The Delhi High Court ( HC ) held that tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 ( SVLDRS ) cannot exceed the amount confirmed by the commissioner of the central excise department.
Mukesh Jain, the Petitioner filed the present petition aggrieved by the amount of tax determined as payable by the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
The officers of Central Excise (‘the Department’) visited the premises of the Petitioner, seized the goods found available at the premises and resumed the records. The Petitioner was served with the Show Cause Notice (‘SCN’) proposing a demand and recovery of Central Excise Duty amounting to Rs. 1,34,66,456/- from the Petitioner along with the interest.
An amount of Rs. 51,60,000/,- paid during the investigation was proposed to be appropriated towards the said demand. The SCN was adjudicated vide order dated 31st October 2012 (‘order-inoriginal’), and the adjudicating authority confirmed the demand of Central Excise of Duty for an amount of Rs. 1,11,35,419/- after correcting the calculation errors.
On appeal before Customs Excise and Service Tax Appellate Tribunal (CESTAT) based on the order originally got set aside and remanded the matter was to the adjudicating authority for passing de novo orders. The matter has remained pending adjudication before the adjudicating authority.
The Petitioner was willing to avail of the SVLDRS Scheme. The Designated Committee issued Form No. SVLDRS-3 and determined the amount payable by the Petitioner as Rs. 15,73,228/- on the denova demand of the duty raised in SCN.
It was contended that the Designated Committee failed to appreciate that the order-in-original dated 31st October 2012, passed by the adjudicating authority whereby a part of the demand was set aside in SCN was not challenged by the Department.
A two-member coram comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that in the denovo proceedings, the SCN survives only for adjudication of tax dues of Rs. 1,11,35,419/-.
Further viewed that the amount confirmed by the original authority in the first round of litigation need to be considered for tax due since the said assessment was accepted by the Department. The Court directed that the disputed tax dues in respect of the Petitioner would be the amount confirmed by the original authority in the first round of litigation of Rs. 1,11,35,419/-. The determination of tax by the Designated Committee in Form No. SVLDRS-3 was set aside by the Court.
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