Gujarat High Court
Satish Karunakaran Nair (Partner) vs The Chief Commissioner on 26 September, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/6745/2020 ORDER DATED: 26/09/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6745 of 2020
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SATISH KARUNAKARAN NAIR (PARTNER)
Versus
THE CHIEF COMMISSIONER & ANR.
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Appearance:
MR HARJOTSINGH J KASSOWAL(11053) for the Petitioner(s) No. 1
MR CB GUPTA(1685) for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MRS. JUSTICE MAUNA M. BHATT
Date : 26/09/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Rule. Learned advocate Mr. C. B. Gupta waives service of notice of admission on behalf of the respondents.
2. By this petition under Article 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs:-
"21 a) The Hon'ble Court may be pleased to direct the Respondents to consider the amount of Rs.60,24,733/- as the pre-deposit/under protest money according to the Circular No. 1074/07/2019- CX issued by Ministry Of Finance, Department Of Revenue, Central Board Of Indirect Taxes And Page 1 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024 NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined Customs so that petitioner may be able to honor the SVLDRS-3 demand and can avail the relief available under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 read with Circular no 1071/4/2019-CX.8 dated 27.08.2019. and or
b) The Hon'ble Court may be pleased to direct the Respondents to refund the amount of Rs.60,24,733/-
before 31-3-2020 which was reversed as Cenvat Credit by the petitioner so that the petitioner can avail the relief available under the Sabka Vishwas (Legacy Dispute Resolution) Scheme,2019 read with Circular no 1071/4/2019-CX.8 dated 27.08.2019; and/or
c) and/or The Hon'ble Court may be pleased to pass any other and further order and/or direction, as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case and in the interest of justice."
3.1 The brief facts of the case are that the petitioner who is engaged in the manufacturing of Cable Tray and perforated cable tray manufactured from Galvanized M.S. and Aluminium, slotted channels of GI/M. S. etc. falling under heading 73089090 and 76109090 of the first schedule of the Central Excise Tariff Act, 1985 was subjected to proceedings initiated under the provisions of Central Excise Act pursuant to the investigation carried out by the department. The order-in- original dated 21.10.2016 was passed by the Principal Page 2 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024 NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined Commissioner, Central Excise and Customs, Vadodara-II arising out of the show-cause notice dated 06.10.2016 whereby the petitioner was subjected to the Central Excise Duty aggregating to Rs.2,20,39,537/- and interest on the said amount. As per the said order-in-original the Cenvat Credit of Rs.59,32,614/- was disallowed which was availed and utilized in terms of Rule 14(1) of the Cenvat Credit Rules, 2004 r/w Section 11A of the Central Excise Act, 1944 ('the Act' for short) and order for recovery of the said amount was also passed. Further, a penalty of Rs.2,20,39,537/- and interest of Rs.59,32,614/- was also imposed under the relevant provisions of the Act.
3.2 Being aggrieved, the petitioner preferred appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT) which was admitted as Appeal No. E/10324/2017-DB dated 10.02.2017. The petitioner also paid pre-deposit of Rs.50,08,682/- being 7.5% as pre-requisite for preferring an appeal as per the provisions of the Act.
3.3 It is the case of the petitioner that the petitioner filed Central Excise Return i.e. ER-1 electronically for the month of September, 2015 immediately after obtaining registration indicating that in addition to already deposited cash amount of Rs.50,08,682/-, the petitioner had also reversed wrongly availed cenvat credit of Rs.59,32,614/- by debiting Rs.60,24,733/- in the cenvat credit account under the other payment column which included cenvat credit of Rs.57,67,254/- and input service tax credit of Rs.2,57,479/-.
3.4 It is the case of the petitioner that thereafter the Sabka Page 3 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024 NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined Vishwas (Legacy Dispute Resolution) Scheme, 2019 ('SVLDRS) was introduced vide Circular No. 1071/4/2019-CX.8 dated 27.08.2019 by the Government. The petitioner thereafter preferred Form-SVLDRS-1 along with the declaring total amount of litigation of Rs.2,79,72,151/- and the amount of predeposit/any other deposit of duty Rs.1,10,33,415/- which included reversal of cenvat credit of Rs.60,24,733/-.
