Rajasthan High Court – Jaipur
M/S Premier Bars Private Limited vs Union Of India on 18 July, 2026
[2026:RJ-JP:27252-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Civil Writ Petition No. 630/2021
URN: CW / 1776U / 2021
M/s Premier Bars Private Limited, (CIN- U27104RJ2004PLC018869)
Through Its Director, Having Registered Office at 402, 4th Floor, Nidhi
Kamal Tower, Ajmer Road, Jaipur (Rajasthan).
----Petitioner
Versus
1. Union Of India, Through Secretary, Minister Of Finance,
Department Of Revenue, Room No. 46, North Block, New
Delhi.
2. The Deputy Commissioner, Central Goods And Service Tax,
Division-F, Sector-10, Vidhyadhar Nagar, Jaipur (Rajasthan)
3. The Assistant Commissioner (Audit), Central Goods And
Service Tax, Division-I, Sector-10, Vidhyadhar Nagar, Jaipur.
4. The Superintendent, Central Goods And Service Tax, GST
Range-XXVIII, Sector-10, Vidhyadhar Nagar, Jaipur
(Rajasthan)
5. The Principal Commissioner, Central Goods And Service Tax
And Central Excise, NCR Building, C-Scheme, Jaipur
(Rajasthan)
----Respondents
For Petitioner(s) : Mr. Prateek Gattani, Adv. through VC
Mr. Vikas Kabra, Adv.
For Respondent(s) : Mr. Kinshuk Jain, Sr. Standing Counsel
Ms. Mahi Yadav, AAG with
Ms. Chelsi Agarwal, Adv.
Mr. Kuldeep Singh Rathore, Adv.
HON’BLE MR. JUSTICE ARUN MONGA
HON’BLE MR. JUSTICE MANEESH SHARMA
Order
1. Date of conclusion of Arguments 13.07.2026
2. Date on which the order was reserved 13.07.2026
3. Whether the full order or only operative part is Full
pronounced
4. Date of pronouncement 18.07.2026
REPORTABLE
Per: Maneesh Sharma,J
1. The petitioner is before this Court, inter alia, challenging the order
dated 12.11.2019 passed by the Designated Committee, whereby the
petitioner’s SVLDR-01 form/declaration filed under the Sabka Vishwas
(Legacy Dispute Resolution) Scheme Rules, 2019 was rejected.
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FACTUAL MATRIX
2. The facts giving rise to the present petition, briefly stated, are
that the petitioner, a Private Limited Company engaged in the
manufacture of reinforcement steel (TMT Bars, PVC and Steel Pipes),
Tubular Poles, Pre-cast concrete, Real Estate construction and safety
products, is registered with the respondents under the Central Excise
Act, 1944.
2.1. By Order-in-Original dated 30.03.2017, respondent No. 3 directed
confiscation of 291.218 MT of MS Ingots, valued at Rs. 78,62,886/-,
while granting the petitioner an option to redeem the goods on payment
of a redemption fine of Rs. 10,00,000/- in lieu of confiscation. A penalty
of Rs. 3,00,000/- was also imposed upon the petitioner by the said
order.
2.2. Aggrieved thereby, the petitioner preferred an appeal before the
learned Commissioner (Appeals), Jaipur, wherein the learned
Commissioner, vide Order-in-Appeal No. 29(RK)CE/JPR/2017-18 dated
16.02.2018, affirmed the Order-in-Original and dismissed the appeal of
the petitioner.
3. Aggrieved by the aforesaid dismissal, the petitioner preferred a
second appeal under Section 35B of the Central Excise Act, 1944,
before the learned CESTAT, New Delhi, assailing the Order-in-Appeal
dated 16.02.2018.
3.1. During the pendency of the said appeal, the Sabka Vishwas
(Legacy Dispute Resolution) Scheme, 2019, was introduced by
respondent No. 1 for resolution and settlement of legacy
disputes/arrears pertaining to Central Excise and Service Tax, of which
the petitioner became aware.
3.2. Accordingly, invoking the provisions of the Sabka Vishwas (Legacy
Dispute Resolution) Scheme, 2019, read with Section 129 of the
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Finance (No. 2) Act, 2019, the petitioner sought settlement of the
arrears arising from the Order-in-Original dated 30.03.2017.
3.3. The Designated Committee, however, by order dated 12.11.2019,
rejected the declaration on the ground that a redemption fine does not
fall within the scope of the Scheme of 2019, rendering the petitioner
ineligible.
