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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 ..... an unregistered partnership firm comprising of petitioner Nos.2 to 4 as the partners. Petitioner No.1 carries on the business of Haj and Umrah tours/journeys to Saudi Arabia and has been facilitating Haj pilgrimage to Saudi Arabia since many years. 4. Show cause cum demand notice dated 5th April, 2019 was issued to petitioner No.1 by the Deputy Commissioner of Central Goods and Service Tax (CGST) and Central Excise, Palghar alleging amongst others that petitioner No.1 had failed to pay service tax amount of Rs. 19,21,465.00 for the period from 2013-14 to 2017-18 (upto June, 2017). 5. The above show cause cum demand notice culminated in an order in original dated 9th August, 2019 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 Rs. 19,21,465.00 besides ordering payment of interest and imposition of penalty. 6. In the meanwhile, Central Government introduced the Sabka Vishwas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to circular dated 12th December, 2019 of the Central Board of Indirect Taxes and Customs (Board) as well as question No.8 of frequently asked questions (FAQs) prepared by the department for clarifying various aspects of the scheme. His further submission is that impugned rejection is in violation of the principles of natural justice as no notice or hearing was given to the petitioners before rejection and therefore, is required to be set aside and quashed. 11. Per contra, Mr.Mishra, learned counsel for the respondents has referred to section 125(1)(c) of Chapter-V of the Act to contend that petitioner No.1 was not eligible to file declaration under the scheme and 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 servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant within the period specified. As per sub-section (2) where the amount estimated by the Designated Committee to be payable by the declarant exceeds the amount declared by the declarant, the Designated Committee shall issue in electronic form an estimate of the amount payable by the declarant within the period specified. Sub-section (3) provides that after issue of the estimate under sub-section (2), the Designated Committee shall give an opportunity of being heard to the declarant before issuing the statement indicating the amount payable by the declarant. 22. From a conjoint reading of sub-sections (1), (2) and (3) of section 127, the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th May, 2019 of the Board more particularly to paragraph 2(vii) which clarifies a situation akin to the one faced by petitioner No.1. Paragraph No.2 (vii) reads as under:- "Section 125(1)(a) excludes cases which are under appeal and where final hearing has taken place on or before 30th June, 2019 from the purview of the Scheme. Similar exclusion has been made applicable, mutatis mutandis, under section 125(1)(c) to cases under adjudication. It is clarified that such cases, however, 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." 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under the litigation category but once the order is passed the declarant can file a declaration under the arrears category provided no appeal against the order is filed or the appeal period is over. 35. In our view the above clarification of the department itself clinches the issue. 36. However, there is one more aspect to the matter which we would like to highlight. The rejection order is devoid of any reason and was not preceded by any notice or hearing. In this connection we may advert to what we have held in Thought Blurb Vs. Union of India, decided on 27th October, 2020, which we extract 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd what is clearly deducible from the statement of object and reasons, the scheme is a one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. Therefore the focus is to unload this baggage of pre-GST regime and allow business to move ahead. We are thus in complete agreement with the views expressed by the Delhi High Court in Vaishali Sharma Vs. Union 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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