Back
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, RAJENDRA M. SAREEN, JJ.
SANTROGEN TEXTILES MILLS LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
SPECIAL CIVIL APPLICATION NO. 5968 of 2020
Decided On : 30-09-2021
Finance Act, 2019 - Section 129, 125(1)(f)(i), 121(m), 123(d), 124, 124(1)(e), 127 (2), (3), 130 - Customs Act, 1962 - Constitution of India, 1950 - Article 226 - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Section 125, Rule 3 - Manufactured Polyester- Central Excise Duty Not Recovered - Whether demand of central excise duty is sustainable on finished goods short paid during verification under panchnama and accepted to be cleared without payment of duty by authorized signatory of an assessee and also corroborated by shortage of principal raw materials found in verification under panchmana - Whether benefit of scheme would be available to a declarant in a case - Whether provisions of section 125(1)(f) would be attracted or not - Whether or not an enquiry or investigation is warranted - Whether declaration of petitioner was in fact valid or not under category of 'voluntary disclosure' - Whether scheme would be applicable in case of applicant in whose case challenge made before this Court - Whether same could be considered as open ended remand.
Finding of the Court:
For deciding eligibility of declarant since designated authority has enormous discretion and as it is expected to decide same on case to case basis, designated authority since has permitted verification of declaration by declarant and even otherwise, while exercising powers, various situations would arise for estimating amount, even in absence of any expressed provision under Scheme, it is always desirable that an opportunity of personal hearing be afforded - As could be noticed that twice opportunity of hearing was sought for by petitioner and same had not been granted and instead, orders have been passed straightway by authority, Court is of firm opinion that there ought to have been an opportunity of hearing, as orders passed violates basic principle of natural justice - It shall also decide as to whether scheme would be applicable in case of applicant in whose case challenge made before this Court to order of CESTAT was on a substantial question of law where only question raised was of imposing of excise duty alone without any challenge to custom duty - Without opining on question of merit, by examining chronological events which have taken place culminating into order of remand by Apex Court and whether same could be considered as open ended remand, Court direct respondent authority to avail an opportunity of hearing to petitioner and complete entire exercise at earliest, preferably within a period of six (6) weeks from date of receipt of writ of this order - Writ applicant since has already made requisite payment towards deposits, despite time limit having expired, department shall accept the payment, if there is any due left out in wake of pendency of pending litigation, same also be decided.
JUDGMENT :
SONIA GOKANI, J.
1. This is a petition preferred by the company which is 100% Export Oriental Unit engaged in manufacturing of texturised yarn (hereinafter to be referred to as ‘the firm’).
2. The petitioner is challenging the legality and validity of the communication dated 08.01.2020 rejecting the application filed by the petitioner under Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter referred to as ‘SVLDR Scheme’) propounded in the Finance Act (No. 2), 2019 on the ground that the demand against the petitioner also arises under the Customs Act, 1962 and the issues covered under the Customs Act is not covered by the Scheme.
3. The brief facts leading to the present petition are as follows: -
3.2. It was alleged that the petitioner manufactured and cleared 85889.290 kgs. of polyester texturised yarn valued at Rs. 64,25,197/- without payment of central excise duty leviable thereon. The show cause notice demanded the duty of excise and customs on the raw-material used in the manufacture of texturised yarn allegedly manufactured and removed by the petitioner.
3.3. Order-in-original (OIO for short) was passed by the Commissioner of the Central Excise and Customs, Surat-II on 15.06.2005 which confirmed the demand of Central Excise Duty to the tune of Rs. 54,82,011/- on the Polyester Texturised Yarn and Customs Duty to the tune of Rs. 23,73,808/- on the imported raw-material procured duty free and Central Excise Duty of Rs. 21,270/- of the locally procured raw-material duty free with the interest at the applicable rate.
3.4. Aggrieved by the OIO, the petitioner preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as ‘the CESTAT’). The appeals were also filed by Mr. Deora and Mr. Sharma against the penalties imposed on them. The CESTAT on 18.12.2008 in its final order set aside the OIO dated 15.06.2005 and allowed the appeals of the petitioner and those of others.
3.5. The Commissioner of Central Excise and Customs preferred Tax Appeal No. 1410 of 2009 before this Court on the substantial question of law involved therein. The Court, however, on 14.07.2010 dismissed the said appeal and upheld the order of the CESTAT.
3.6. The Special Leave Petition Nos. 9268-9270 of 2012 were preferred by the Commissioner, Central Excise and Customs before the Apex Court raising the following question of law: -
“The issue involved is as to whether the demand of central excise duty is sustainable on finished goods short paid during verification under panchnama and accepted to be cleared without payment of duty by the authorized signatory of an assessee and also corroborated by shortage of principal raw materials found in verification under panchmana?”
3.7. Vide order dated 27.02.2016, the Apex Court allowed the appeals preferred by the Commissioner of Central Excise and remanded the proceedings to the CESTAT holding that the revenue ought to have been offered an opportunity to counter the technical report filed by the assessee, by filing its technical report. According to the Apex Court, the entire controversy hinges upon the differential quantity and if there is any differential quantity, the issue of removal would arise. Thus, the appeals were allowed by way of remand, directing the adjudicating authority for quantification of the demand and to decide other consequential issues.
3.8. Pending this issue of quantification, SVLDR Scheme came to be notif
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