4. Hence, the instant writ petition.
SUBMISSIONS ON BEHALF OF THE PETITIONER
5. Learned counsel for the petitioner particularly submits that:
(a) The Designated Committee arbitrarily rejected the
petitioner’s declaration on the very date of its filing, without
granting the petitioner an opportunity of hearing.
(b) The rejection, premised on the ground that redemption fine
falls outside the ambit of the SVLDR Scheme, 2019, is
untenable and contrary to Section 125 of the Finance (No.
2) Act, 2019, inasmuch as the categories of persons
rendered ineligible under that provision do not extend to
cases involving confiscation of goods or redemption fine.
(c) The underlying object of the SVLDR Scheme, 2019, is to
grant a measure of amnesty by affording taxpayers an
opportunity to discharge outstanding tax dues and thereby
stand absolved of further consequences in law.
(d) Lastly, the rejection of petitioner’s declaration is contrary to
the decision of the Gujarat High Court in M/s Synpol
Products Pvt. Ltd. v. Union of India1, wherein an
identical controversy was considered and it was held that
assessees who have been asked to pay a redemption fine in
lieu of confiscation of goods are eligible to file declarations
under the Scheme of 2019.
5.1. It was prayed, inter alia, that in light of the aforementioned
judgment, the impugned order of rejection be set aside and the
declaration of the petitioner be treated as eligible.
1 2020 (374) ELT 851 (Guj.)
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SUBMISSIONS ON BEHALF OF THE RESPONDENT
6. Per Contra learned counsel for the respondents, while supporting
the impugned order of rejection particularly submits that:
(a) the Designated Committee acted strictly in conformity with
the provisions of the SVLDR Scheme, 2019.
(b) The Central Board of Indirect Taxes & Customs, vide letter
dated 20.12.2019, has clarified that the expression ‘fine’
under the Scheme is to be construed with reference to
Section 9 of the Central Excise Act, 1944, and not Section
34 thereof, so as to include a redemption fine.
6.1. It was prayed that the present writ petition be dismissed.
7. In the aforesaid backdrop, we have heard the rival contentions of
the learned counsel representing the respective parties and have
examined the material available on record, including the judgment cited
before us.
8. From a bare perusal of the record, it is evident that the petitioner
had filed a declaration in terms of the SVLDR Scheme, 2019, which
came to be rejected on 12.11.2019 on the “Ground of Ineligibility”, with
a remark stating “RF not covered under the SVLDRS”.
ANALYSIS AND FINDINGS
9. The limited question that falls for our consideration, therefore, is
whether a redemption fine imposed in lieu of confiscation of goods is
covered under the SVLDR Scheme, 2019.
10. The record also reveals that Section 125 of the Finance (No. 2)
Act, 2019, enumerates the categories of persons excluded from making
a declaration under the Scheme; the said provision is reproduced as
under:
“Section 125 – Declaration under Scheme
(1) All persons shall be eligible to make a declaration under
this Scheme except the following, namely:-
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(a) who have filed an appeal before the appellate
forum and such appeal has been heard finally on or
before the 30th day of June, 2019;
(b) who have been convicted for any offence
punishable under any provision of the indirect tax
enactment for the matter for which he intends to file
a declaration;
(c) who have been issued a show cause notice,
under indirect tax enactment and the final hearing
has taken place on or before the 30th day of June,
2019;
(d) who have been issued a show cause notice under
indirect tax enactment for an erroneous refund or
refund;
(e) who have been subjected to an enquiry or
investigation or audit and the amount of duty
involved in the said enquiry or investigation or audit
has not been quantified on or before the 30th day of
June, 2019;
(f) a person making a voluntary disclosure,-
(i) after being subjected to any enquiry or
investigation or audit; or
(ii) having filed a return under the indirect
tax enactment, wherein he has indicated
an amount of duty as payable, but has not
paid it;
(g) who have filed an application in the Settlement
Commission for settlement of a case;
(h) persons seeking to make declarations with
respect to excisable goods set forth in the Fourth
Schedule to the Central Excise Act, 1944 (1 of
1944).
(2) A declaration under sub-section (1) shall be made in such
electronic form as may be prescribed.”
11. A bare reading of the above provision makes it rather clear that
cases involving confiscation of goods or a redemption fine are not
excluded from filing a declaration under the provisions of the SVLDR
Scheme, 2019. Therefore, persons who have been asked to pay a
redemption fine in lieu of confiscation of goods cannot, on that ground
alone, be treated as ineligible to file a declaration under the Scheme of
2019.
