IMPORTANT POINT
Although High Court of Kerala was right in holding that as the appeals are still pending, the adjudication proceedings had not terminated. But High Court was wrong in ordering refund of amount paid under protest in view of clear bar u/s 93 of Kar Vivid Samadhan Scheme prohibiting refund under any circumstances.

Headnote:(i) Kar Vivad Samadhan Scheme-Section 91-Immunity from prosecution-Contention that once the company M/s. Appollo Tyres Ltd. get immunity in respect of "tax arrears", nothing survived even against the Directors/Officers-Whether correct? (No).
       Held : We are unable to accept this submission. Under the Kar Vivad Samadhan Scheme there is no adjudication on the subject matter of the demand notice or show cause notice. There is a settlement of the "tax arrears". Even though the same show cause notice may call upon the Company and its Directors/Officers to show cause, there is a separate demand for "tax arrears" against the Company and a separate demand for "tax arrears" against the Directors/Officers. Thus each entity/person would have to file a declaration separately. The settlement is in respect of each declaration. Section 91 only gives immunity in respect of matters covered in the declaration. The matter covered in the declaration by the Company is the "tax arrears" of the Company. The declaration by the Company admittedly does not cover the tax arrears of the Directors/Officers. Thus they get no immunity under Section 91 on a settlement by the Company. (Para 12)
       (ii) Kar Vivad Samadhan Scheme (Removal of Difficulties) Order-Interpretation-Clarification that it will not apply to adjudicated show cause notice -Appeals were still pending-Whether despite settlement of declaration, the adjudication proceedings had not terminated? (Yes)-Result-High Court of Kerala was right and High Court of Gujarat was right.
       Held : We have heard the parties. In our view, a reading of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order shows that where a declaration had been made in respect of a tax arrear and where in respect of the same matter a show cause notice had also been issued to any other person, then the settlement in favour of the declarant has to be deemed to be full and final in respect of other persons on whom show cause notices had been issued. It is settled law that when an Appeal is pending there is no finality to the proceedings. The proceedings are then deemed to be continuing. Undoubtedly, at one place the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order seems does state that the show cause notice should be pending adjudication. However, the same order also talks of the show cause notice being in respect of same matter on which the show cause notice has been issued to the main declarant. Then the Order provides that a settlement in favour of the declarant will be deemed to be full and final in respect of other persons also. This Order has to be read as a whole. If read as a whole, it is clear that a settlement by the main declarant is to operate as full and final settlement in respect of all other persons on whom show cause notice was issued in respect of the same matter. Thus read as a whole the words "pending adjudication" cannot be read to exclude cases where the proceedings are still pending in Appeal. Even otherwise the order has to be read along with the Kar Vivad Samadhan Scheme. Under the Kar Vivad Samadhan Scheme a party can file a declaration so long as the proceedings are pending. Thus, even though the show cause notice may have been adjudicated upon and an Appeal is pending a party could still take the benefit of the Kar Vivad Samadhan Scheme and file a declaration. The object of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order is to give benefit of a settlement by the main party (i.e. the Company in this case) to all other co-noticees. This being the object a classification, restricting the benefit only to cases where the show cause notice is pending adjudication, would be unreasonable. If read in this manner the Order would be discriminatory. An interpretation which leads to discrimination must be avoided. An interpretation, as suggested by Mr. Ganesh, would also be against the object of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order. It is therefore not possible to accept the submissions of Mr. Ganesh. In our view the reasoning given by the High Court of Kerala is correct and needs to be upheld. In any event this would clearly be a case where two views are possible. It is settled law that if two views are possible then the one which is in favour of the assessee must be adopted. On this ground also the interpretation sought to be given by Mr. Ganesh cannot be accepted. In this view of the matter, Civil Appeal Nos. 6260-6265 of 2000 are dismissed. Civil Appeal Nos. 633 to 642 of 2002 are accordingly allowed and the Judgment of the High Court of Gujarat is set aside. (Paras 14, 15 and 16)
       (iii) Kar Vivad Samadhan Scheme-Section 93-No refund of amount paid in pursuance of declaration u/s 88-Whether amounts paid by officers/directors under protest refundable? (No)-But in this case refund received is not to be recovered.
       Held : The question now arises whether the Directors/Officers are entitled to a refund. Section 93 of the Kar Vivad Samadhan Scheme reads as follows:
       "93. Any amount paid in pursuance of a declaration made under section 88 shall not be refundable under any circumstances."
       Admittedly, in this case, all the Officers have paid the amounts in pursuance of the declaration made by them under Section 88. Even if they have paid the amounts under protest they are not entitled to refund. The Directors/Officers in Kerala would also not have been entitled to refund by virtue of Section 93. However, Section 93 does not seem to have been pointed out to the High Court of Kerala. As, pursuant to the Order of the High Court of Kerala, they have received refund we do not direct that they should repay the amounts to the Revenue. The Appeals stand disposed of accordingly. There will be no order as to costs. (Paras 17 and 18)

