2017 (5) TMI 770 - HC - Central Excise

Forced Recovery/collection of undated cheques from parties - evasion of duty - Held that - The Court would like to know on what instructions, orders and circulars the practice of collecting undated cheques from parties is being undertaken by the officers of the Anti Evasion Wing of the Central Excise Department - The Additional Commissioner, while filing the affidavit as directedabove, will after reading the aforementioned decision, place state the stand of the Anti Evasion Wing of the Central Excise Department - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Collection of undated cheques by officers of the Anti Evasion Wing of the Central Excise Department.
2. Legality and justification of the practice of collecting undated cheques.
3. Comparison with a similar case in the Department of Trade and Taxes of the Government of the NCT of Delhi.
4. Instructions, orders, and circulars governing the practice of collecting undated cheques.
5. Court's directive for the Additional Commissioner to file an affidavit regarding the practice.
6. Stay on coercive action against the Petitioner until the next hearing.

Analysis:
The High Court of Delhi addressed the issue of officers from the Anti Evasion Wing of the Central Excise Department collecting undated cheques from a Petitioner. The Court noted the submission of photocopies of three undated cheques and the claim by the Petitioner of a total of five undated cheques amounting to ?1.25 crores collected by the officers. The Respondent's officer confirmed the availability of the original cheques with the Department, which had not been encashed yet.

The Court raised concerns regarding the legality and justification of the practice of collecting undated cheques from parties. It directed the Additional Commissioner of Central Excise, In-charge of the Anti-Evasion Wing, to personally file an affidavit by a specified date, providing details on the instructions, orders, and circulars governing this practice. The Court emphasized the need for transparency and accountability in such procedures.

In a reference to a previous judgment involving a similar practice in the Department of Trade and Taxes of the Government of the NCT of Delhi, the Court highlighted the importance of halting such practices promptly. The Additional Commissioner was instructed to present the stand of the Anti Evasion Wing after reviewing the mentioned decision in the affidavit to be filed.

The Court scheduled the next hearing for May 8, 2017, and ordered a stay on any coercive action against the Petitioner until then. The directive was issued for the responsible officer of the Department to bring the original cheques to the Court on the next hearing date. The Court emphasized the seriousness of the matter by requesting direct involvement from the Additional Commissioner to clarify the situation and provide necessary explanations.

Overall, the judgment focused on scrutinizing the practice of collecting undated cheques by the Anti Evasion Wing, ensuring compliance with legal standards, and maintaining fairness in dealings with parties involved in such matters.