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TMI Blog2021 (3) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme, the quantification need not be on completion of investigation by issuing show-cause notice or the amount that may be determined upon adjudication. Further, under the scheme what is relevant is quantification of duty demand or duty liability in the manner indicated above on or before 30.06.2019 and not communication before that date. The scheme does not speak of communication; it is quantification which is relevant. Thus, what is of essence under the scheme is an admission of tax dues or duty liability by the declarant before the cut-off date which need not be of the exact figure upon determination by the authorities post 30.06.2019 - In the instant case, petitioner No.2 in his statement before the Senior Intelligence Officer on 12.06.2019 had admitted gross service tax liability of ₹ 1,73,12,978.00. While admitting the said figure, petitioner No.2 did not include service tax on Ocean Freight on which petitioners claimed exemptions. However, in the show cause-cum-demand notice issued subsequently by the office of respondent No.2 on 13.11.2019 this claim was brushed aside and upon addition of service tax on Ocean Freight the total service tax liability got enhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to submit necessary documents and record. 5. Pursuant to such summons, petitioner No.2 got his statement recorded on 04.06.2019 and again on 12.06.2019. The statements were recorded under section 70 of the Central Goods and Services Tax Act, 2017 read with section 174 of the said Act and section 83 of the Finance Act, 1994. In the statement recorded on 12.06.2019, question No.2 put to petitioner No.2 by the Senior Intelligence Officer was what was the turnover and what was the quantum of service tax paid by petitioner No.1 from 2014 onwards? While answering the above query, petitioner No.2 summarized the service tax liability of petitioner No.1 wherefrom it was discernible that the gross service tax liability for the period from 2014-15 to 2017-18 (upto June, 2017) was ₹ 1,73,12,978.00. It is stated that on 04.06.2019 itself petitioners had paid an amount of ₹ 60 lakhs against the service tax liabilities vide seven challans. 6. Notwithstanding the above, office of respondent No.2 issued show cause-cum-demand notice dated 13.11.2019 to petitioner No.1 re-quantifying service tax liability of petitioner No.1 at ₹ 1,96,02,184.00. It may be mentioned that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, after investigation was concluded, the total liability including service tax on Ocean Freight was quantified at ₹ 1,96,02,184.00. Following this, show cause-cum-demand notice dated 13.11.2019 was issued by office of respondent No.2. Thus, as per the report from DGGI, the tax dues were not fully quantified before 30.06.2019. It was quantified only on 13.11.2019 i.e., after the cut-off date of 30.06.2019. Another contention advanced is that the total duty involved i.e., the final quantified amount during investigation would be considered for relief provided the quantification is communicated before 30.06.2019. Since that was not done, designated committee rightly rejected the declaration of the petitioner. 12. Petitioners have filed rejoinder affidavit disputing the contentions advanced by the respondents and reiterating the averments made in the writ petition. 13. Submissions made by learned counsel for the parties are on pleaded lines. Therefore, a detailed reference to the same is considered not necessary. However, the submissions so made have received the due consideration of the Court. 14. Issue raised in the present writ petition i.e., eligibility of petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner s tax dues were quantified on or before 30th June, 2019. 50. In that view of the matter, we have no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019. 16. Subsequently in M/s. G.R. Palle Electricals Vs. Union of India, 2020-TIOL-2031-HC-MUM-ST = 2020 (11) TMI 845 - BOMBAY HIGH COURT , this Court held as follows:- 27. We have already noticed that proprietor of the petitioner in his statement recorded on 11.01.2018 by the investigating authority admitted the service tax liability of ₹ 60 lakhs (approximately) to be outstanding for the period from 20152016 to June, 2017. This was corroborated by the departmental authority in the letter dated 24.01.2018 which we have already noted and discussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntimating duty demand or duty liability admitted by the person during enquiry, investigation or audit etc. 23. Reverting back to the facts of the present case we find that there is clear admission / acknowledgment by the petitioner about the service tax liability. The acknowledgment is dated 27.06.2019 i.e., before 30.06.2019 both in the form of letter by the petitioner as well as statement of its Director, Shri. Sanjay R. Shirke. In fact, on a pointed query by the Senior Intelligence Officer as to whether petitioner accepted and admitted the revised service tax liability of ₹ 2,47,32,456.00, the Director in his statement had clearly admitted and accepted the said amount as the service tax liability for the period from 2015-16 upto June, 2017 with further clarification that an amount of ₹ 1,20,60,000.00 was already paid. * * * * * 26. Following the above it is evident that the word quantified under the scheme would mean a written communication of the amount of duty payable which will include a letter intimating duty demand or duty liability admitted by the person concerned during enquiry, investigation or audit or audit report and not necessarily the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the subsequent quantification by the authorities in the form of show-cause notice etc. post 30.06.2019. The object of the scheme is to encourage persons to go for settlement who had bonafidely declared outstanding tax dues prior to the cut off date of 30.06.2019. The fact that there could be discrepancy in the figure of tax dues admitted by the person concerned prior to 30.06.2019 and subsequently quantified by the departmental authorities would not be material to determine eligibility in terms of the scheme under the category of inquiry, investigation or audit. What is relevant is admission of tax dues or duty liability by the declarant before the cut off date. Of course the figure or quantum admitted must have some resemblance to the actual dues. In our view, petitioner had fulfilled the said requirement and therefore he was eligible to make the declaration in terms of the scheme under the aforesaid category. Rejection of his declaration therefore on the ground of ineligibility is not justified. 20. Thus, what is of essence under the scheme is an admission of tax dues or duty liability by the declarant before the cut-off date which need not be of the exact figure upon de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection of an application without affording any opportunity of hearing to the declarant would be in violation of the principles of natural justice. Rejection of application (declaration) will lead to adverse civil consequences for the declarant as he would have to face the consequences of enquiry or investigation or audit. As has been held by us in Capgemini Technology Services India Limited (supra) it is axiomatic that when a person is visited by adverse civil consequences, principles of natural justice like notice and hearing would have to be complied with. Non-compliance to the principles of natural justice would impeach the decision making process rendering the decision invalid in law. 23. While on natural justice we may also mention that respondents have averred in their affidavit that report from the DGGI, Mumbai Zonal Unit was called for pursuant to which report dated 20.02.2020 was furnished. This report was adverse to the petitioners in as much as it said that there was no full quantification of service tax dues prior to 30.06.2019. On the basis of this report, the declaration of petitioner No.1 was rejected. It is a settled proposition of law that when an authority re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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