9911796707
TMI Blog2006 (4) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,40,753/- and issued a demand notice on 18th May, 1998 requiring the petitioners to pay the said amount along with penalty of Rs. 5,000/-. 2. Dissatisfied with the order-in-original dated 12th November, 1997 passed by the Assistant Commissioner of Central Excise and the order of Range Superintendent dated 18th May, 1998, the petitioners preferred appeal before the Commissioner of Central Excise (Appeals) on 2nd September, 1998 along with stay application. The Commissioner of Central Excise (Appeals) vide order dated 28th December, 1998 asked the petitioners to deposit the entire amount of duty and penalty within four weeks from the dale of the order. 3. Finance (No. 2) Act, 1998, came out with Scheme known as "Kar Vivad Samadhan Scheme, 1998" (for short, 'KVSS'). The said scheme provided for settling the tax arrear by paying 50% of the disputed tax arrear. Under the KVSS, the Commissioner of Central Excise is said to have been appointed as Designated Authority. The scheme was operative from 1st September, 1998 to 31st January, 1999. The petitioners filed declaration under Section 89 of the Finance Act, 1998 before the Commissioner of Central Excise on 31st December, 1998. 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioners deposited the entire duty and penalty on 7th October, 2004. 12. The Office of Superintendent of Central Excise vide letter dated 3rd November, 2004 asked the petitioners to pay the interest of Rs. 11,58,647/- under Section 11AA of the Central Excise Act, 1944 for delayed payment of duty. By subsequent letter dated 22nd November, 2004 the petitioners were again called upon to pay the interest of Rs. 11,58,647/- failing which they were informed that recovery of Government dues shall be made under Section 142 of the Customs Act, 1962. 13. Despite repeated letters when the petitioners failed to pay interest amount of Rs. 11,58,647/-, the Superintendent of Central Excise vide letter dated 29th September, 2005 again called upon the petitioners to pay the interest (Government dues) immediately. It was sent a letter to the Commissioner of Central Excise for reconsideration of the matter. 14. The Commissioner of Central Excise vide letter dated 19th October, 2005 informed the petitioners that benefit of KVSS cannot be extended to them as the scheme is no longer in existence. It is then that the petitioners approached this Court by filing writ petition. The petitioners hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments : (i) Sheth Enterprises Pvt. Ltd. v. Commissioner of Customs, Kandla, 2000 (115) E.L.T. 53; (ii) Commissioner of Income-tax, Rajkot v. Shatrushailya Digvijaysingh Jadeja, 2005 (192) E.L.T. 3 (S.C.); (iii) Hydromatik Belgaum Pvt. Ltd., v. Commissioner of Central Excise, Belgaum, 2003 (154) E.L.T. 49; (iv) Commissioner of Central Excise, Belgaum v. Hydromatic Belgaum Pvt. Ltd., 2005 (191) E.L.T. 104; and (v) Wearwell Tyres & Tubes Industries Pvt. Ltd., Bhopal v. Commissioner, 2003 (162) E.L.T. 1167. 18. The legal position in respect of Section 95(i)(c) of Finance (No. 2) Act, 1998 - KVSS - is expounded by the Supreme Court recently in the case of Shatrusailya Digvijaysingh Jadeja and, therefore, we do not deem it necessary to refer to the judgments of the High Courts cited by the counsel for the petitioners. In Shatrusailya Digvijaysing Jadeja, the question for consideration before the Supreme Court was whether the revenue was right in rejecting the KVSS declarations file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case. 13. One more aspect needs to be looked into. The Finance (No. 2) Act, 1998 introduced a Scheme called Kar Vivad Samadhan Scheme, 1998. It was a recovery Scheme. Under the Scheme, the tax arrear had to be outstanding as on 31-3-1998. Under Section 87(f), "disputed tax" was defined to mean total tax determined and payable under the IT Act/Wealth Tax Act in respect of an assessment year but which remained unpaid as on the date of making of the declaration from which TDS, self-assessed tax, advanced tax paid, if any, had to be deducted under Section 90; the DA had to determine the amount payable and for that purpose, he had to determine the tax arrear as well as the disputed amount as defined under Section 87(f). Thus, the DA had to make an assessment of tax arrears, disputed amount and amount payable for each year of assessment; that appeal was barred against the order under Section 90 (see Section 92); that such determination had to be done within 60 days from the receipt of the declaration and based thereon the DA had to issue a certificate. In other words, till the completion of the aforestated exercise, the appellant could not have paid the amount of tax and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; in respect of tax arrear under any direct tax enactment, - (a) in a case where prosecution for concealment has been instituted on or before the date of filing of the declaration under Section 88 under any direct tax enactment in respect of any assessment year to any tax arrear in respect of such assessment year under such direct tax enactment or in respect of a concealment on or before the date of filing the declaration; (b) in a case where an order has been passed by the Settlement Commission under sub-section (4) of Section 245D of the Income-tax Act or sub-section (4) of Section 22D of Wealth-tax Act, as the case may be, for any assessment year, to any tax arrear in respect of such assessment year under such direct tax enactment; (c) to a case where no appeal or reference or writ petition is admitted and pending before any appellate authority or High Court or the Supreme Court on the date of filing of declaration or no application for revision is pending before the Commissioner on the date of filing declaration. (ii)&nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he report of, the Advisory Board under Section 8, read with sub-section (2) of Section 9 of the said Act, or (c) such order of detention, being an order to which the provisions of Section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under Section 8, read with sub-section (6) of Section 12A, of the said Act; or (d) such order of detention has not been set aside by a court of competent jurisdiction; (v) to any person notified under sub-section (2) of Section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (27 of 1992)." 21. Section 95(i) is in respect of tax arrear under any direct tax enactment, while Section 95(ii) is in respect of tax arrear under any indirect tax enactment. 22. However, form the facts and circumstances which we indicate hereunder, it would be clearly seen that the judgment of the Supreme Court in the case of Shatrusailya Digvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 1997/18th May, 1998 was taken to the logical conclusion. In the meanwhile, it is true that the petitioners on 24th April, 2001 requested the Designated Authority to reconsider the order dated 25th February, 1999, but such request was wholly misconceived. The petitioners repeated the said request on few more occasions, but these requests were turned down. The counsel for the petitioners sought to urge that the request for reconsideration of the order dated 25th February, 1999 was turned down by the Designated Authority on erroneous premise that KVSS was no longer in existence and had expired on 31st January, 1999. What is important is not the reason of turning down the request made by the petitioners for reconsideration of the order dated 25th February, 1999 but whether such request was legally tenable. If at all the petitioners were aggrieved by the order dated 25th February, 1999 rejecting their declaration under KVSS, they ought to have challenged the same in appropriate proceedings. If appeal was not maintainable from such order then by persuing the remedy under Article 226 of the Constitution of India. But that was never done. It is only after the recovery of duty and pena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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