2021 (7) TMI 465 - HC - Service Tax

Sabka Viswas (Legacy Dispute Resolution) Scheme - quantification of the amount to be paid - defence taken is that investigation in the matter is still on-going and that the duty component has not been quantified - Circular No.1071/4/2019-CX dated 27.08.2019 - HELD THAT - The doubt that arises from the quantification in the statement is as to whether the amount is a sum of ₹ 98.00 lakhs or ₹ 75.00 lakhs. This would hinge upon the status of the petitioner as SSI unit or otherwise. Subject to a decision on this aspect, a quantification of duty in both instances has been made at the time of recording of statement seen in the light of Section 121(r) of the Scheme read with clause 10(g) of the Circular dated 27.08.2017. The matter remanded to the file of R1, who shall complete the exercise by determining this aspect of the matter alone. Had the respondent afforded proper opportunity as required in terms of Section 127 of the Scheme, heard the petitioner and passed a speaking order, this litigation might well have been avoided altogether - petition allowed by way of remand.

Issues:
1. Challenge to rejection of application under the Sabka Viswas (Legacy Dispute Resolution) Scheme without reasons provided.
2. Interpretation of the term "quantified" under the Scheme.
3. Clarification of the term "quantified" through a circular issued by the Board.
4. Determination of duty amount payable based on a statement recorded during investigation.
5. Remanding the matter to determine the petitioner's status as an SSI unit.
6. Procedure to be followed for determining and paying the duty amount.

Analysis:
1. The petitioner challenged the rejection of their application under the Sabka Viswas (Legacy Dispute Resolution) Scheme by the Designated Committee without providing any reasons for the rejection. The order simply stated that the application had been rejected without elaborating on the unsuitability of the petitioner's application for the Scheme.

2. The defense argued that the duty component had not been quantified as the investigation was ongoing. Reference was made to the definition of "quantified" under Section 121(r) of the Scheme, emphasizing that a written communication intimating the duty demand was necessary for proper quantification.

3. The term "quantified" was further clarified through a circular issued by the Board, which stated that cases where the duty demand had been quantified before a specified date were eligible under the Scheme. The circular elaborated on what constituted a quantified duty demand, including written communications, duty liabilities admitted during investigation, or audit reports.

4. A statement recorded during the investigation indicated the duty amount payable by the petitioner. The statement revealed discrepancies in the declared amount, raising questions about whether the duty liability was Rs. 98.00 lakhs or Rs. 75.00 lakhs, depending on the petitioner's status as an SSI unit.

5. The court decided to remand the matter to determine the petitioner's status as an SSI unit, as this determination was crucial for quantifying the duty amount payable under the Scheme.

6. The court directed the Designated Committee to follow the prescribed procedure for determining and paying the duty amount, including issuing statements, providing opportunities for the declarant to be heard, and electronic payment requirements. The court specified a timeline for completing the process and obtaining a discharge certificate upon payment.

This detailed analysis covers the key issues raised in the judgment, providing a comprehensive overview of the court's decision and the legal interpretations involved.

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