JUDGMENT

S.N. Variava, J.-Civil Appeal Nos. 6260-6265 of 2000 are against a Judgment dated 7th March, 2000 passed by the High Court of Kerala. All the other Appeals are against a Judgment dated 14th November, 2000 passed by the High Court of Gujarat. In all these Appeals a common question arises. Therefore all these Appeals are being disposed of by this common Judgment.

2. Briefly stated the facts are as follows:

The Respondents in Civil Appeal Nos. 6260-6265 of 2000 and the Appellants in all the other Appeals are Directors/Officers of M/s Appollo Tyres Limited. M/s Appollo Tyres has a factory in Kerala and another in Gujarat. M/s Appollo Tyres Ltd. were clearing certain tyres on the basis that the tyres were for use on trailers. It was found that these tyres were then being fitted to Light Commercial Vehicles. The Commissioners of Central Excise at Kerala and in Gujarat issued show cause notices to the Company as to why excise duty and penalty be not levied. In the same Show Cause Notice the Directors/Officers were also called upon to show cause as to why penalty be not imposed on them. The Company and its Directors/Officers replied to the show cause notice. Thereafter the Commissioners of Central Excise in Kerala and Gujarat adjudicated the show cause notices and called upon the Company to pay excise and also imposed penalty. The Commissioners of Central Excise also required each Director/Officer of the Company to pay a sum of Rs. 2,00,000/- as personal penalty.

3. The Company as well as the Officers filed Appeals before the Customs Excise and Gold (Control) Appellate Tribunal. While the Appeals were pending the Kar Vivad Samadhan Scheme was announced. The relevant provisions of this Scheme read as follows:

"87. In this Scheme, unless the context otherwise requires.-

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(j) "indirect tax enactment" means the Customs Act, 1962 (52 of 1962) or the Central Excise, 1944 (1 of 1944) or the Customs Tariff Act, 1975 (51 of 1975) or the Central Excise Tariff Act, 1985 (5 of 1986) or the relevant Act and includes the rules or regulations made under such enactment;

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(m) "tax arrear" means,-

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(ii) in relation to indirect tax enactment.-

(a) the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty determined as due or payable under that enactment as on the 31st day of March, 1998 but remaining unpaid as on the date of making a declaration under section 88; or

(b) the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses interest, fine or penalty which constitutes the subject matter of a demand notice or a show-cause notice issued on or before the 31st day of March, 1998 under that enactment but remaining unpaid on the date of making a declaration under Section 88, but does not include any demand relating to erroneous refund and where a show-cause notice is issued to the declarant in respect of seizure of goods and demand of duties, the tax arrear shall not include the duties on such seized goods where such duties on the seized goods have not been quantified.

Explanation.-Where a declarant has already paid either voluntarily or under protest, any amount of duties, cesses, interest, fine or penalty specified in this sub-clause, on or before the date of making a declaration by him under section 88 which includes any deposit made by him pending any appeal or in pursuance of a court order in relation to such duties, cesses, interest, fine or penalty, such payment shall not be deemed to be the amount unpaid for the purposes of determining tax arrear under this sub-clause;

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88. Subject to the provisions of this Scheme, where any person makes, on or after the 1st day of September, 1998 but on or before the 31st day of December, 1998, a declara

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