M/S. SWAN MILLS LTD. versus UNION OF INDIA AND ORS.

Citation: [2007] 8 S.C.R. 531 · Decided: 26-07-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

' 
MIS. SWAN MILLS LTD. 
A 
::: 
."""' 
v. 
UNION OF INDIA AND ORS. 
JULY 26, 2007 
[DR. ARIJIT PASAY AT AND D.K. JAIN, JJ.] 
B 
.. 
:/... 
Central Excises Act, 1944: 
Kar Vivad Samadhan Scheme, 1998-Finance Act, 1998~ss.89, 
95(i)(c)-Jncome Tax Act, 1961-ss. 246 and 264-Demand notices-, c 
Confirmed by Commissioner (appeals)-Appeal to tribunal-Meanwhile KVSS; 
declaration filed by assessee-Rejection of, on the ground that appeal by 
assessee to Commissioner (appeals) was filed after limitation period and 
delay was not condoned hence assess"!ent had become final-Challenge 
against-Held: Tribunal had held that appeal was within time-That being D 
,,, 
so, appeal was to be treated as pending-Since KVSS was applicable to all 
~ 
pending matters, order of rejection of KVSS declaration is set aside. 
Kar Vivad Smadhan Scheme, 1998-0bject of-Discussed. 
The appdlant was served with show cause notices for recovery of E 
differential duty. Assistant Commissioner vide Order in original dated 
12.11.1997 confirmed the demands covered thereunder alongwith interest. 
Aggrieved appellant preferred appeal on 2.9.1998 before Commissioner 
(Appeals). The Commissioner (Appeals) confirmed the demand notices. 
In 1998, KVSS scheme was introduced which provided for settling tax : F 
--->r 
arrears by paying 50% of disputed tax arrears. Appellant filed declaration I 
under s. 89 of Finance Act, 1998 on 31.12.1998 for seeking the benefit of 
KVSS Scheme. This declaration was rejected on 25.2.1999 on the ground 
that appeal was filed by appellant before Commissioner (Appeals) after 
limitation period for filing appeal had already expired and the delay in filing G 
' 
appeal was not condoned by the Commissioner (Appeals). Appellants preferred 
appeal before CEGA T. On 29.11.1999, CEGAT held that appeal before 
Commissioner (Appeals) was within time and thus remanded the matter for 
I 
fresh disposal. 
531 
H 
532 
SUPREME COURT REPORTS 
[2007) 8 S.C.R. 
A 
The Commissioner (Appeals) vide order dated 29.6.2001 upheld the 
B 
c 
D 
E 
F 
G 
order in original dated 12.11.1997. On 2.4.2001 appellant filed appeal before 
Commissioner (Appeals) for reconsideration of earlier order dated 25.2.1999 
whereby declaration under s.· 89 of Finance Act was rejected and for giving 
the benefit of KVSS Scheme. 
The Superintendent of Central Excise on 18.1.2002 informed the 
appellant that application under s. 89 was re-examined and since KVSS 
Scheme no longer existed, question of accepting the application does not arise. 
Appellants made an applieation dated 5.2.:2002 to Chief Commissioner 
for direction to Commissioner to look into appellants' request for KVSS 
scheme .. The demand was confirmed by the dismissal of appeal by 
Commissioner (Appeals) on 29.6.2001. Thereafter appellant deposited the 
entire duty and penalty on 7.10.2004. On 3.11.2004, the Superintendent asked 
I 
appellant to pay interest und~r s.l lAA of Central Excises Act, 1944 for 
delayed payment of duty. Appellant did not make the payment inspite of repeated 
letters for interest by the depar~ment. Thereafter appellant sent letter to 
Commissioner for reconsideration of the matter. Commissioner informed 
appelh1nt that benefit of KVSS cannot be extended as the scheme no longer 
existed. Appellant filed writ petition before High Court seeking acceptance 
of declaration under s. 89 of Finance Act. The High Court held that since 
appeal was filed after limitation period, appellant was not entitled to get the 
benefit of KVSS. Hence the present appeal .. 
Allowing the appeal, the Court 
HELD: 1.1. The object of KVSS Scheme was to put an end to all pending 
matters in the form of appeals, refer;ences, revisions and writ petitions under 
the IT Act/WT Acts. 95(i)(c) of the Scheme _was different from appeals under 
s.246, revisions under s: 264, appeals under s. 260-A, etc. of the IT Act and 
similar provisions under the WT Act. Under the IT Act, there is a difference 
between appeals, revisions and references. However; those differences were 
obliterated and appeals, revisions and references were put on par under s. 
95(i)(c) of the Scheme. The object behinds. 95(i)(c) in putting on par appeals, 
references and revisions was to put an end to litigation in various forms and 
at various stages under the IT Act/Wealth Tax Act and, therefore, the rulings 
on the scope of appeals and revisions under the rt .Act or on Voluntary 
Disclosure Scheme, will not apply to this case. (Para 17] (537-F-H;

Excerpt shown. Read the full judgment & AI analysis in Lexace.