2023 (12) TMI 1107 - HC - Central Excise

Adjustment of excess amount deposited by the petitioner towards the amount demanded - SVLDR provide for adjustment or not - Circular No. 1074/07/2019-CX dated 12.12.2019 - HELD THAT - The finding of the writ court is that SVLDR was introduced to provide amnesty and resolution of disputes by making mutual adjustment with regard to the disputed pre-deposit made by the petitioner. It is further held that merely because the assessee has to file a separate declaration for each period, in the absence of a specific bar or prohibition for consolidating or clubbing two cases and making mutual adjustment, it cannot be said that mutual adjustment in respect of the very same assessee in relation to same subject matter or commodity for the two different periods is impermissible. The petitioner has not claimed refund. Merely for the reason that SVLDR does not provide for adjustment, in view of circular issued by the department, adjustment is permitted. It is to be noted that declarant is always one person and the declarations are for different periods. So any money deposited by a declarant in respect of demand for one period can be adjusted in respect of demand for another period. There are no infirmity in the impugned order. Hence writ appeal is dismissed.

Summary

Issues Involved:
The issues involved in the judgment are the challenge to an order regarding the classification of jaggery powder, imposition of duty, penalty, and seizure by the Central Excise Department, the applicability of "The Sabka Vishwas (Legacy Dispute Resolution) Scheme" for relief and adjustment of excess payment, and the interpretation of SVLDR rules regarding adjustment of excess deposits for different periods.

Classification of Jaggery Powder and Duty Imposition:
The petitioner, a partnership firm manufacturing jaggery powder and khandasari sugar, faced a demand for customs duty based on the Central Excise Department's classification of jaggery powder as cane sugar. The firm contested this classification, but the demand was confirmed by the third respondent, along with penalties imposed on the firm and a partner. The petitioner appealed this order before the tribunal.

Application of "The Sabka Vishwas (Legacy Dispute Resolution) Scheme":
The Ministry of Finance introduced the SVLDR scheme, offering relief and waiver of tax for pending appeals. The petitioner opted for SVLDR, claiming an excess payment of Rs. 1.45 Crore for the period 2011-2015, seeking its adjustment against a second demand for the period 16.09.2015 to 30.06.2017. The petitioner's request for adjustment was rejected, leading to a writ petition and subsequent appeal.

Interpretation of SVLDR Rules and Adjustment of Excess Deposits:
The main argument in the case revolved around whether SVLDR allowed for the adjustment of excess deposits made by the petitioner for one period against the demand for another period. The appellants contended that SVLDR did not permit such adjustments, emphasizing strict construction of fiscal laws. In contrast, the respondent argued that excess pre-deposits for one period could be adjusted against demands for another period, citing circulars and previous court judgments supporting this interpretation.

Judgment and Decision:
After considering the arguments, the court found that SVLDR rules did not provide for refunds but allowed for mutual adjustments of excess deposits for different periods. The court upheld the writ court's decision that mutual adjustment was permissible, as there was no specific bar on consolidating cases and making adjustments. The circular issued by the department clarified that such adjustments were permitted. Consequently, the writ appeal was dismissed, affirming the adjustment of excess deposits made by the petitioner against the demands for different periods.