2008 (11) TMI 255 - HC - Central Excise

Differential duty - penalty imposed - the petitioner wanted to take advantage of the Kar Vivad Samadhan Scheme 1998 (for short KVSS) introduced by the Finance Act 21 of 1998 with effect from 1-8-1998 - Held that - The case of the petitioner merits acceptance. Therefore, they have not considered the claim of the petitioner to consider his case under KVSS and also the Form 1B declaration filed by him. In the light of Section 95(ii)(b), the writ petition stands allowed. The respondents are directed to consider the declaration made by the petitioner under the Kar Vivad Samadhan Scheme, 1998 introduced by the Finance Act 21 of 1998 in accordance with law. Such exercise will be undertaken by the respondents within a period of eight weeks from the date of receipt of a copy of this order.

Summary

Issues: Petitioner's eligibility under the Kar Vivad Samadhan Scheme 1998 - Interpretation of Section 95(ii)(b) and Section 95(ii)(c) of the Finance Act.

Analysis:

The petitioner, a manufacturer of hot re-rolled products falling under chapter Heading 72 of the Central Excise Tariff Act, received a Show Cause Notice demanding a differential duty and penalty. The petitioner sought to benefit from the Kar Vivad Samadhan Scheme 1998 (KVSS) introduced by the Finance Act 21 of 1998. Section 95(ii) of the scheme outlines conditions where the scheme does not apply, including cases where no show cause notice has been issued (Section 95(ii)(b)). The petitioner filed a declaration under Form 1B to avail the KVSS, but the Commissioner rejected it, stating that there was no dispute before any Court/Appellate Forum or Authority as required under Section 95(ii)(c) of the Finance Act.

Challenging the Commissioner's order, the petitioner filed a writ petition, contending that the notice demanding duty and penalty fell under Section 95(ii)(b) and should be considered under the KVSS. The Central Government Standing Counsel argued that finality had been reached on the proceedings against the petitioner, citing a Supreme Court judgment emphasizing the absence of pending appeals or applications for revision for the scheme to apply.

The Court noted that the Supreme Court judgment relied upon by the respondents considered a different clause (Section 95(ii)(c) instead of Section 95(ii)(b) pressed by the petitioner. The Court held that the petitioner's case should be considered under Section 95(ii)(b) and directed the respondents to evaluate the declaration made by the petitioner under the KVSS within eight weeks. The writ petition was allowed without costs.