2025 (1) TMI 425 - HC - Central Excise

Clandestine removal - whether CESTAT was justified in upholding the order of the Commissioner (Appeals) in which the appellant's challenge to the original order was dismissed based on the appellant's voluntary participation in the Kar Vivad Samadhan Scheme? - HELD THAT - From the material available on record, it is evident that during pendency of the appeal against the order passed in original proceeding, the appellant with its eyes wide open had applied under the Scheme. Thereafter, the appellant paid the amount due under the Scheme and produced the certificate of payment. The Commissioner (Appeals) therefore was justified in dismissing the appeal preferred by the appellant on the ground that appellant is not entitled to challenge the order dated 28.10.1997. Despite several opportunities the appellant did not even appear before the Tribunal. The Appellate Tribunal by assigning valid and cogent reasons had affirmed the order passed by the Commissioner (Appeals). The orders impugned in this appeal do not suffer from any infirmity. Conclusion - The order passed by the Commissioner (Appeals) does not suffer from any infirmity, as the appellant itself had opted for settlement under the Scheme and the amount was paid accordingly. Appeal dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal issue in this judgment is whether the Customs, Excise & Service Tax Appellate Tribunal was justified in upholding the order of the Commissioner (Appeals) dated 27.01.2005, in which the appellant's challenge to the original order was dismissed based on the appellant's voluntary participation in the Kar Vivad Samadhan Scheme.

2. ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents:

The case revolves around the application of the Central Excise Act, 1944, particularly Section 35G, which allows for appeals against decisions of the Tribunal. Additionally, the Kar Vivad Samadhan Scheme, a tax settlement scheme, plays a crucial role in the resolution of this dispute.

Court's Interpretation and Reasoning:

The court noted that the appellant, during the pendency of its appeal, voluntarily applied for settlement under the Kar Vivad Samadhan Scheme. The appellant paid the required amount and obtained a certificate of full and final settlement. The court reasoned that by opting for the Scheme, the appellant effectively accepted the original order, thereby forfeiting the right to challenge it further.

Key Evidence and Findings:

The evidence highlighted includes the appellant's application under the Scheme, the payment made, and the certificate issued for full settlement. The Tribunal noted that despite multiple notices, the appellant failed to appear before it, reinforcing the conclusion that the appellant had accepted the terms of the Scheme.

Application of Law to Facts:

The court applied the provisions of the Central Excise Act and the Kar Vivad Samadhan Scheme to the facts, concluding that the appellant's voluntary participation in the Scheme and subsequent settlement precluded any further legal challenge to the original order.

Treatment of Competing Arguments:

The respondent argued that the appellant's voluntary settlement under the Scheme validated the original order, and no further challenge was permissible. The court agreed, finding no reason to interfere with the decisions of the Commissioner (Appeals) and the Tribunal.

Conclusions:

The court concluded that the Tribunal's decision to uphold the Commissioner (Appeals)'s order was justified. The appellant, having opted for the Scheme and settled the dues, could not seek reimbursement or challenge the original order.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning:

"The Tribunal inter alia held that the order passed by the Commissioner (Appeals) does not suffer from any infirmity, as the appellant itself had opted for settlement under the Scheme and the amount was paid accordingly."

Core Principles Established:

The judgment establishes that voluntary participation in a tax settlement scheme, such as the Kar Vivad Samadhan Scheme, and the acceptance of its benefits, precludes further legal challenges to the original tax assessment or order.

Final Determinations on Each Issue:

The court affirmed the Tribunal's decision, finding no infirmity in the order of the Commissioner (Appeals). The appeal was dismissed, and the substantial question of law was answered in the affirmative, confirming the validity of the Tribunal's decision to uphold the original order.