The Bombay High Court quashed the decision of the Designated Committee wherein it rejected the declaration under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS).
In May, 2014, an investigation was initiated against the petitioner, Morde Foods Pvt. Ltd. by the Directorate General of Central Excise Intelligence alleging that the goods supplied by the petitioners to industrial / institutional consumers through distributors were not covered under the exemption provided in rule 3 of the Legal Metrology (Packaged Commodity) Rules, 2011 and, therefore, excise duty was payable on such goods on MRP basis under section 4A of the Act. At the stage of investigation, petitioners paid Rs.1,65,00,000 under protest.
The show cause notice was issued to petitioner for recovering the differential excise duty payable by petitioner along with interest and penalty.
The adjudicating authority passed order-in-original confirming the demand of differential central excise duty amounting to Rs.4,06,47,261 along with interest and penalty in respect of goods cleared.
The Petitioners challenged the said order-in-original by filing appeal before CESTAT. The appeal was finally heard by the CESTAT wherein it set aside the order-in-original and remanded the matter back to the original authority for a fresh decision after hearing the petitioners.
While according to the respondents, CESTAT had confined re-hearing by the original authority upon remand to the question of limitation only, petitioners have contended that CESTAT had set aside the order-in- original and thereafter had remanded the matter for de novo decision.
The petitioner had challenged the order-in-original on the ground of erroneous computation in determining duty liability resulting in higher duty liability; impropriety in imposition of penalty etc. However, at the time of hearing, it was primarily argued that the show cause notice was barred by limitation.
The CESTAT came to the conclusion that the adjudicating authority did not apply its mind to the essential aspect of limitation which has a bearing on the outcome of the process initiated by the show cause notice. Therefore, the impugned order-in-original was set aside and the matter was remanded back to the original authority for a fresh decision on the point of limitation after granting an opportunity to the appellant to be heard on all the submissions made in the appeal.
The Division Bench of Justice Ujjal Bhuyan and Justice Abhay Ahuja noted that the decision of the designated committee rejecting the declaration of petitioner under the litigation category on the ground of ineligibility was not correct and is liable to be interfered with.
Therefore, the court set aside the decision of the designated committee and remand the matter back to the designated committee to take a fresh decision in accordance with law after giving due opportunity of hearing to the petitioners by treating its declaration under the litigation category as a valid declaration.
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