Customs, Excise and Gold Tribunal - Tamil Nadu
Survarna Cements Ltd. vs Commissioner Of Central Excise on 24 February, 2000
Equivalent citations: 2000(69)ECC557, 2000(123)ELT1157(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. This stay application is against the order dated 5.11.99 passed by the Commissioner of Customs and Central Excise (Appeals), to the effect that the present appellants' appeal before him had ceased to exist as on 7.1.99. This order was passed in consideration with respect to appeal No. 284/99(H-III) CE filed by the applicants before him. In view of the said order impugned, to get this appeal heard, the applicants are required to pre-deposit a sum of Rs. 21,60,330.84 being the total duty and penalty involved since they had already paid Rs. 3 lakhs earlier.
2. Briefly the issue concerns, the question of when under the Kar Vivad Samadhan Scheme 1998 as was contained in Section 90 of the Finance (2) Act, 1998, does an appeal before the appellate authority cease to exist and/or deemed to be withdrawn? The Commissioner (Appeals) in this order impugned has held a view that as soon as the designated authority under the said Scheme passed an order in form 2 B determining the amount payable by the applicants in terms of Section 90(1) of the said Finance Act, then with effect from that date the appeal before him ceases to exist in terms of Section 90(4) ibid.
3. Heard Shri Sarabeswara Rao, learned Consultant who on the contrary submits that a plain reading of Section 90 and the Sub-sections (1) to (4) thereof of the said Act would show as follows:
(a) Under the KVSS, 1998, the assessee first makes a declaration to the effect to the designated authority under Sub-section 90(1).
(b) Thereafter, the designated authority quantifies the amount payable as tax arrears in form 2 B under Section 90(1).
(c) Thereafter the said declarant is required to pay these amounts within the specified period and submit proof of payment to the designated authority.
(d) The designated authority on being satisfied that the amounts have been correctly paid to the Government, then proceeds to issue the final certificate in form 3 in terms of Section 90(2) ibid.
(e) Once the designated authority has issued such certificate under Section 90(2) then and then alone provisions of Section 90 (4) comes into play which provides that any such appeal would be deemed to have been withdrawn on the date on which the said certificate in form 3 is issued under Section 90(2).
4. The learned Consultant applies the facts of this case to the aforesaid legal position and submits that while the designated authority had issued the certificate in form 2 identifying and fixing the amount to be paid and while the sum to the extent of Rs. 3 lakhs was paid, but because the present appellant could not pay the full amount therein, the designated authority did not issue any certificate under form 3 under Section 90(2). The net effect of this position is that the matter was not resolved and finalised under the KVS Scheme at all. That being so and there being no certificate of the designated authority in form 3 issued at all, therefore, the provisions of Sub-section (4) to Section 90 ibid would not come into operation at all. Hence the appeal before the Commissioner (Appeals) would not cease to exist and shall not be deemed to have been withdrawn. Hence the learned Consultant submits that the order impugned is erroneous and has not understood the correct position in law as explained above. Therefore, he prays that the order be set aside and the appeal before the Commissioner (Appeals) be restored to its present number and the learned Commissioner (Appeals) be directed to consider the appeal on merits.
5. Heard the learned DR.
6. On a careful consideration of these submissions as well as the detailed reading of Section 90 ibid, we are of the considered opinion that under the KVS Scheme, a declaration by the applicant is to be made to the designated authority in the prescribed form under Section 88 of the Act. After verification thereof, the designated authority is required by Section 90(1) to grant a certificate setting forth the particulars of tax arrears and the sum payable towards full and final settlement of the said arrears under the Scheme. Thereafter, time limit is provided for the declarant to pay these sums and furnish proof. On this being complied with Section 90(2) requires the designated authority to issue certificate in form 3 to the effect that full and final settlement of these tax arrears under this Scheme have been effected. Section 90(4) provides that when such certificate has been passed under Sub-section (2) ibid, then alone and with effect from the date of passing that certificate or order, an appeal pending shall be deemed to have been withdrawn. In this case, it is not disputed that the stage as envisaged under Section 90(2) had ever been reached. Since Sub-section (4) of the said Section will come into play only if such stage has been reached, and since such stage had not been reached since no certificate had been issued in form 3 as full payment had not been made by the declarant, therefore, it is our considered view that the appeal does not cease to exist but would continue before the Commissioner (Appeals).
7. In view of these analysis, we set aside the order impugned and restore the appeal No. 284/99(H-III) CE before the Commissioner (Appeals) to its original number and position and direct the learned Commissioner (Appeals) to consider the same on merits as per law. Ordered accordingly. The appeal is allowed by way of remand in the above terms.
8. In view of the matter being remanded, the stay application is also disposed of accordingly.