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TMI Blog2020 (11) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of the projects of the petitioner are concentrated in and around Bhiwandi area which is within Thane district in the State of Maharashtra. 3.1. In connection with service tax dues, petitioner was served with a show cause-cum-demand notice dated 08.04.2014 issued by the Commissioner of Service Tax, Mumbai-II raising certain demands for the period from 2008-09 to 2012-13. As per the show cause-cum-demand notice, an amount of Rs. 3,60,03,185.00 was stated to be due and recoverable from the petitioner. 3.2. It is stated that during investigation by the service tax authorities and prior to the issuance of show cause-cum-demand notice, petitioner had paid service tax dues to the tune of Rs. 2,80,74,255.00 by various challans, the details of which have been furnished in paragraph 3 of the writ petition. 3.3. It is further stated that prior to issuance of the show cause-cum-demand notice, service tax authorities had ordered freezing of petitioner's debtor's account of M/s. Future Retail Limited which was occupying and using warehouse space of the petitioner on lease. The debtor was instructed by the service tax authorities to remit the rental dues to be paid to the petitioner to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it was a case of pendency of appeal as on 30.06.2019. Accordingly, petitioner submitted application (declaration) under the said scheme on 23.12.2019 under 'pending litigation category'. However, the Designated Committee issued notice in form SVLDRS-2 to the petitioner on 23.01.2020 treating the petitioner as a declarant under 'arrears category' and not under 'pending litigation category'. Vide the said notice, the Designated Committee proposed the amount in arrears at Rs. 79,85,457.00 and on that basis relief to the petitioner was determined at Rs. 31,94,182.80. Thus, an amount of Rs. 47,91,274.20 (Rs. 79,85,457.00 - Rs. 31,94,182.80) was quantified by the Designated Committee as the dues payable by the petitioner. While determining the amount in arrears, Designated Committee accepted Rs. 2,80,17,728.00 as the pre-deposit made by the petitioner and not Rs. 2,98,68,657.00. 3.9. Since the petitioner was not in agreement with the aforesaid classification of the petitioner as a declarant under 'arrears category' and the resultant dues determined, it filed objection before the Designated Committee in the prescribed form i.e., SVLDRS-2A on 28.01.2020. In this connection, a personal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that the appeal of the petitioner was not entertained by CESTAT; in other words, it was not admitted. Since the appeal was not admitted, claim of the petitioner that appeal filed by it was pending as on 30.06.2019 would not be correct. 5.1. SVLDRS-1 application format i.e., the declaration has a column for appeal number in case application is filed under 'pending litigation category'. Petitioner did not provide appeal number but provided diary number in that column. CESTAT had passed an order on 09.12.2019 not entertaining the appeal. Petitioner had filed application (declaration) under the scheme on 23.12.2019. When the petitioner had filed the application (declaration), it was fully aware of the order passed by the CESTAT on 09.12.2019 but still it filed the application under the 'pending litigation category'. The correct category of the petitioner would be 'arrears category' and this was informed by the Designated Committee to the authorized representative of the petitioner in the course of personal hearing on 31.01.2020. Respondents have referred to section 124(1) of the Act and submitted that under the scheme where the amount involved was more than Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 30.06.2019 and if the amount of duty is Rs. 50 lakhs or less, then 70% of the tax dues and if the amount of duty is more than Rs. 50 lakhs, then 50% of the tax dues. 9.2. As per clause (c), where the tax dues are relatable to an amount in arrears and if the amount of duty is Rs. 50 lakhs or less, then 60% of the tax dues and if the amount of duty is more than Rs. 50 lakhs, then 40% of the tax dues. 9.3. Sub-section (2) of section 124 clarifies that the relief calculated under sub-section (1) shall be subject to adjustment of any pre-deposit made. 10. 'Tax dues' has been explained in section 123. As per clause (a)(i) where a single appeal arising out of an order is pending as on 30.06.2019 before the appellate forum, tax dues would mean the total amount of duty which is being disputed in the said appeal. As per clause (e), where an amount in arrears relating to the declarant is due, tax dues would mean the amount in arrears. 