M/s. S. N. Jyoti Associates, Bhubaneswar & Anr. v. Union of India & Ors.

deposited Rs.56,37,449/- even at the stage of the first appeal filed by the Petitioners against the Order-In-Original dated 30th January 2013 passed by the Commissioner computing the total demand at Rs.1,03,25,054/- which included the duty amount and the interest component. It may be mentioned here that the Petitioners opted to apply under the SVLDR Scheme at the stage where an appeal against the aforementioned adjudication order was pending before the Customs, Excise and Service Tax Appellate Tribunal, Kolkata (CESTAT).

5. The case of the Petitioners throughout has been that for the purpose of Section 124 (2) FA, which applies to the SVLDR Scheme, it had already paid in excess of the amount shown as payable. In other words, it had paid already Rs.56,37,449/- as against Rs.51,62,527/- computed by the Department for the purposes of SVLDR Scheme. On the other hand, the Department treated only Rs.38,57,402/- as corresponding to the duty amount payable and the remaining Rs.17,80,047/- already deposited by the Petitioners was treated as being adjustable against ‘interest’ and therefore, not considered for the purposes of the pre-deposit required to be made by the Petitioners for the application under the SVLDRS to be considered.

6. The bone of contention, therefore, is on the interpretation of the expression ‘tax dues’ occurring in Section 124 (2) of the FA. A perusal of Section 123(1) of the FA reveals that the expression ‘tax dues’ has been defined as under: “123. For the purposes of the Scheme, “tax dues” means— (a) where— (i) a single appeal arising out of an order is pending as on the 30th day of June, 2019 before the appellate forum, the total amount of duty which is being disputed in the said appeal; (ii) more than one appeal arising out of an order, one by the declarant and the other being a departmental appeal, which are pending as on the 30th day of June, 2019 before the appellate forum, the sum of the amount of duty which is being disputed by the declarant in his appeal and the amount of duty being disputed in the departmental appeal: Provided that nothing contained in the above clauses shall be applicable where such an appeal has been heard finally on or before the 30th day of June, 2019. Illustration 1: The show cause notice to a declarant was for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. The order was for an amount of duty of Rs.1000 and amount of penalty of Rs.100. The declarant files an appeal against this order. The amount of duty which is being disputed is Rs.1000 and hence the tax dues are Rs.1000. Illustration 2: The show cause notice to a declarant was for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. The order was for an amount of duty of Rs.900 and penalty of Rs. 90. The declarant files an appeal against this order. The amount of duty which is being disputed is Rs. 900 and hence tax dues are Rs.900. Illustration 3: The show cause notice to a declarant was for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. The order was for an amount of duty of Rs. 900 and penalty of Rs. 90. The declarant files an appeal against this order of determination. The departmental appeal is for an amount of duty of Rs. 100 and penalty of Rs. 10. The amount of duty which is being disputed is Rs. 900 plus Rs. 100 i.e Rs. 1000 and hence tax dues are Rs. 1000. Illustration 4: The show cause notice to a declarant was for an amount of duty of Rs. 1000. The order was for an amount of duty of Rs.1000. The declarant files an appeal against this order of determination. The first appellate authority reduced the amount of duty to Rs. 900. The declarant files a second appeal. The amount of duty which is being disputed is Rs. 900 and hence tax dues are Rs. 900; (b) where a show cause notice under any of the indirect tax enactment has been received by the declarant on or before the 30th day of June, 2019, then, the amount of duty stated to be payable by the declarant in the said notice: Provided that if the said notice has been issued to the declarant and other persons making them jointly and severally liable for an amount, then, the amount indicated in the said notice as jointly and severally payable shall be taken to be the amount of duty payable by the declarant; (c) where an enquiry or investigation or audit is pending against the declarant, the amount of duty payable under any of the indirect tax enactment which has been quantified on or before the 30th day of June, 2019; (d) where the amount has been voluntarily disclosed by the declarant, then, the total amount of duty stated in the declaration; (e) where an amount in arrears relating to the declarant is due, the amount in arrears.”

