2006 (9) TMI 190 - HC - Central Excise

Summary

Issues:
1. Interpretation of the Kar Vivad Samadhan Scheme, 1998.
2. Validity of the order of the designated authority under the scheme.
3. Applicability of the scheme to pending appeals.
4. Consideration of disputed tax under the scheme.

Issue 1: Interpretation of the Kar Vivad Samadhan Scheme, 1998
The judgment involved a dispute regarding the interpretation of the Kar Vivad Samadhan Scheme, 1998, introduced by the Central Government. The scheme aimed to allow taxpayers to settle disputes by paying 50% of the disputed amount of duty, fines, penalties, or interest. The scheme defined terms like "Disputed Tax" and "tax arrear" to determine the eligibility and calculation of the settlement amount. The court analyzed the provisions of the scheme to ascertain the actual amount payable by the appellant under the scheme.

Issue 2: Validity of the order of the designated authority under the scheme
The appellant challenged the order of the designated authority, which held that the appellant was required to pay a specific amount under the scheme. The court scrutinized the authority's decision and found it erroneous in segregating the duty assessed by the Commissioner for determining the tax arrear under the scheme. The court emphasized that the authority should consider the total disputed amount pending before the appellate forum, rather than selectively interpreting the duty amount.

Issue 3: Applicability of the scheme to pending appeals
The court deliberated on whether the scheme applied to pending appeals, specifically focusing on the appellant's case where an appeal was pending before CEGAT when the scheme was introduced. The court concluded that the unpaid amount as on the date of making the declaration should be considered as tax arrear under the scheme, irrespective of the pending appeal. The court emphasized that the scheme aimed to resolve disputes by collecting 50% of the unpaid tax, regardless of the appeal status.

Issue 4: Consideration of disputed tax under the scheme
The court examined the appellant's failure to deposit the full amount directed by the tribunal for the appeal. Despite not depositing the entire sum, the court held that the appellant was entitled to settle the disputes under the scheme by paying 50% of the total unpaid duty. The court rejected the argument that the appellant's conduct in not depositing the full amount should bar them from benefiting under the scheme, emphasizing the legislative intent to resolve disputes by collecting a portion of the unpaid tax.

In conclusion, the court allowed the appeal, set aside the order of the designated authority, and directed the refund of the deposited amount to the appellant. The court clarified the appellant's liability under the scheme and treated the amount already paid as final settlement. The judgment highlighted the legislative objective of the scheme to facilitate the resolution of tax disputes by collecting a portion of the unpaid tax amount.