2022 (2) TMI 618 - HC - Central Excise

Maintainability of application - availability of statutory remedy of appeal - appealable order or not - waiver of condition of pre-deposit - section 107 of CGST Act - grievance redressed by the writ-applicants is that instead of rewarding him, the Department has gone to the extent of holding the writ-applicants liable for such evasion by virtue of the impugned order passed by the Commissioner, CGST CEX, Gandhinagar - HELD THAT - The impugned order passed by the Commissioner, CGST CEX, Gandhinagar is an appeal-able order under Section-107 of the C.G.S.T. Act. As a statutory remedy of appeal is available to the writ-applicants, this writ-application need not be entertained - It appears that the present writ-application has been filed only with a view to overcome the 10% of the pre-deposit. According to Mr. Dave, his client is an ordinary man and would not be in a position to even deposit ₹ 4,00,000/- towards 10% of the total demand. It is always open for the writ-applicant to prefer an appropriate application before the appellate authority with a prayer that the condition precedent of 10% of pre-deposit may be waived. If any such application is filed, the appellate authority shall look into all the relevant aspects of the matter including the entire background of the writ-applicant and take an appropriate decision on such application. It is kept open for the writ-applicant to challenge the same once there is a final adjudication as regards his liability to pay the amount of penalty - application disposed off.

Issues:
1. Relief sought for the sanction and release of 20% of the recovery amount as a reward.
2. Quashing of the original order dated 23.10.2020.
3. Stay on the operation and implementation of the impugned order.
4. Grant of ex-parte ad interim relief.
5. Challenge against liability for evasion of duty.
6. Imposition of penalties on various entities involved in the evasion.
7. Appealability of the impugned order under Section-107 of the C.G.S.T. Act.
8. Filing of the writ-application to overcome the 10% pre-deposit requirement.
9. Possibility of challenging the reward issue after final adjudication.

Analysis:
1. The writ-applicants sought relief through a writ-application for the immediate sanction and release of 20% of the recovered duties and penalties as a reward. The applicant claimed to have provided crucial information leading to the detection of duty evasion. However, the Department held the applicants liable for the evasion instead of rewarding them, as per the impugned order by the Commissioner, CGST & CEX, Gandhinagar. The order detailed the recovery of evaded Central Excise duty, interest, and penalties on the entities involved in the evasion.

2. The penalty of Rs. 40,00,000 was imposed on the writ-applicant no.1 under Rule 26 of the Central Excise Rules, 2002, as the transporter of goods manufactured by a specific entity. The counsel for the writ-applicants argued against this liability, emphasizing the client's role in providing crucial information leading to the evasion's discovery.

3. The High Court noted that the impugned order was appealable under Section-107 of the C.G.S.T. Act, suggesting that the statutory remedy of appeal should be pursued instead of entertaining the writ-application. The court highlighted the availability of the appeal process for the writ-applicants to challenge the order.

4. The court observed that the writ-application seemed to be filed primarily to avoid the 10% pre-deposit requirement. The counsel expressed the client's inability to make the deposit and suggested filing an application before the appellate authority to waive this condition. The court advised the applicant to pursue this route for relief.

5. Regarding the issue of the reward, the court kept it open for the writ-applicant to contest once a final decision on the penalty liability was reached. The court disposed of the writ-application without expressing any opinion on the case's merits, permitting direct service of the order.

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