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TMI Blog2010 (8) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... he utilization of such facilities for payment. The petitioner does not have any absolute right to avail of such facilities for payment of duty. - 7793 of 2010 - - - Dated:- 11-8-2010 - D.A. Mehta and H.N. Devani, JJ. REPRESENTED BY : Shri Dhaval G. Nanavati, for the Petitioner. S/Shri P.S. Champaneri and R.J. Oza, for the Respondent. [Judgment per : H.N. Devani, J. (Oral)]. - This petition under Articles 226 and 227 of the Constitution of India has been filed with the following substantive prayers :- "37 For the reasons stated herein above and those which may be urged at the time of hearing the petitioners respectfully pray that this Hon'ble court may be pleased to; 1. YOUR Lordships may please to issue writ of mandamus or a writ in the nature of mandamus of any other writ, order or direction to quash/set-aside the Order No. 29 of 2010 dated 28-8-2010 passed by the Central Board of Excise and Customs. 2. YOUR Lordships may please to direct the Respondents to restore the facility under Rule 8(1) of the Central Excise Rules, 2002. 3. YOUR Lordship may please to direct the Respondents to allow the Petitioner to pay of excise d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring in the matter has been granted on 2-2-2010. The nature of the offence was specified in Annexure-A to the said communication. It was stated that the unit had evaded central excise duty by way of procuring raw materials, i.e., MS Ingots, and not accounting for the same in their books and accounts, manufactured MS Bars from the same and removed/cleared the same clandestinely without preparation of Central Excise invoices and without payment of Central Excise duty. That the unit had also procured raw materials, that is, MS Ingots, availed Cenvat Credit on it and manufactured finished goods, viz. MS Bars and cleared the same clandestinely without preparation of Central Excise invoices and without payment of Central Excise duty. The unit had also cleared finished goods, i.e., MS Bars clandestinely without preparation of Central Excise invoices and without payment of Central Excise duty. In response to the said communication, the petitioner submitted a preliminary reply on 27th January, 2010 stating that the action was premature and that the provisions of Rules 12CC and 12AA had wrongly been invoked. Vide communication dated 30th June, 2010 of the Superintendent of Central Excise, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... landestinely removed finished goods. It is also averred that the panchnama dated 3rd/4th December, 2009 clearly shows that the petitioner had evaded central excise duty of Rs. 76.59 lakhs and violated the provisions of Rule 12CC of the C.E. Rules and Rule 12AA of the C.C. Rules. 6. Mr. M.L. Lahoty, learned senior advocate appearing on behalf of the petitioner vehemently assailed the impugned order submitting that the same had been passed without following due procedure as required under the Notification No. 32/2006-C.E. (N.T.) (hereinafter referred to as 'the subject notification'). Referring to the subject notification, it was pointed out that the procedure laid down thereunder requires the Commissioner of Central Excise or the Additional Director General of Central Excise Intelligence, as the case may be, after examination of records and other evidence and after satisfying himself that the person has knowingly committed the offence as specified in Para 1, to forward a proposal to the Chief Commissioner or Director General of Central Excise Intelligence, as the case may be, specifying the facilities to be withdrawn and restrictions to be imposed and the period of such with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y mis-utilization of cenvat credit. According to the learned counsel, the Notification No. 32/2006 has been issued pursuant to rule 12CC of the C.E. Rules and rule 12AA of the C.C. Rules, hence, in case of any contravention in relation to the C.E. Rules, the facilities to be withdrawn would be in connection with the Central Excise Rules, whereas in respect of mis-utilization of cenvat credit, the facilities to be withdrawn or imposition of restrictions can be made under Cenvat Credit Rules. That in the facts of the present case, there being no allegation as regards mis-utilization of cenvat credit, it was not permissible for the respondent Board to place restrictions against utilization of cenvat credit under rule 3(4) of the C.C. Rules. In support of his submissions, the learned counsel placed reliance upon a decision of this Court in the case of Dhariyal Chemicals v. Union of India, 2009 (234) E.L.T. 208 (Guj.). 