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TMI Blog2020 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... been filed by the declarant against an order or against an order in appeal before expiry of the period for filing appeal. In the present case, pursuant to the show cause notice though the final hearing had taken place on 9th May, 2019 before the cut off date of 30th June, 2019, the order in original was subsequently passed on 9th August, 2019. Against this order in original no appeal was filed by petitioner No.1 who filed the declaration under the arrears category on 8th January, 2020 by which time the limitation period for filing appeal against the order in original had expired. The Board clarified in circular dated 12th December, 2019 that since the main objective behind the scheme is to liquidate the legacy cases under central excise and service tax, it would be desirable that the tax payer is given an opportunity to avail its benefit - As per the answer given above by the department itself, in a case where show cause notice was issued and final hearing had taken place on or before 30th June, 2019, the declarant would not be eligible to make a declaration under the litigation category but once the order is passed the declarant can file a declaration under the arrears categ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Assistant Commissioner of CGST and Central Excise, Division1, Palghar. It may be mentioned that personal hearing was granted to the petitioner on 9th May, 2019. After the personal hearing petitioner filed written submission on 16th May, 2019. By the order in original, the adjudicating authority confirmed the demand of service tax amounting to ₹ 19,21,465.00 besides ordering payment of interest and imposition of penalty. 6. In the meanwhile, Central Government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly the scheme hereinafter) as part of the Finance (No.2) Act, 2019 to bring an end to pending litigations under the earlier indirect tax regime which now stood subsumed under the Goods and Services Tax (GST). The scheme was made effective from 1st September, 2019. 7. To avail the benefits under the scheme petitioner filed application (declaration) under section 125 in form SVLDRS-1 on 8th January, 2020 under the arrears category with further sub-category of appeal not filed or appeal having attained finality. However, petitioner received an e-mail dated 14th February, 2020 from respondent No.2 rejecting the declaration filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore declaration of petitioner No.1 was rightly rejected. No case for interference is made out. 12. Submissions made by learned counsel for the parties have received the due consideration of the court. Also perused the materials on record. 13. Though facts are not in dispute and lies within a narrow compass, yet for a proper perspective it would be apposite to briefly restate the facts. 14. In this case, show cause cum demand notice was issued to petitioner No.1 on 5th April, 2019 alleging nonpayment of service tax dues. Thereafter, personal hearing was granted to the petitioners on 9th May, 2019. Petitioners filed their written submissions on 16th May, 2019. Adjudicating authority ultimately passed the order in original on 9th August, 2019 confirming the service tax demand amounting to ₹ 19,21,465.00 for the period from 2013-14 to 2017-18 (upto June, 2017), besides ordering payment of interest and penalty. 15. This being the admitted position on facts, let us now turn to the scheme. Chapter-V of the Act comprising sections 120 to 135 contains the scheme. Section 121 is the definitions section. As per section 121(c)(i), amount in arrears would mean the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e picture that emerges is that if the amount estimated by the Designated Committee is equal to the amount declared by the declarant, then the Designated Committee shall issue a statement in electronic form indicating the amount payable by the declarant. However, if the amount estimated by the Designated Committee is higher than the amount declared by the declarant, the Designated Committee shall give an opportunity of hearing to the declarant before finally determining the amount payable by the declarant. 23. Central Government has framed the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (briefly the Rules hereinafter) which has since been amended. As per Rule-3, the declaration made under sub-section (1) of section 125 would be in form SVLDRS-1. Rule-6(3) says that the form issued by the Designated Committee under sub-section (2) of section 127 shall be in form SVLDRS-2 mentioning the estimated amount payable by the declarant alongwith a notice of opportunity for personal hearing. As per sub-rule (4), if the declarant waives personal hearing and indicates agreement or disagreement with the estimate made by the Designated Committee, he may file form SVLDRS-2A. U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal period is over, and other requirements under the Scheme are fulfilled. 29. Referring to section 125(1)(c) it was clarified by the Board that such cases may still fall under the arrears category once the appellate or adjudication order, as the case may be, is passed and has attained finality or appeal period is over and other requirements under the scheme are fulfilled. 30. This position is reiterated by the Board in the subsequent circular dated 12th December, 2019 where in paragraph No.2(viii) it has been held as under:- There may be cases where the show cause notice were issued on or after 01.07.2019 and such cases are also not covered under any of the categories such as an enquiry or investigation or audit and tax dues having not been quantified on or before 30.06.2019. However, such cases become eligible under arrears category depending upon the fulfillment of other conditions such as appeal period being over or appeal having attained finality or the person giving an undertaking that he will not file any further appeal in the matter (Member s D.O. letter F.No.267/78/19/CX-8 dated 30th October, 2019). Since the main objective behind the Scheme is to liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereunder:- 51. We have already discussed that under sub sections (2) and (3) of section 127 in a case where the amount estimated by the Designated Committee exceeds the amount declared by the declarant, then an intimation has to be given to the declarant in the specified form about the estimate determined by the Designated Committee which is required to be paid by the declarant. However, before insisting on payment of the excess amount or the higher amount the Designated Committee is required to give an opportunity of hearing to the declarant. In a situation when the amount estimated by the Designated Committee is in excess of the amount declared by the declarant an opportunity of hearing is required to be given by the Designated Committee to the declarant, then it would be in complete defiance of logic and contrary to the very object of the scheme to outrightly reject an application (declaration) on the ground of being ineligible without giving a chance to the declarant to explain as to why his application (declaration) should be accepted and relief under the scheme should be extended to him. Summary rejection of an application without affording any opportunity of hearing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, MANU/DE/1529/2020 that a liberal interpretation has to be given to the scheme as its intent is to unload the baggage relating to legacy disputes under central excise and service tax and to allow the business to make a fresh beginning. 53. * * * * * * * * * * 54. As discussed above, though the scheme has the twin objectives 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, the primary focus as succinctly put across by the Hon ble Finance Minister in her budget speech is to unload the baggage of pending litigations in respect of service tax and central excise from pre-GST regime so that the business can move on. This was also the view expressed by the Board in the circular dated 27th August, 2019 wherein all the officers and staff working under the Board were called upon to partner with trade and industry to make the scheme a grand success which in turn will enable the administrative machinery to fully focus in the smooth implementation of GST. This is the broad picture which the officials must have in mind while considering an application (declaration) seeking amnesty u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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