Facts of the Case

Petitioners — Lokesh Pathak, M.P. Pathak (Through Legal Representatives), and Art N Glass India Pvt. Ltd. — challenged the refusal of the Respondent Designated Committee (SVLDRS), Central GST, Delhi West to issue discharge certificates under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) relating to legacy central excise demands.

The demands arose from Search & Seizure actions in November 2004 leading to a Show Cause Notice (SCN) dated 28.04.2005. The SCN included demands for duty, interest, penalties, confiscation of goods and imposition of redemption fines under the Central Excise Act, 1944.

Pursuant to adjudication and appeals, the matter was remanded by the CESTAT to the original authority for fresh adjudication and remained pending. The Petitioners filed declarations under the SVLDR Scheme seeking relief but were informed that cases involving seizure/confiscation and redemption fine were not eligible for relief. 

Issues Involved

  1. Whether the Petitioners were eligible under Section 124 and Section 125 of the SVLDR Scheme given that an appeal was filed before the CESTAT and remanded (not finally decided) before 30.06.2019.
  2. Whether redemption fine imposed in lieu of confiscation of goods is excluded from the relief under the SVLDR Scheme or is to be treated as penalty/duty for purposes of the Scheme. 

Petitioners’ Arguments

The SCN and associated dues including redemption fine were within the definition of “tax dues” and “amount in arrears” under Sections 121, 123 and 124 of the SVLDR Scheme.
 Since CESTAT did not decide finally on merits and remanded the matter, Petitioners were eligible under Section 125(1)(a).
Confiscation consequences and redemption fine cannot be treated as separately outside the relief framework; they are inherent consequences of excise duty non‑payment.
 Reliance on allied judgments from Gujarat High Court (Synpol Products), Allahabad High Court (M/s Jay Shree Industries) and other High Courts to treat redemption fine as part of penalty within the Scheme. 

Respondent’s Arguments

The Petitioners were ineligible under Section 125(1)(a) of the Scheme because an appeal before the appellate forum was heard and decided before 30.06.2019.
 Redemption fine for confiscated goods was excluded from relief since the Scheme only contemplates relief on duty, interest and penalty, not confiscation or redemption fine. 

Court’s Findings / Order

Eligibility: The Court held that since the CESTAT did not finally decide the appeal on merits and only remanded it for fresh adjudication, the Petitioners did not fall under the exclusion clause of Section 125(1)(a) of the SVLDR Scheme.
Redemption Fine Inclusion: Redemption fine is a consequence of non‑payment of excise duty and is not a separate category beyond the scope of duties, interest or penalties.
The Court accepted consistent High Court jurisprudence (Allahabad, Gujarat, Punjab & Haryana, Bombay) that redemption fine must be treated as part of the penalty/duty regime and cannot be excluded from SVLDR Scheme benefits.
Direction: Respondent Committee was directed to consider the declarants’ applications under the SVLDR Scheme and issue discharge certificates in accordance with law without requiring separate payment of redemption fine (subject to fulfillment of other conditions). 

IMPORTANT CLARIFICATIONS

Redemption fine is not an independent exclusion under SVLDR Scheme.
 Cases where appeal is remanded (not finally decided) are eligible under Section 125 of SVLDR.
 High Court relied on authoritative High Court precedents interpreting redemption fine within Scheme’s ambit.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/75408092025CW106222024_133516.pdf

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