2024 (5) TMI 461 - HC - Central Excise

Reward to informers - Wilful and deliberate disobedience - Disbursement of reward to the petitioners in terms of the policy of the respondents within a period of two months - The petitioners argued that since the appeal had been concluded and no further appeal was pending, the matter pertaining to the amount payable by the assessee had been finalized, warranting the release of the reward. - HELD THAT - This Court notes that the assessee-company had voluntarily deposited a sum of ₹ 4,40,00,000/- with the respondents. After the dismissal of the application of the assessee-company under the Resolution Scheme, a further amount of ₹ 4,46,00,000/- was demanded by the GST Department on account of non-payment of redemption by the assessee, which the assessee-company was directed to deposit. Against the aforesaid further demand of ₹ 4,46,00,000/-, the assessee-company has already filed a writ petition being W.P.(C) 9311/2022, which is pending adjudication before the learned Division Bench. Thus, when the demand of the respondent-department with respect to payment of ₹ 9 Crores by the assessee-company still stands and further demand of ₹ 4,46,00,000/- has been raised by the respondents against the assessee-company, and the said issue is still pending adjudication before the learned Division Bench in W.P.(C) 9311/2022, it cannot be said that the proceedings against the assessee-company, have been closed. This Court also takes note of the submissions made by learned counsel for the respondents that the respondents cannot go beyond their Scheme, as no discretion is vested with the respondents to release any amount towards the reward, before finalization of the proceedings against the assessee-company - it is held that there is no willful and deliberate disobedience of the order by the respondents. The petition is disposed off.

Summary

Issues Involved:
1. Willful disobedience of court order dated 16th July 2019.
2. Entitlement and disbursement of reward under the Reward Policy.
3. Status of appeal before the Central Excise and Service Tax Tribunal (CESTAT).

Summary:

Issue 1: Willful disobedience of court order dated 16th July 2019
The petitioners alleged willful disobedience of the order dated 16th July 2019 passed in W.P.(C) No. 7560/2019, which directed the respondents to disburse the reward to the petitioners within two months and communicate the status of the appeal before the CESTAT.

Issue 2: Entitlement and disbursement of reward under the Reward Policy
The petitioners, as informers to the GST Department, claimed reward under the Reward Policy dated 20th June 2001. The court had earlier allowed the writ petition W.P.(C) 12327/2009, recognizing the petitioners' entitlement to a reward. Despite the court's direction, the reward was not disbursed due to the pending appeal before CESTAT.

Issue 3: Status of appeal before the Central Excise and Service Tax Tribunal (CESTAT)
The respondents communicated that the appeal had been dismissed by CESTAT, finalizing the case against M/s J.V. Industries Pvt. Ltd. The petitioners argued that with the conclusion of the appeal, the reward should be released. However, the respondents contended that the proceedings were not fully closed as a related writ petition W.P.(C) 9311/2022 was pending adjudication.

Court's Findings:
The court noted that the final reward could only be sanctioned after the conclusion of all adjudication/appeal proceedings, as per the respondents' scheme. Since the related writ petition was still pending, the proceedings against the assessee-company were not considered closed. Therefore, there was no willful and deliberate disobedience of the court order.

Conclusion:
The contempt petition was closed, and the notice of contempt was discharged. The petitioners were granted liberty to approach the respondents for the interim reward of Rs. 5 Lacs that had been sanctioned. They were also granted liberty to revive the contempt petition if there was non-compliance after the finalization of the proceedings against the assessee-company.