7. It is thus seen that Section 123(a)(i) FA, which is relevant for the purposes of the present petition, refers to the “total amount of duty which is being disputed in the said appeal”. As far as the appeal before the CESTAT is concerned, the ‘total amount of duty’ was Rs.1,03,25,054/- and this admittedly included both the tax duties as well as interest payable thereon.

8. Mr. Ch. Satyajit Mishra, learned Senior Standing Counsel for the Department draws attention to Section 124 (1) (a) FA which reads as under: “124. (1) Subject to the conditions specified in sub- section (2), the relief available to a declarant under this Scheme shall be calculated as follows:— (a) where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on the 30th day of June, 2019, and if the amount of duty is,— (i) rupees fifty lakhs or less, then, seventy per cent of the tax dues; (ii) more than rupees fifty lakhs, then, fifty per cent. of the tax dues; (b) where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil, then, the entire amount of late fee or penalty; (c) where the tax dues are relatable to an amount in arrears and,— (i) the amount of duty is, rupees fifty lakhs or less, then, sixty per cent of the tax dues; (ii) the amount of duty is more than rupees fifty lakhs, then, forty per cent. of the tax dues; (iii) in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it and the duty amount indicated is,— (A) rupees fifty lakhs or less, then, sixty per cent. of the tax dues; (B) amount indicated is more than rupees fifty lakhs, then, forty per cent. of the tax dues; (d) where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before the 30th day of June, 2019 is— (i) rupees fifty lakhs or less, then, seventy per cent. of the tax dues; (ii) more than rupees fifty lakhs, then, fifty per cent. of the tax dues; (e) where the tax dues are payable on account of a voluntary disclosure by the declarant, then, no relief shall be available with respect to tax dues.”

9. Mr. Mishra emphasizes that in the present case the amount of duty involved was more than Rs.50 Lakhs, and therefore 50% of the amount of duty has to be paid. In his understanding the expression ‘duty’ and the expression ‘tax dues’ are interchangeable and mean the same thing.

10. The Court is unable to agree with the above submissions. When the legislature usages two different expressions viz., ‘duty’ and ‘tax dues’, it is obviously done with a purpose. If the intention was that these expressions are interchangeable then the wording of Section 124(1) (a) FA would read differently. The tax dues in the present case referred to not just the duty amount, but duty plus interest or to put differently the total amount of duty payable which would include the main duty component and the interest component. This explains why under Section 123(a)(i) FA while defining the expression ‘tax dues’, the legislature has referred to “the total amount of duty which has been disputed”.

11. What is disputed as far as the present case is concerned is the total amount of duty of Rs.1,03,25,054/- which obviously includes both the duty component as well as interest component.

12. In that view of the mater, the Court is unable to agree the stand taken by the Department in the present case that notwithstanding the Petitioners having deposited already Rs.56,37,449/- as ‘tax dues’ as defined under Section 123(a) of the FA i.e., duty plus interest, it has still to pay a further sum of Rs.13,05,125/- for its application under the SVLDR Scheme to be considered.

13. In that view of the matter, the impugned intimation dated 27th February, 2020 issued by the Joint Commissioner, GST & Central Excise Commissionerate, Bhubaneswar (Annexure-11) is hereby set aside and direction is issued to the Department to now take up for consideration the Petitioners’ application under the SVLDR Scheme without insisting on any further amount to be deposited by the Petitioners. The order on the Petitioners’ application be communicated to the Petitioners, after giving them a hearing on a date to be intimated to the Petitioners at least ten days in advance, within a period of three months from today.

14. The writ petition is disposed of in the above terms. Issue urgent certified copy of this order as per rules. Chief Justice (Dr. S. Muralidhar) Judge S.K. Guin (M.S. Raman)