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Rejection under amnesty

R.C.Jain and Associates (Member) (134 Points)

18 June 2013

Dear All,

I wish to know the following in connection with Amnesty:

1.When can the Designated Authorty reject an application under Amnesty under the clause of enquiry or audit? Can he do so even after the payments of all the dues have been made? Similarly, till when can ineligibility be proved?

2. If rejection can take place after payment, and is so rejected, will one get immunity from interest and penalty due to full payment of dues?

3.If one does not get the immunity, can the amount paid (not liable to be refunded as per provisions of Amnesty) be claimed as an adjustment towards the total amount to be paid alongwith interest?

Kindly provide your valuable guidance. I have attached the scheme of Amnesty for your perusal.

Thanking you in anticipation.

Regards,

Samiksha Jain

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7 Replies

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 18 June 2013

1.If the rejection officer has a reason to believe that information provided by the applicant is false...then designated officer can reject the application and can initiate such actions against the applicant as is necessary to protect the revenue...but here the officer should be in possession of sound evidence that the applicant is providing false info.....

2. Rejection can be there even after due payt of declared taxes....but on the only ground of applicant's false disclosures...in that case applicant to be punished as much as it possible and NO IMMUNITY.

3. your 3rd query not clear...pls clarify...

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R.C.Jain and Associates (Member) (134 Points)
Replied 18 June 2013

Thank you Sir for your reply.

I blieve you have misunderstood the query. My 1st and 2nd query is on rejection of declaration where I am principally ineligible due to a pending enquiry or notice.

What you have advised about is the quantum of true disclosure which can be questioned by the Commisioner of Central Excise, in case of false declaration.

My third query is that suppose I have filed a declaration and paid all of the dues, and persuant to that my declaration is rejected ( assuming rejection can take place after payment of dues),

1. Will I be granted immunity for the amount paid under the following rule :

98. (1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon

payment of the tax dues declared by him under sub-section (1) of section 97 and the interest payable

under the proviso to sub-section (4) thereof, shall get immunity from penalty, interest or any other proceeding under the Chapter.

2. Will I not be granted immunity because I was not eligible at all, and as per the following rule,

Any amount paid in pursuance of a declaration made under sub-section (1) of section 97 shall

not be refundable under any circumstances.

The amount paid will not be adjusted towards the amount I will now be liable to pay alongwith interest and penalty under normal provisions.

R.C.Jain and Associates (Member) (134 Points)
Replied 18 June 2013

Also, in my view, once all the dues are paid, rejection by Commisioner of Central Excise will not lead to unlimited punsihment. Sec 98 will apply and thus, immunity will be granted from all interest, penalty and proceedings under the Chapter.

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 18 June 2013

Originally posted by : Queryall

My third query is that suppose I have filed a declaration and paid all of the dues, and persuant to that my declaration is rejected ( assuming rejection can take place after payment of dues),

1. Will I be granted immunity for the amount paid under the following rule :

98. (1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon

payment of the tax dues declared by him under sub-section (1) of section 97 and the interest payable

under the proviso to sub-section (4) thereof, shall get immunity from penalty, interest or any other proceeding under the Chapter.

Or

2. Will I not be granted immunity because I was not eligible at all, and as per the following rule,

Any amount paid in pursuance of a declaration made under sub-section (1) of section 97 shall

not be refundable under any circumstances.

The amount paid will not be adjusted towards the amount I will now be liable to pay alongwith interest and penalty under normal provisions.

If you have paid all the taxes then you will get 'no dues' certif in VCES-3 which is a conclusive evidence that applicant has paid dure taxes and everything in relation to past dues shall stand concluded and the case cannot be reopened later on unless the Comissioner has a reason to beleive that earlier declaration was false....so if case re-opened as such, then immunity provided earlier may be withdrawn....

Nirav Worah (CHARTERED ACCOUNTANT) (396 Points)
Replied 19 June 2013

Point wise reply to your query:-

1. Yes, the designated authority can do so even if payment has been made.As per section section 101(3) no action can be taken after lapse of one year from the date of declaration. After one year it will be time barred.

2.If rejection has been made then no immunity can be granted from payment of interest and penalty.

3.Amount paid under VCES can be adjusted if it has been rejected by the designated authority.

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R.C.Jain and Associates (Member) (134 Points)
Replied 19 June 2013

Dear Nirav and Saurabh,

I guess there is some misunderstanding. The rejection that I am referring to is the rejection as per cluase 96(2) under ineligibility and not under clause 101 due to liability being other than true liability.

Please guide.

Thanks and regards,

Samiksha Jain