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2015 Supreme(MP) 1125
IN THE HIGH COURT OF MADHYA PRADESH
A.M. KHANWILKAR, CJ, SANJAY YADAV, J.
MECH & FAB INDUSTRIES — Appellant
Vs.
UNION OF INDIA — Respondent
Writ Petition No. 1231 of 1999
Decided on : 20-11-2015
Advocate Appeared:
For the Appellant :H.K. Upadhyay, Advocate
For the Respondent:S.A. Dharmadhikari, Advocate
The correctness of the declaration submitted under a settlement scheme should be judged on its own merits and not based on the stand taken by the assessee in previous correspondence with the Department.
Headnote:
Misdeclaration - Customs and Central Excise - Section 89 of the Finance (No.2) Act, 1988 - Summary of Acts and Sections: Section 89 of the Finance (No.2) Act, 1988 - The court discussed the declaration filed by the petitioner under Section 89 of the Finance (No.2) Act, 1988 in respect of Kar Vivad Samadhan Scheme, 1998 and the communication exchanged between the petitioner-assessee and the Department. The court highlighted the importance of the prescribed format for the declaration and the relevance of the disclosures made by the assessee in the declaration. The court emphasized that the correctness of the declaration cannot be judged based on the stand taken by the assessee in previous correspondence with the Department, and that the declaration should be treated as relevant facts for consideration under the Scheme.
Fact of the Case:
The petitioner challenged a communication-cum-order from the Department rejecting the petitioner's declaration under the Kar Vivad Samadhan Scheme, 1998, alleging misdeclaration without giving the petitioner an opportunity to pursue the declaration.
Finding of the Court:
The court held that the Department committed a manifest error in non-suiting the petitioner at the threshold and quashed the impugned communication, directing the Appropriate Authority to process the petitioner's proposal/declaration under the Scheme as per law.
Issues: The core issue was whether the factual position stated by the petitioner in the declaration was incorrect and whether the petitioner was entitled to the benefit of the Kar Vivad Samadhan Scheme, 1998.
Ratio Decidendi: The correctness of the declaration submitted in the prescribed form for settlement of the dispute under the Scheme cannot be judged based on the stand taken by the assessee in previous correspondence with the Department. The declaration should be treated as relevant facts, and the correctness thereof should be judged on its own merits.
Final Decision: The petition succeeded, and the impugned communication was quashed and set aside. The Appropriate Authority was directed to process the petitioner's proposal/declaration under the Scheme as per law.
A.M. Khanwilkar, CJ.
This writ petition under Article 226 of the Constitution of India takes exception to the communication-cum-order conveyed to the petitioner by the Department issued under the signature of Commissioner dated 3rd March, 1999 (Annexure P-12). The same reads thus:-
Office of the Commissioner, Customs & Central
Excise, Commissionerate : Indore -II,
Opposite Maida Mill, Hoshangabad Road,
Bhopal - 462011
C.O.IV(16)Decl-26/98/Samadhan/6185
Bhopal, dated 03.03.99
To
M/s Mech & Fab Industries
17-B, Sector-D, Industrial Area,
Govindpura,
Bhopal.
Sub: Declaration No.26/98 filed by you under the Kar Vivad Samadhan Scheme, 1998.
Please refer to your Declaration dated 04.12.98 filed under the Kar Vivad Samadhan Scheme (allotted Decl. No.26/98), seeking settlement of case relating to Show Cause Notice No.V(85)15-40/96/Adj/61911 dated 10.12.96, and subsequent Order-in-Original No.12/CEX/97 dated 24.09.97 declaring tax arrears of Central Excise Duty of Rs. 269944 and Penalty of Rs. 364238.
From the declarations dated 04.12.98 filed by you, it is noticed that you have shown the amount of tax arrears as under:-
|
| Amount of Tax arrears as per show cause | Amount paid on or before filing of decln. | Balance amount payable as on the date of decln. |
| Duty | 3,64,238/- | 94,294/- vide PLA E. No. 02 dated 15.6.1998 | 2,69,944/- |
| Fine | Nil | Nil | Nil |
| Penalty | 3,64,238/- | Nil | 3,64,238/- |
| Interest | 20% from date of liability | Nil | 20% from date of liability |
On inquiry, it has been found that you, vide your letter No.MF/EXCISE/98 dated 15.06.1998 have intimated to Commissioner (Appeals), Bhopal that you have made the pre-deposit of total duty of Rs. 3,64,238/- vide PLA Entry Nos.26,27,28,29,30 dated 04.10.96, PLA Entry Nos.34 dated 09.10.96, PLA Entry No.02 dated 15.06.98 & RG23A Pt.II Entry No.306 dated 16.06.98. Thus you have mis-declared the amount of pending arrears in your aforesaid declarations.
Further, you have taken re-credit of Rs. 1,96,500 in you RG23A Pt.II account in pursuance to the Assistant Commissioner, Central Excise, Division-Is letter CNO.IV(16)518-KVS/98/7569 dated 02.12.98, without first paying the said amount from PLA. The recredit thus taken is not proper and legal.
Since, the facts show this to be a case of wilful misdeclaration, in order to avail maximum undue benefit at the cost of the exchequer, the declarations is hereby rejected.
Sd/-
(Subhash Chander)
Commissioner
Copy to:-
1. The Assistant Commissioner, Central Excise, Division-I, Bhopal for information.
2. The Superintendent, Central Excise, Range-IV, Bhopal for information.
Sd/-
(Subhash Chander)
Commissioner"
(Emphasis Supplied)
2. According to the petitioner, the Authority committed manifest error in non-suiting the petitioner at the threshold on the finding that the declaration filed by the petitioner was incorrect or a case of misdeclaration, without giving opportunity to the petitioner to pursue the declaration to its logical end. The petitioner submits that the Authority clearly glossed over the factual position stated in the declaration, which is on affidavit filed in the prescribed form. That factual position stated in the declaration alone should be reckoned for considering the claim of the Petitioner with reference to the benefits to be extended under the Scheme. It is contended that the correspondence exchanged between the petitioner-assessee and the Department and the claim of the petitioner founded on such correspondence, at best, was a matter to be considered while processing the declaration of the assessee for recording opinion as to whether the assessee was entitled for the benefit of the Kar Vivad Samadhan Scheme, 1998 as propounded.
3. The respondents, on the other hand, submit that the figures stated by the petitioner in the communication sent by the petitioner dated 15th June, 1998 are not matching wit
