R. M. LODHA, J.

( 1 ) THE present petition under Article 226 of the Constitution of india is directed against the order passed by the Commissioner of central Excise, Mumbai-II rejecting the declaration filed by the petitioners under Kar Vivad Samadhan Scheme, 1998 contained in the Finance (No. 2) Act, 1998.

( 2 ) THE controversy in the writ petition arises, in the facts and circumstances, that may be briefly noticed by us first.

( 3 ) THE petitioners are engaged in the manufacture of aerated water, soft drinks, fruit-pulp based drinks. Their factory is situate at off Sion Trombay Road, Chembur, Mumbai. The aerated water, soft drinks, fruit-pulp based drinks manufactured by the petitioners are liable to the Central Excise Duty. The Assistant Collector of Excise did not allow the deduction from the price towards certain postmanufacturing expenses to determine assessable value for the period from 1. 10. 1979 to 30. 6. 1983. The petitioners were issued with 20 show-cause notices and in the amount of Rs. 98,37,567,51 was raised. The Assistant Commissioner of Central Excise took up the adjudication of the show-cause notices and passed an order in original No. 24/96 on 31. 5. 1996 whereby he disallowed the abatement towards post manufacturing expenses and trade discount (Rebate on cash sales ). Aggrieved by the said order, the petitioners preferred appeal before the Commissioner of Central Excise (Appeals), Mumbai. The Commissioner of Central Excise (Appeals), mumbai rejected the appeal on 14. 1. 1999. The petitioners claim to have received the copy of the order in appeal dated 14. 1. 1999 on 23. 2. 1999.

( 4 ) KAR Vivad Samadhan Scheme, 1998 (the scheme) came into effect on 1st September, 1998 by the Finance (No. 2) Act, 1998. Under the scheme, the tax payer was required to file declaration for settling the tax arrears between 1st September, 1998 and 31st January, 1999. It is the petitioners case that in order to put an end to the litigation and settle the tax arrears of Rs. 31,62,625. 34, they opted to avail the aforesaid scheme and made an application under section 88 of the finance Act, 1998. The Commissioner of Central Excise, Mumbai-II as the designated authority rejected the petitioners declaration on the ground that no appeal was pending before the appellate authority as on the date of the filing of the petition and, therefore, the petitioners were not eligible for the benefit of the scheme in view of the provisions contained in section 95 (c) of the Finance Act, 1998. The petitioners have averred that they made representation to the central Board of Excise and Customs on 6th March, 1999 for directing the designated authority to accept the declaration filed by the petitioners as valid under the scheme. However, the Central board of Excise and Customs did not respond to the petitioners representation and hence, they approached this court by means of the said petition.

( 5 ) MR. V. Sridharan, the learned counsel for the petitioners took us through the various provisions of the scheme and submitted that the expression "pending" in section 95 (c) of the Finance Act, 1998 must be given a workable meaning. He submitted that in so far as the petitioners were concerned, the appeal was pending before the appellate authority since on the date of the filing of the declaration, they had not received any communication of rejection of the appeal. The learned counsel would submit that the further appeal could have been preferred by the petitioners only after receipt of the communication of the order and on the date the declaration was made by the petitioners, limitation for filing the appeal against the order dated 14. 01. 1999 had not even commenced much less expired. Mr. Sridharan submitted that the appeal is continuation of the proceedings; as a matter of fact, the petitioners preferred the appeal before the CEGAT and, therefore, the appeal must be treated as pending on the date, the declaration was made on 30th January, 1999 b