3.5 The respondent Designated Committee in response to the declaration filed by the petitioner issued the Form-SVLDRS-3 on 07.02.2020 indicating that the petitioner was required to pay an amount of Rs.89,77,393.50 excluding the amount of Rs.60,24,733/- which was claimed by the petitioner as other deposit towards the payment.
3.6 The petitioner relying upon the provisions of the scheme pointed out to the respondent No.2 during the personal hearing held on 22.01.2020 that the petitioner is entitled to the credit of Rs.60,24,733/- and the petitioner would not be liable to pay the amount of Rs.89,77,393.50 but the petitioner would be ready and willing to pay the amount after consideration of the amount of Rs.60,24,733/-. The petitioner therefore could not pay the amount as stipulated in Form SVLDRS-3 and thereafter preferred this petition with the aforesaid prayers.
4. Learned advocate Mr. Harjotsingh Kassowal for the petitioner submitted that the petitioner had reversed the cenvat credit of Rs.60,24,733/- in the Central Excise Return Form ER- 1 in 2015 and the same was therefore required to be considered as other deposit for the payment to be made under Page 4 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024 NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined the scheme. It was submitted that the petitioner therefore could not pay amount of Rs.89,77,393.50. It was submitted that the petitioner is ready and willing to pay the entire amount of Rs.89,77,393.50 with interest if the same is permitted so as to avail the benefit of the benevolent scheme. It was submitted that the petitioner under bonafide belief did not pay the amount.
4.1 In support of his submissions, learned advocate Mr. Harjotsingh Kassowal for the petitioner relied upon the decision of the Bombay High Court in the case of Shri Arjun Amarjeet Rampal V/s. Union of India and Ors in Writ Petition No. 1468 of 2021 rendered on 30.03.2023 to submit that the Bombay High Court in the facts of the said case permitted the petitioner to deposit the amount as per Form SVLDRS-3. It was submitted that after considering the settled legal position that the benefit of benevolent scheme is required to be granted keeping in mind the objective of the scheme, the petitioner should not be deprived of the benefit benevolent scheme. It was therefore submitted that the petitioner may be granted the benefit of the scheme by permitting the petitioner to deposit the amount determined under Form SVLDRS-3.
5. On the other hand, learned advocate Mr. C. B. Gupta for the respondents submitted that admittedly the petitioner has not deposited any amount out of the total amount of Rs.89,77,393.50 determined under the Form SVLDRS-3 which was required to be paid on or before 30.06.2020. It was submitted that by permitting the petitioner to pay the amount as on today would amount to modifying the scheme which is Page 5 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024 NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined not permitted by the Hon'ble Supreme Court in the case of M/ s. Yashi Constructions V/s. Union of India decided in Special Civil Appeal No. 2070 of 2022. It was submitted that it is settled proposition of law that a person who wants to avail the benefit of a particular scheme has to abide by the terms and conditions of the scheme scrupulously. It was further submitted that not only the time to make payment has expired long back but the scheme is also now over and therefore this Court should not differ the date of payment which would amount to modification of the scheme which is prerogative of the Government only.
6. Considering the submissions, the facts of the case are not in dispute. Admittedly, the petitioner did not deposit the amount of Rs.89,77,393.50 as per Form SVLDRS-3 issued by the respondent No.2 after considering the Form SVLDRS-1 filed by the petitioner. The ground on which the petitioner had not deposited the money to avail the benefit under the scheme is of no consequence inasmuch as the facts remains that the petitioner had not abided by the terms and conditions of the scheme which stipulate that the petitioner was supposed to make the payment within 30 days from the issuance of the Form SVLDRS-3.
