. The High Court noted that the petitioner had paid the entire excise duty before the deadline specified in the scheme, making them eligible for interest waiver.

2. The petitioner contended that they had paid in excess of the demand under the scheme and thus were entitled to interest waiver. The petitioner relied on a Circular issued by the Ministry of Finance, Government of India, and a judgment of the High Court of Madhya Pradesh to support their argument. On the other hand, the respondents argued that since the petitioner had paid the entire excise duty, they were not entitled to interest waiver. However, the High Court found that the Circular clarified that if the tax dues were paid in full before the application, the declarant was eligible for interest waiver. As the petitioner had met this condition, the rejection of their application for interest waiver was deemed unsustainable.

Judgment:
The High Court allowed the writ petition, quashing the impugned order rejecting the petitioner's application for waiver of interest. The respondents were directed to accept the petitioner's Declaration and issue a Discharge Certificate waiving the interest levied under Section 11AB of the Act.