2006 (7) TMI 6 - SC - Central Excise

Duty demand Seizure of Bank Account Held that - First respondent has withdrawn the amount in the Bank Account before the order of stay was passed by this Court. In view of the withdrawal, the appeal filed by the appellants has become infructuous. However, we leave the question of law raised in this appeal open to be decided in an appropriate case. It is also submitted by the learned Additional Solicitor General that in view of the withdrawal of the entire amount from the Bank Account, a fresh show cause notice was issued after the investigation was completed. It is for the appellant to proceed further in accordance with law - there cannot be any order of seizure of the Bank Account by the appellants - Decided in favour of Revenue.

Summary

Issues:
1. Correctness of the judgment passed by the High Court regarding the prevention of account operation.
2. Legality and correctness of the orders passed by the High Court.
3. Freezing and subsequent withdrawal of funds from the Bank Account.
4. Infructuous nature of the appeal due to fund withdrawal.
5. Issuance of a fresh show cause notice after fund withdrawal.
6. Seizure orders of the Bank Account by the appellants.

Analysis:
1. The Supreme Court heard an appeal filed by the Union of India challenging the High Court's judgment that deemed the prevention of account operation by the appellants as unlawful. The High Court directed the release and operation of the account of the respondent, disagreeing with the actions taken under specific sections of the Customs Act, 1962.

2. The Union of India raised several grounds questioning the legality and correctness of the High Court's orders. However, due to subsequent developments, the Supreme Court refrained from delving into the raised legal issues and merits of the case at that stage.

3. The respondent's Bank Account was frozen by the appellants, and a significant sum was seized. Despite the High Court's judgment in favor of the respondent and the subsequent withdrawal of a substantial amount from the account by the respondent, the appeal was filed by the appellants after a delay, rendering it infructuous.

4. The withdrawal of the funds before the Supreme Court's order of stay made the appeal moot. The Court decided to keep the legal questions raised in the appeal open for future resolution in an appropriate case.

5. Following the withdrawal of the entire amount from the Bank Account, a fresh show cause notice was issued by the appellants after completing the investigation, allowing them to proceed further in compliance with the law.

6. The Supreme Court, in light of the developments and the withdrawal of funds, lifted the seizure orders of the Bank Account, granting the respondent the liberty to operate the account. Consequently, the appeal was allowed, and no costs were awarded in the matter.