Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Central Excise Central Excise + HC Central Excise - 2021 (10) TMI HC This

  • Login
  • Cases Cited
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2021 (10) TMI 1030 - HC - Central Excise


Issues Involved:
1. Eligibility under the Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS Scheme)
2. Classification of lubricants under the Central Excise Act, 1944
3. Interpretation of Section 125 of the SVLDRS Scheme
4. Marketability and excisability of goods
5. Legal precedents and their applicability

Issue-wise Detailed Analysis:

1. Eligibility under the Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS Scheme):
The petitioner, a Public Sector Undertaking, challenged the rejection of their application for dispute settlement under the SVLDRS Scheme by the Commissioner of Central Excise and GST. The petitioner argued that their dispute, originating from a show cause notice regarding lubricants, should be considered under the Scheme. The Scheme excludes certain disputes, including those involving excisable goods listed in the Fourth Schedule to the Central Excise Act, 1944.

2. Classification of lubricants under the Central Excise Act, 1944:
The petitioner had erroneously filed returns under Serial No.336 instead of 338 of Notification No.12/2012 – Central Excise dated 17.03.2012. The Department contended that lubricants, used as coolants/lubricating agents, did not qualify for exemption. The petitioner argued that lubricants were subject to GST and not central excise duty, thereby falling outside the Scheme's exclusions.

3. Interpretation of Section 125 of the SVLDRS Scheme:
Section 125(1)(h) excludes declarations related to excisable goods listed in the Fourth Schedule. The petitioner sought clarification, which was provided by the Officer on Special Duty (OSD), stating only specific petroleum products and tobacco remained under central excise. The petitioner argued that lubricants, with a '.......' rate of duty, should not be considered excisable goods under the Scheme.

4. Marketability and excisability of goods:
The Supreme Court in Moti Laminates Pvt. Ltd. v. Collector of Central Ex., Ahmedabad emphasized that goods must be marketable to be considered excisable. The petitioner argued that lubricants, with no specified duty rate, could not be deemed excisable. The Court agreed, stating that the absence of a duty rate rendered the excisability of lubricants illusory.

5. Legal precedents and their applicability:
The revenue relied on judgments such as Wallace Flour Mills Company Ltd. v. Collector of Central Excise and Tamil Nadu Handloom Weavers Co-operative Society Ltd. v. Assistant Collector of Central Excise, arguing for a literal interpretation of the Scheme. However, the Court distinguished these cases, noting that the interpretation must align with the Scheme's objective to reduce litigation. The Court also referenced Circular No.1071/4/2019 – CX 8, supporting the petitioner's view that only goods with a specified duty rate are excluded under the Scheme.

Conclusion:
The Court concluded that lubricants, with a '.......' duty rate, are not excisable goods for the purposes of the SVLDRS Scheme. The interpretation of Section 125 must consider the Scheme's objective, and any ambiguity should favor the assessee. The Writ Petition was allowed, and the rejection of the petitioner's application under the SVLDRS Scheme was set aside.

 

 

 

 

Quick Updates:Latest Updates