7. The Hon'ble Apex Court in the case of M/s. Yashi Constructions (supra) has held as under:-
"In that view of the matter, the High Court has rightly refused to grant relief to the petitioner for extension of the period to make the deposit under Page 6 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024 NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined the Scheme. It is a settled proposition of law that a person, who wants to avail the benefit of a particular Scheme has to abide by the terms and conditions of the Scheme scrupulously. If the time is extended not provided under the Scheme, it will tantamount to modifying the Scheme which is the the prerogative of the Government."
8. In view of the above dictum of law, we are of the considered opinion that the petitioner can not get the benefit of Form SVLDRS-3 and permitting the petitioner to pay the amount as per the Form SVLDRS-3 would amount to modify the scheme by extending the date of payment which is not permissible.
9. Reliance placed by the petitioner on the decision of Bombay High Court in the case of Shri Arjun Amarjeet Rampal (supra) is also of no help to the petitioner as in the facts of the said case the petitioner could not deposit the amount due to some technical glitch as stated in the facts of the said case in Paragraph No. 4 of the order which reads as under:-
"4. On 1 September 2019, the Central Government introduced Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 ("SVLDR Scheme") to bring an end to pending litigation under the indirect tax regime. Petitioner took advantage of this scheme and filed SVLDRS-1 on 30 December 2019 for the period April 2016 to June 2017 declaring Rs. 9,16,203/- as tax dues. As noted above on 23 Page 7 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024 NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined February 2020, Form SVLDRS-3 was issued to Petitioner directing payment of Rs. 2,74,860/- to avail the benefit under the scheme. In compliance thereof Petitioner generated mandate form (Challan) from the Central Board of Indirect Taxes and Customs (CBIC) portal. Petitioner could not visit the bank to make the payment due to the nationwide lockdown in view of Covid-19 Pandemic. Thereafter, reminder letters dated 8 June Nikita Gadgil page 2 of 12 WP 1468-2021 2020 and 11 June 2020 were sent by Respondent No.7-The Superintendent of Investigation team, CGST, informing Petitioner that due date for payment of tax dues shown in SVLDRS-3 had been extended and Petitioner was required to pay the said amount by 30 June 2020. Petitioner thereafter again tried to generate the challan from the CBIC portal to make the payment. However, payment vide Real Time Gross Settlement (RTGS) dated 22 June 2020 was initially accepted but the same was reversed and refunded to the Petitioner's account. Thereafter, Petitioner once again tried to generate new challan from the CBIC website, but was unsuccessful. Vide letter dated 7 July 2020, Petitioner communicated the same to the Respondents No. 4 and 5-Dy. Commissioner, CGST and Joint Commissioner, CGST and requested for regeneration of the challan."
10. Considering such facts the Bombay High Court in Paragraph 10 of the order has held as under:-
Page 8 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024NEUTRAL CITATION C/SCA/6745/2020 ORDER DATED: 26/09/2024 undefined "10. Above stated facts are not in dispute. The only issue that arises for our consideration is whether Petitioner can be denied benefit of SVLDR Scheme due to his inability to make payment of Rs.2,74,860/- pursuant to Form SVLDRS-3 in view of the expiry of the challan (mandate form) in the face of the fact that although the payment that was made vide RTGS dated 22 June 2020 was initially accepted but later on reversed and refunded to the Petitioner's bank account due to an expired challan."
11. In view of above, the decision in the case of Shri Arjun Amarjeet Rampal (supra) would not be applicable in the facts of the case when the petitioner has failed to deposit any amount as per the Form SVLDRS-3.
12. In view the foregoing reasons, the present petition fails and is accordingly dismissed with no order as to costs.
(BHARGAV D. KARIA, J) (MAUNA M. BHATT,J) SHRIJIT PILLAI Page 9 of 9 Uploaded by SHRIJIT PILLAI(HC01400) on Mon Oct 14 2024 Downloaded on : Sat Oct 19 21:45:58 IST 2024