12. Further, in the matter of Synpol Products Pvt. Ltd. (supra), the
Gujarat High Court was seized of a similar controversy. While also
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considering the letter dated 20.12.2019 issued by the Central Board of
Indirect Taxes & Customs, the Court examined whether a redemption
fine is covered under the SVLDR Scheme, 2019, or not. The Court has
unequivocally held therein that a redemption fine is covered under the
SVLDR Scheme, 2019, and thus, assessees who have been asked to pay
a redemption fine in lieu of confiscation of goods are eligible to file
declarations in terms of the Scheme of 2019 and allowed the petition
bearing SCA No. 21744/2019, vide order dated 27.02.2020.
13. The relevant portion of the said judgment is reproduced as under:
“9.5. In view of the above provisions of the Scheme r/w. flyers,
FAQs and press note issued by the Board, the intent and
purpose of the Scheme appears to reduce litigation by giving a
window to the taxpayers to pay the tax and end the litigation.
The object of the Scheme was to provide one time measure for
putting an end to past disputes of central excise and service
tax and to provide the opportunity of voluntary disclosure to
non-complying taxpayers. Section 121(c) of the Scheme
defines the ‘amount in arrears’ which means the amount of
duty which is recoverable as arrears of duty under the indirect
tax enactment, on account of adjudication by the competent
authority or on account of admitted tax liability but not paid.
Section 121(h) of the Scheme provides that ‘declarant’ means
a person who is eligible to make a declaration and files such
declaration under Section 125.
9.6. Section 121(i) of the Scheme provides that ‘declaration’
means the declaration filed under Section 125. Section 122 of
the Scheme provides the list of all indirect tax enactments to
which the Scheme applies, whereas, Section 123 provides as to
what would comprise of tax dues. More particularly, Section
123(b) provides that, 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
would be tax dues. Section 124 provides for relief available
under the Scheme with regard to payment of tax dues to the
effect that 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 rupees fifty lakhs or less, then, seventy per cent of
the tax dues would be waived and if the amount of duty is
more than rupees fifty lakhs, then fifty per cent of the tax dues
would be waived subject to the conditions specified in sub-
section (2) which prescribes for pre-deposit for taking into
consideration the pre-deposit made by the taxpayers.
9.7. Section 125 of the Scheme provides for ‘declaration under
scheme’ and excludes certain categories of persons who are
not eligible to make a declaration under the Scheme as per
clauses (a) to (h). On perusal of the clauses (a) to (h) of sub-
section (1) of Section 125 does not include the case involving
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Section 34 of the Central Excise Act, 1944 would make such
person eligible to file a declaration under the Scheme. Such
persons cannot be considered as ineligible under clauses (a) to
(h) of sub-section (1) of Section 125 of the Scheme. The
designated committee appointed under the Scheme has to
verify the declaration made by the declarant under Section 125
of the Scheme and issue a statement under Section 127 of the
Scheme stating that the amount estimated to be payable by
the declarant, as estimated by the designated committee,
equals the amount declared by the declarant. However, in the
facts of the present case, the designated committee has
rejected the declaration itself on the ground that the Scheme
does not apply to the cases involving confiscation/redemption
fine.
9.8. Section 129(1) of the Scheme provides for issue of
discharge certificate under Section 126 with respect to the
amount payable under this Scheme shall be conclusive as to
the matter and time period stated therein and provides
immunity to the declarant from payment of any further duty,
penalty or interest and prosecution and reopening of the
matter in any other proceedings under the indirect tax
enactments. Clause (a) of sub-section (1) of Section 129 of the
Scheme though provides that the declarant shall not be liable
to pay any further duty, interest, or penalty, it does not
expressly provide that the declarant shall not be liable to pay
fine/redemption fine, and therefore, the controversy has
arisen, as in the present proceedings, as to whether the
Scheme is applicable to the cases involving
confiscation/redemption fine or not.
9.9. Though, there is no express provision in the Scheme with
regard to providing immunity from payment of fine, the
respondent authorities have specifically stated in FAQs, press
notes and flyers that the Scheme provides for full waiver of
interest, fine and penalty. In the facts of the case, there in no
other fine which is envisaged under the indirect tax enactment.
