Raj Steel And Ferro Alloys Private Limited Through Its Director Sri Vijay Kumar Agarwal vs. Central GST And Central Excise Department Through Its Commissioner

Facts

The petitioner, Raj Steel & Ferro Alloys Private Limited, along with its directors, was issued a show-cause notice by the Commissioner, Central Excise and Service Tax, Ranchi, proposing recovery of CENVAT credit and education cess totaling Rs. 22,27,500/- and Rs. 72,135/-, along with interest and penalties. The Additional Commissioner, Central Excise and Service Tax, Ranchi, passed an order on August 12, 2009, disallowing CENVAT credit and education cess amounting to Rs. 22,27,500/- and Rs. 72,135/-, confirming recovery of interest, and imposing penalties totaling Rs. 22,99,635/- on the company and Rs. 22,99,635/- on each of the five directors. The appellate authority and the CESTAT dismissed the appeals. Subsequently, the petitioner availed the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, declaring a total amount of Rs. 22,99,635/-. The petitioner sought relief of tax dues to the extent of Rs. 4,29,854/-, based on pre-deposits of Rs. 12,25,000/-. However, the Department computed the tax liability under the scheme as Rs. 9,19,854/-. The petitioner approached the High Court challenging this determination and the upholding of the determination by the Designated Committee.

Held

The Court held that the writ petition lacked merit and was accordingly dismissed. The Court agreed with the respondents' contention that once a demand of Rs. 22,99,635/- had attained finality up to the Tribunal stage, there was no scope for considering the petitioner's grievance regarding the adjustment of any amount that might have been deposited prior to the demand. The Court noted that the petitioner themselves had availed of the Sabka Vishwas Scheme by declaring the total amount of Rs. 22,99,635/- as due, and it was not open for them to raise further grievances regarding outstanding dues thereafter. The Court found no scope for entering into the calculations arrived at by the respondent department under Article 226 of the Constitution of India, especially when the demand had attained finality and the petitioner was expected to go strictly by the scheme's provisions. Therefore, the determination of tax dues by the respondent authorities was upheld.

Key Issues

1. Whether the determination of tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, by the respondent authorities, which did not account for the pre-deposits made by the petitioner, is legally sustainable? (Question of law) Petitioner's arguments: The petitioner contended that the respondent authorities erred by not considering the amount of Rs. 12,25,000/- already deposited by them. They argued that based on this deposit, their liability under the scheme should be calculated as 40% of the remaining amount (Rs. 22,99,635/- minus Rs. 12,25,000/-), which amounts to Rs. 4,29,854/-. They relied on their representation dated February 27, 2020, detailing this calculation. Respondent's arguments: The respondents argued that the grievance raised against the petitioner had attained finality up to the Tribunal stage. They asserted that the petitioner had to strictly adhere to the provisions of the Sabka Vishwas Scheme and that there was no scope for adjusting amounts already deposited prior to the demand, as the scheme was availed based on the final demand of Rs. 22,99,635/-. They contended that accepting the petitioner's argument would amount to interfering with a final order.