1997 (8) TMI 520 - HC - Central Excise

Summary

Issues:
1. Challenge to the order calling for payment to secure release of duty paid stocks.
2. Justification for asking petitioner to pay for duty paid stock despite compounding the offence.
3. Interpretation of relevant sections of the A.P. Excise Act regarding liability for payment.
4. Analysis of provisions related to compounding of offences and release of seized property.
5. Effect of criminal case closure and discharge on the release of seized stocks.
6. Previous judgment directing refund of sale proceeds and its impact on the current case.

Issue 1:
The petitioner challenged an order demanding payment for the release of duty paid stocks in a writ petition, contending that the offence had been compounded. The petitioner argued that the authorities were not justified in asking for payment despite the compounding of the offence. The central question was whether the petitioner should be required to pay for the duty paid stock even after complying with the direction to pay the compounding fees.

Issue 2:
The authorities justified the demand for payment, stating that the petitioner, a license holder, had his license cancelled and appealed to compound the offence. The petitioner paid the compounding fee, and the stocks were released after furnishing a bank guarantee. The authorities asserted that the release was in compliance with a High Court order. However, the petitioner disputed the need to pay the full value of the duty paid stocks after compounding the offence.

Issue 3:
The court analyzed Section 45 of the A.P. Excise Act, which deals with the liability of items for confiscation. The court noted that the contraband material was still under seizure and had not been determined for confiscation. Thus, the provision could not support the demand for payment after the offence was compounded.

Issue 4:
The court examined Sections 47 and 47A of the Act concerning compounding of offences and release of seized property. It emphasized that the payment of the compounding fee was akin to compensation for the offence, preventing further proceedings. The court concluded that no additional conditions could be imposed on the petitioner for releasing the seized stocks.

Issue 5:
The petitioner highlighted the closure of a criminal case based on the compounding of offences by the Government. The court considered this fact and the discharge of the petitioner, emphasizing that the seized stocks should be released in favor of the petitioner.

Issue 6:
A previous judgment directed the authorities to refund the sale proceeds to the petitioner due to an acquittal in a criminal case. This judgment was cited to support the release of the seized stocks without requiring full payment.

The court allowed the writ petition, directing the immediate release of duty paid stocks to the petitioner without any further conditions or payment requirements.