At this juncture, the contention raised on behalf of the
respondents that the fine would mean the fine to be levied by
the competent Court under Section 9 of the Central Excise Act
and not fine as referred to be the redemption fine under
Section 34 of the Act cannot be accepted considering overall
intent and object of the Scheme, and we therefore, concur with
the prima facie opinion of the Coordinate Bench expressed in
para 10 of the order dated 24-12-2019 which reads thus:
“10. Thus, in terms of the FAQs, press notes and
flyers issued by the Board, the Scheme provides
substantial relief in the tax dues for all categories of
cases as well as full waiver of interest, fine and
penalty. Thus, having regard to the fact that: (i)
Section 125 of the Finance Act says that all persons
shall be eligible to make declaration under the
Scheme except for the categories specifically
enumerated therein; and (ii) under Section 125 of
the Finance Act, cases involving confiscation and fine
in lieu of confiscation (redemption fine) are not
excluded from the benefit of the Scheme, and (iii)
according to the Board, the Scheme provides relief in
tax dues for all categories of cases; prima facie it
appears that the legislature did not have the
intention of excluding cases involving confiscation
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and fine in lieu of confiscation from the purview of
the Scheme.”
9.10. With regard to the clarification issued by the respondent
Board in communication dated 20-12-2019 is also contrary to
the intent and object of the Scheme which is discussed at
length in paras 11 and 12 of the order dated 24-12-2019
passed by the Coordinate Bench of this Court, and we
therefore concur on such prima facie opinion. Paras 11 and 12
of the order dated 24-12-2019 read thus:
“11. It may be further noted that in the
communication dated 20th December, 2019 of the
Board, the contents whereof have been reproduced
hereinabove, it has been stated that when a person
gets immunity from prosecution, he also gets waiver
of such fine for the offences under Section 9 of the
Central Excise Act, 1944. Thus, it is not the case of
the Board that the Scheme does not provide for
waiver of fine, but only that it does not provide for
waiver of redemption fine. Testing the explanation
put forth by the Board in the context of the relevant
statutory provisions, Section 9 of the Central Excise
Act, 1944 specifies the categories of offences and
the punishment thereunder, which may be
punishable with imprisonment and fine or
imprisonment or fine. Thus, the question of imposing
fine arises only upon conviction for an offence
specified in Section 9 of the Central Excise Act.
However, clause (b) of Section 125 of the Finance
Act, clearly excludes persons who have been
convicted for any offence punishable under any
provision of the indirect tax enactment for the
matter for which he intends to file declaration. As a
necessary corollary therefore, it follows that the
legislature would not have contemplated waiver of
fine under Section 9 of the Central Excise Act, 1944.
The only other fine envisaged under the Central
Excise Act, 1944 is fine in lieu of
confiscation/redemption fine. Under the
circumstances, when the Board has issued FAQs,
press notes and flyers stating that the Scheme
grants waiver of interest, penalty and fine, it appears
that the same would be relatable to redemption fine,
inasmuch as, it is the only other fine contemplated
under the Act. Besides, as noticed earlier, persons
whose cases involve confiscation/fine in lieu of
confiscation are not placed in the categories of
persons enumerated in Section 125 of the Finance
Act, who are not eligible to file declarations
thereunder.
12. By the communication dated 20th December,
2019, the Board has stated that in case where
redemption fine has been imposed and quantified,
the discharge certificate can be issued only after
settlement of redemption fine, namely payment of
redemption fine. Therefore, it is not the case of the
Board that declarations involving redemption fine
cannot be accepted. This court, however, is prima
facie of the view that the stand of the Board that in
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consonance with the Scheme which contemplates
putting an end to the matter.”
10. In view of the above facts and situation, when the
respondents had issued show cause notice demanding excise
duty together with confiscation of the goods in terms of Rule
25(a) and (d) of the Central Excise Rules, 2002 and
redemption fine in lieu of confiscation under Rules 25 as goods
were not available for confiscation, it is clear that by issuing
the show cause notice, the respondent has invoked Rule 25 of
the Central Excise Rules, 2002 for levy of redemption fine in
lieu of confiscation as goods which were sought to be
confiscated were not available for confiscation. Therefore, the
levy of the redemption fine equivalent to demand of central
excise duty under Rule 25 of the Central Excise Rules, 2002
would be an amount in arrears as defined in Section 121(c) of
the Scheme along with the amount of duty which is
recoverable as arrears of duty under indirect tax enactment.
Therefore, the test which is required to be applied to ascertain
what is the amount in arrears as per the Scheme, it would
include both the amount of duty as well as amount of
redemption fine which is required to be recovered from the
taxpayers. The amount of redemption fine cannot be treated
separately then the amount of the duty under the Scheme.
