2011 (2) TMI 47 - HC - Central Excise

Search and Seizure - It is also stated that cash of66,05,000/- was recovered from the residence of the petitioner and on enquiry at the time of search, it was stated that the cash was related to the factory account and was kept in the house for safety reasons - The petitioner was not able to explain the source of cash recovered from his residence - Accordingly, it is submitted that the seizure is justified - The petitioner on the other hand contends the cash recovered pertains to transaction relating to sale of an immovable property with a third person Sanjay Singhal. Reliance is placed on purported documents. These all are disputed questions of fact which have to be gone into and examined during the course of the adjudication proceedings under the Central Excise Act, 1944. Various aspects including statements recorded, books of accounts and other material available is required to be examined and gone into. - Petitioner has to await the adjudication/appellate proceedings.

Summary

Issues:
1. Seizure of cash during search proceedings under Central Excise Act and Customs Act.
2. Allegations of evasion of central excise duty against the petitioner.
3. Dispute regarding the source of the cash recovered.
4. Appeal filed before the Custom, Excise & Service Tax Appellate Tribunal.

Analysis:

1. The petitioner, who is the Managing Director of a company, sought mandamus for the release of cash seized during search proceedings under the Central Excise Act and Customs Act. The allegations against the company included under valuation, suppression of production, and removal of goods without paying central excise duty. Cash was recovered from the petitioner's residence, and the petitioner failed to explain its source, leading to the justification of the seizure.

2. The petitioner contended that the recovered cash was related to a property transaction with a third party, supported by disputed documents. These factual disputes needed examination during the adjudication proceedings under the Central Excise Act. An appeal was filed before the Custom, Excise & Service Tax Appellate Tribunal, which granted a stay on further recovery pending appeal, considering the cash already seized.

3. The Court, considering the ongoing adjudication and appellate proceedings, declined to grant the petitioner's request at that stage. The petitioner was directed to await the outcome of the pending proceedings where various aspects, including statements, accounts, and evidence, would be examined and determined.

4. The judgment concluded by disposing of the petition with the observation that the petitioner must await the resolution of the adjudication and appellate processes. No costs were awarded in this matter.