11. The expression 'amount in arrears' is defined under section 121(c) in the following terms:- "(c) 'amount in arrears' means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner should be construed to be one under the 'pending litigation category' or under the 'arrears category'? 14. From the relevant provisions of the scheme as alluded to hereinabove we find that under section 125(1)(a) a person, who had filed an appeal before the appellate forum and such appeal had been heard finally on or before 30.06.2019, would not be eligible to make a declaration under the scheme. Section 124(1)(a) provides that the relief available to a declarant under the scheme in a case where the tax dues are relatable to the show cause notice or one or more appeals arising out of such notice which is pending as on 30.06.2019 and if the amount of duty is Rs. 50 lakhs or less, then 70% of the tax dues and if the amount of duty is more than Rs. 50 lakhs, then 50% of the tax dues. Provisions of sub-section (1) of section 124 have been made subject to the conditions specified in sub-section (2) which says that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment shall be deducted when issuing the statement indicating the amount payable by the declarant. 15. There is no dispute to the fact that against the order-in- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the statute to the disadvantage of the applicant (declarant). All that is provided for and is required, is that an appeal must be filed and that appeal should be pending as on 30.06.2019. It is immaterial whether the appeal has been provided a regular number or given a diary number. 18. In such circumstances, we have no hesitation to hold that the appeal filed by the petitioner before the CESTAT against the order-in-original dated 18.09.2018 was pending as on 30.06.2019 and therefore, the application (declaration) of the petitioner should be treated as one under the 'pending litigation category' and not one under the 'arrears category'. This is because in addition to the above discussion, to be eligible under the 'arrears category' in terms of section 121(c), no appeal should be filed by the declarant against the order-in-original before expiry of the limitation period for filing appeal or the order-in-appeal has attained finality or the declarant has admitted the tax liability but has not paid the same which is not the position in the present case as petitioner had filed appeal against the order-in-original before expiry of the limitation period. 19. The scheme was elabora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... informed about notification of Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019. It was stated thus :- "2. As may be appreciated, this scheme is a bold endeavour to unload the baggage relating to the legacy taxes viz. central excise and service tax that have been subsumed under GST and allow business to make a new beginning, and focus on GST. Therefore, it is incumbent upon all officers and staff of CBIC to partner with the trade and industry to make this scheme a grand success. 3. Dispute resolution and amnesty are the two components of this scheme. The dispute resolution component is aimed at liquidating the legacy cases locked up in litigation at various forums whereas the amnesty component gives an opportunity to those who have failed to correctly discharge their tax liability to pay the tax dues. As may be seen, this scheme offers substantial relief to the taxpayers and others who may potentially avail it. Moreover, the scheme also focuses on the small taxpayers as would be evident from the fact that the extent of relief provided is higher in respect of cases involving lesser duty (smaller taxpayers can generally be expected to face disputes involving relativel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. Both are equally important: amicable resolution of tax disputes and interest of revenue. As an incentive, those making the declaration and paying the declared tax verified and determined in terms of the scheme would be entitled to certain benefits in the form of waiver of interest, fine, penalty and immunity from prosecution. This is the broad picture the concerned authorities are to keep in mind while dealing with a claim under the scheme." 29. Thus after observing that the scheme has the twin objectives of liquidation of past disputes pertaining to the subsumed taxes on the one hand and disclosure of unpaid taxes on the other hand, it was observed that the concerned authorities should keep in mind the broad picture while dealing with a claim under the scheme." 20. After dilating on various provisions of the scheme which were relevant for adjudication in Thought Blurb (supra), this Court further held as under:- "52. We have one more reason to take such a view. As has rightly been declared by the Hon'ble Finance Minister and what is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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