2009 (11) TMI 493 - HC - Central Excise

Writ Court may intervene even at any interlocutory Goods seized by dept. - automobile parts sold in the market without payment of excise duty parts seized by the respondents from the premises of the petitioner-company are parts and components of earth removing machinery namely excavators and loaders which are not automobile parts and not mentioned in CETA Return the bank guarantee which the petitioner has furnished for securing a provisional release of the seized goods.

Issues Involved:
1. Validity of seizure memo dated 8-7-2009.
2. Classification of seized goods as automobile parts.
3. Requirement of registration under the Central Excise Act, 1944.
4. Provisional release of seized goods and return of the bank guarantee.
5. Petitioner's cooperation in the investigation process.
6. Jurisdiction and competence of the authority conducting the search and seizure.

Detailed Analysis:

1. Validity of Seizure Memo:
The petitioner challenged the seizure memo dated 8-7-2009, contending that the goods seized do not qualify as automobile parts as per Entry No. 100 in Schedule-III of the Central Excise Act, 1944. The respondents justified the seizure based on information suggesting that the petitioner was engaged in manufacturing activities without proper registration, leading to the evasion of excise duty.

2. Classification of Seized Goods:
The petitioner argued that the seized parts are components of earth-moving machinery (excavators and loaders) and not automobile parts. They relied on Circulars dated 11-7-1990 and 16-12-2008, which clarify that such machinery is not classified as automobiles under Entry No. 100. The respondents, however, claimed that the petitioner also manufactures multi-utility vehicles, which require registration and are subject to excise duty. The court noted that the final determination of whether the seized parts are automobile parts is pending investigation.

3. Requirement of Registration:
The petitioner contended that their activities of packing, repacking, and marking do not constitute manufacturing under Section 2(f) of the Act, as the goods are not listed in Schedule-III. Therefore, they argued that their units do not require registration under the Central Excise Act. The respondents countered that if the goods are deemed automobile parts, these activities would indeed constitute manufacturing, necessitating registration and the payment of excise duty.

4. Provisional Release and Return of Bank Guarantee:
The petitioner sought the return of the bank guarantee furnished for the provisional release of the seized goods. The court noted that the provisional release order by the Commissioner of Central Excise, which required the petitioner to furnish a bond and bank guarantee, was not under challenge. The court did not find grounds to quash the seizure memo or direct the return of the bank guarantee at this stage.

5. Petitioner's Cooperation in Investigation:
The respondents alleged that the petitioner was not cooperating with the investigation by withholding information and delaying the furnishing of required data. The court acknowledged these claims but emphasized the need for the investigation to be completed expeditiously. It directed the Investigating Agency to conclude the investigation within six months, allowing for adverse inferences or other permissible actions if the petitioner fails to provide the necessary information.

6. Jurisdiction and Competence of Authority:
The court found no dispute regarding the competence of the Directorate General of Central Excise Intelligence to conduct the search and seizure. The petitioner did not challenge the authority's jurisdiction or the sufficiency of the information that led to the seizure. The court refused to intervene in the ongoing investigation, stating that it would not be justified in prejudging the issue or interfering with the statutory authorities' jurisdiction.

Conclusion:
The court disposed of the writ petition, directing the Investigating Agency to expedite and conclude the investigation within six months. It left the parties to bear their own costs and did not grant the petitioner's request for quashing the seizure memo or returning the bank guarantee at this stage.

← Previous Next →