The Madras High Court held that the interest paid during the investigation should also be considered payment, under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2018.
The petitioner, M/s.Vamsee Overseas Marine Private Limited in the course of investigation deposited a sum of Rs.66,05,012 towards tax liability and a sum of Rs.16,58,328 towards interest. A show-cause notice was issued and after hearing the petitioner, an order-in-original was passed on September 16, 2014, confirming the proposals in the notice. An appeal was stated to have been filed before the Customs Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, which is pending.
In the meanwhile, the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2018 (Scheme) was announced by the Government providing for the settlement of pending disputes. The petitioner availed of the Scheme and its declaration has been accepted with a variation in the computation of the amount payable in terms thereof.
According to the respondent, only the sum of Rs.66.05 lakhs remitted towards tax would be given credit to but not the sum of Rs.16.58 lakhs as the latter was remitted towards interest, and accounted for by the Department under that head, not liable to be taken into the reckoning in the computation under the Scheme.
The petitioner however, relies on the provisions of Section 125(2) as per which ‘any amount’ paid as a pre-deposit or prior to issue of Show Cause Notice should be taken into account and given credit to in quantifying the amount liable to be paid under the Scheme.
The petitioner has, admittedly, remitted amounts of Rs.66.05 and Rs.16.58 lakhs as deposits even prior to the issuance of show cause notice. However, the petitioner has specifically demarcated the amount of Rs.66.05 lakhs as towards tax and Rs.16.58 lakhs as towards interest. Thus the respondent, while accepting the eligibility of the petitioner to the benefit of the Scheme, has proceeded to ignore the amount of Rs.16.58 lakhs, since the amount has been credited under the accounting head relevant for interest payments.
The single bench of Justice Anita Sumanth while allowing the petition held that if only the petitioner had remitted the entire amount of Rs.82,63,340 (Rs.66.05 plus Rs.16.58 lakhs) towards tax, the respondent would have simply given credit to the entire amount, waiving interest liability in full. It is the apportionment that has given rise to the present situation and the petitioner must not be made to suffer on account of irrelevant fact.
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