Therefore, the interpretation made by the Board in the
communication dated 20-12-2019 in order to consider the
declaration made by the declarant, the payment of redemption
fine is prerequisite, is not tenable in law, because as per
Section 125 of the Scheme a declarant cannot be made
ineligible to file a declaration for non-payment of redemption
fine. Moreover, the declarant is required to include redemption
fine as part of the duty demanded, so as to calculate the
amount in arrears as per Section 121(c) of the Scheme.
11. It may be further noted that in the communication dated
20th December, 2019 of the Board, the contents whereof have
been reproduced hereinabove, it has been stated that when a
person gets immunity from prosecution, he also gets waiver of
such fine for the offences under Section 9 of the Central Excise
Act, 1944. Thus, it is not the case of the Board that the
Scheme does not provide for waiver of fine, but only that it
does not provide for waiver of redemption fine. Testing the
explanation put forth by the Board in the context of the
relevant statutory provisions, Section 9 of the Central Excise
Act, 1944 specifies the categories of offences and the
punishment thereunder, which may be punishable with
imprisonment and fine or imprisonment or fine. Thus, the
question of imposing fine arises only upon conviction for an
offence specified in Section 9 of the Central Excise Act.
However, clause (b) of Section 125 of the Finance Act, clearly
excludes persons who have been convicted for any offence
punishable under any provision of the indirect tax enactment
for the matter for which he intends to file declaration. As a
necessary corollary therefore, it follows that the legislature
would not have contemplated waiver of fine under Section 9 of
the Central Excise Act, 1944. The only other fine envisaged
under the Central Excise Act, 1944 is fine in lieu of
confiscation/redemption fine. Under the circumstances, when
the Board has issued FAQs, press notes and flyers stating that
the Scheme grants waiver of interest, penalty and fine, it
appears that the same would be relatable to redemption fine,
inasmuch as, it is the only other fine contemplated under the
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Act. Besides, as noticed earlier, persons whose cases involve
confiscation/fine in lieu of confiscation are not placed in the
categories of persons enumerated in Section 125 of the
Finance Act, who are not eligible to file declarations
thereunder.
12. By the communication dated 20th December, 2019, the
Board has stated that in case where redemption fine has been
imposed and quantified, the discharge certificate can be issued
only after settlement of redemption fine, namely payment of
redemption fine. Therefore, it is not the case of the Board that
declarations involving redemption fine cannot be accepted.
This court, however, is prima facie of the view that the stand
of the Board that in case where redemption fine is imposed and
quantified, discharge certificate can only be issued after
settlement of redemption fine, is not in consonance with the
Scheme which contemplates putting an end to the matter.”
14. On being queried whether the aforesaid judgment had been
challenged, learned counsel for the respondents answered in the
affirmative.
15. Upon further verification, it emerged that the respondent
Department had preferred a Special Leave to Appeal (C) against the
aforesaid judgment, which was dismissed by the Hon’ble Apex Court
vide order dated 03.03.2021 in Special Leave to Appeal (C)
No.449/2021.
CONCLUSION
16. We find ourselves in complete agreement with the view taken by
the Gujarat High Court. The levy of a redemption fine in lieu of
confiscation of goods forms part of the amount of duty which is
recoverable under the indirect tax enactment, and the same cannot be
segregated from the demand of duty for the purposes of the SVLDR
Scheme, 2019.
17. The submissions advanced on behalf of the respondents as well as
the interpretation sought to be placed on the basis of the letter dated
20.12.2019, so as to exclude a redemption fine from the ambit of the
Scheme, are contrary to the provisions of the Finance (No. 2) Act,
2019, therefore, do not merit acceptance.
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18. Since cases involving a redemption fine are not excluded under
Section 125 of the Act of 2019, the petitioner could not have been
declared ineligible merely on the ground that the declaration included a
redemption fine. The impugned order dated 12.11.2019 rejecting the
petitioner’s declaration, therefore, deserves to be quashed and set
aside.
19. The upshot of foregoing discussion, therefore, is that:
a) the impugned order dated 12.11.2019 (Annexure-8) is set
aside;
b) the respondent department is directed to treat the
declaration of the petitioner dated 12.11.2019 in Form
SVLDR-1 (Annexure-5) as an eligible declaration;
c) the respondent department is directed to consider the
declaration of the petitioner, dated 12.11.2019 in Form
SVLDR-1 (Annexure-5), on merits and in accordance with
law, more particularly the SVLDR Scheme, 2019, and rules
made thereunder.
20. Accordingly, the present writ petition succeeds, with the aforesaid
directions.
21. All other pending applications, if any, shall stand disposed of.
(MANEESH SHARMA),J (ARUN MONGA),J
63/Ashwani-Prashant
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