9. On the other hand, Mr. R.J. Oza learned Senior Standing Counsel appearing on behalf of the respondents opposed the petition and reiterated the averments made in the affidavit-in-reply. It was submitted that rule 12CC of the C.E. Rules deals with evasion of cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue procedure has been followed prior to making the impugned order. It was submitted that the Board had considered all the material placed before it and thereafter, passed the impugned order. Referring to the decision of this High Court in the case of Dhariyal Chemicals v. Union of India (supra) it was submitted that the said decision would have no applicability to the facts of the present case inasmuch as in the said case, the Court had set aside the order impugned therein on the ground that no opportunity of hearing as contemplated under the notification had been afforded to the petitioner therein, whereas in the facts of the present case, the petitioner had been afforded ample opportunity of hearing and it was thereafter that the impugned order had been passed. It was, accordingly, urged that the impugned order has been passed in accordance with law and does not warrant interference. 10. Having regard to the submissions advanced by the learned advocates for the parties, it is apparent that the principal contentions raised on behalf of the petitioner are: (i) the procedure as required under the subject notification has not been followed; (ii) there has been delay at both s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 3 days cannot in any manner be termed to be so excessive so as to vitiate the entire proceedings. As regards the delay on the part of the Chief Commissioner in forwarding the comprehensive proposal along with the copy of the record of the personal hearing conducted by Gujarat High Court Case Information System the Chief Commissioner to the Board, a perusal of the averments made in the affidavit-in-reply, indicates that the Chief Commissioner received the proposal made by the first authority on 13th January, 2010 and forwarded the same along with his recommendations, the submissions of the assessee dated 27th January, 2010, report dated 6th January, 2010 of the Commissioner of Central Excise, Vapi as well as the relied upon documents in the prescribed format on 3rd February, 2010, that is on the 21st day. In this regard it may be noted that the subject notification does not prescribe any time limit for forwarding the comprehensive proposal to the Member, this prescription is found in the Circular dated 30th December, 2006 which is more in the nature of procedural guidelines/administrative instructions and in absence of any prescription in the parent notification, cannot be terme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the said credit has been taken; (d)taking of CENVAT Credit on invoices or other documents which a person has reasons to believe as not genuine; (e)issue of excise duty invoice without delivery of goods specified in the said invoice; (f) claiming of refund or rebate based on the excise duty paid invoice or other documents which a person has reason to believe as not genuine, an officer authorized by the Board may order for withdrawal of facilities or impose certain restrictions as specified in para 2 of this Notification. 2.Facilities to be withdrawn and imposition of restrictions : (1) Where a manufacturer is prima facie found to be knowingly involved in committing the offences as specified in para 1, the following restrictions may be imposed on the facilities, namely :- (i) the facility of monthly payment of duties may be withdrawn and the assessee shall be required to pay excise duty for each consignment at the time of removal of goods; (ii) payment of duty by utilisation of CENVAT credit may be restricted and the assessee shall be required to pay excise duty without utilising the CENVAT credit:" 14. Thus, Para 1 of the subject n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being less than Rs. 10 lakhs, the provisions of the subject notification could not have been invoked, apart from the fact that the parent notification does not provide for such a limitation, which is provided by way of administrative instructions, a perusal of the panchnama as well as the proposal indicate that the estimated duty involved in the evasion is Rs. 83.22 lakhs. In paragraph 7 of the petition, it has been averred that according to the panchnama there was an evasion of total duty amounting to Rs. 76 lakhs (approx.) and that in due course, the entire alleged amount of Rs. 81,84,000/- stood deposited by 24th February, 2010. In the circumstances, it is apparent that the evasion is much more than the monetary limit of Rs. 10 lakhs and not about 7 lakhs, as is sought to be contended on behalf of the petitioner, and as such, the said contention also does not merit acceptance. 16. In the light of the aforesaid, it is apparent that while making the impugned order dated 29th June, 2010, the Board has duly followed the procedure as required under the subject notification and has passed the impugned order whereby certain restrictions have been placed upon the facilities to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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