Surya Metalloys (P) LTD. vs. Chief Commissioner, CGST And Central Excise Commissionerate

CW/3820/2020HC RajasthanGSTCNR RJHC02019352202003 March 2025Bench: AVNEESH JHINGAN,MANEESH SHARMA4 pages

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Facts

The petitioner, Surya Metalloys (P) Ltd., and its director, Abhay Agrawal, filed a writ petition challenging the rejection of their declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Their appeals concerning redemption fine, penalty for seizure of excess goods, and penalty on the director were pending before the Customs Excise and Service Tax Appellate Tribunal (CESTAT). The Designated Committee rejected their declaration in Form SVLDRS-1 dated 21.01.2020, on the ground that redemption fine was not covered under the scheme. The petitioner relied on a Bombay High Court decision in HP Adhesives Limited, which held that redemption fine is covered under the scheme and against which the Union of India's Special Leave to Appeal was dismissed by the Supreme Court.

Held

The Court held that the rejection of the petitioner's declaration in Form SVLDRS-1 dated 21.01.2020 by the respondent No.2 is set aside. The Court relied on the submission made by the respondent's counsel that the department has accepted the decision of the Bombay High Court in HP Adhesives Limited, which held that redemption fine is covered under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and that the SLP against the said decision was dismissed. The matter was remitted to the respondent to consider the declaration filed by the petitioners in accordance with law and proceed, subject to the fulfillment of other conditions of the scheme. The Court appreciated an expeditious attempt to deal with the issue.

Key Issues

1. Whether redemption fine is covered under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, as per Section 129 of the Finance Act, 2019? Petitioner's contention: The petitioner argued that redemption fine is covered under the scheme, relying on the Bombay High Court's decision in HP Adhesives Limited v. Union of India & Ors. They further submitted that the Bombay High Court's decision was based on the Gujarat High Court's ruling in Messrs Synpol Products Pvt. Ltd. v. Union of India, against which the Special Leave Petition (SLP) filed by the Union of India was dismissed. Respondent's contention: The respondent's counsel, after seeking instructions, fairly submitted that the department has not challenged the Bombay High Court's decision and has accepted it. No argument was recorded against the petitioner's submission.

Sections Cited

Section 129

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[2025:RJ-JP:9273-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 3820/2020 1. Surya Metalloys (P) Ltd., Having Its Registered Office At C-8/24, Sector 8, Rohini, New Delhi Having Central Excise Registered Premises At Sanod-Ramsar Road, Derathu, Nasirabad, Ajmer Through Its Authorised Representative Mr. Abhay Agarwal, S/o Shri Naresh Chand Patel, Aged 51 Years, R/0 21, Adarsh Nagar, Ajmer 2. Abhay Agrawal S/o Shri Naresh Chand Patel, Aged About 51 Years, R/0 21, Adarsh Nagar, Ajmer ----Petitioners Versus 1. Chief Commissioner, Cgst And Central Excise Commissionerate, Jaipur, Ncr Building, Statue Circle Jaipur 2. The Designated Committee, Under Sabka Vishwas Legacy Dispute Resolution Scheme, Jaipur Cgst And Central Excise Commissionerate, Jaipur Through Additional Commissioner, Gst And Central Excise, Jaipur, Ncr Building, Statue Circle Jaipur ----Respondents For Petitioner(s) : Mr. Sanjay Jhanwar, Sr. Adv. with Mr. Rahul Lakhwani & Mr. Aditya Sharma For Respondent(s) : Mr. Kinshuk Jain with Mr. Sourabh Jain HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMA

Order 03/03/2025 AVNEESH JHINGAN, J (ORAL):-

This petition is filed seeking quashing of Form SVLDRS-1 dated 21.01.2020 issued by respondent No.2. 2. The brief facts are that the petitioner-company was engaged in the business of manufacturing and trading of steel items.

[2025:RJ-JP:9273-DB] (2 of 4) [CW-3820/2020] Petitioner No.2 is the director of the company. The appeals of the petitioners were pending before the Customs Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as ‘CESTAT’) challenging the redemption fine, penalty for seizure of the excess goods and the penalty on the director. The petitioner filed declaration in Form SVLDRS-1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter referred to as ‘the Scheme’) introduced by Finance Act, 2019. The declaration was rejected vide letter dated 21.01.2020 on the ground that redemption fine was not covered under the scheme.

Learned counsel for the petitioner relied upon decision of the Bombay High Court in HP Adhesives Limited versus Union of India & Ors. reported in 2023: BHC-OS:1338-DB wherein following order was passed:- “1. The Petitioner had applied under the Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019 ("SVLDR Scheme") under the Finance Act, 2019. Yet declaration of the Petitioner was rejected on the ground that redemption fine is not covered under the provisions of SVLDR Scheme. When the petition came up on board on 23 January 2022, the following order was passed: "The learned Counsel for the [2025:RJ-JP:9273-DB] (3 of 4) [CW-3820/2020] distinguishable, reply affidavit will be filed before the next date.

Stand over to 20 February 2023."

Learned counsel for the Respondents states that instructions have been received that the department has not challenged this decision holding that the redemption fine is also covered under the scheme and has accepted this decision. In fact we are informed that Union of India had filed Special Leave to Appeal (C) No.449 of 2021 against the order passed which has been dismissed.

It is an admitted position that facts in the present case are identical to the case in Synpol Products Private Limited. The Petitioner is therefore entitled to succeed. The impugned rejection, of Petitioner's declaration by order dated 29 July 2021 is quashed and set aside. The Respondents- authorities will issue necessary discharge certificate under section 129 of the Finance Act to the Petitioner subject to fulfillment of other conditions as per the SVLDR Scheme.

Writ petition is accordingly disposed of in above terms.”

3.1.

It was submitted that Bombay High Court had relied upon decision of Gujarat High Court against which SLP was dismissed.

Learned counsel for respondent on 04.11.2024 sought time to have instructions as to whether department has accepted the decision of the Bombay High Court. On instructions fairly submits that no challenge was posed to the decision of Bombay High Court and the decision has been accepted.

In view of the above, the impugned rejection of Form SVLDRS-1 is set aside. The matter is remitted to the respondent to consider the declaration filed by the petitioners in accordance

[2025:RJ-JP:9273-DB] (4 of 4) [CW-3820/2020] with law and proceed subject to the fulfillment of the other conditions of the scheme by the petitioners.

It shall be appreciated if an expeditious attempt is made to deal with the issue.

The writ petition is allowed. (MANEESH SHARMA),J (AVNEESH JHINGAN),J Chandan/25 Reportable: No

Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.