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TMI Blog2016 (11) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the learned Single Bench on 12th of January, 2015 whereby, a writ application filed by the appellant for payment of reward money in terms of the policy of the Central Excise Department remained unsuccessful. 2. The appellant was an employee of M/s. Punjab Fibers Limited. He informed the Central Excise Department that M/s. Punjab Fibers Limited is indulging in evasion of excise duty by misrepresenting polyester/cutting as cutting Yarn by resorting to quantification of polyester/cutting under parallel invoice in the guise of cutting yarn. On the basis of information supplied, the investigations were carried out. The adjudicating authority passed an order on 30th of March, 2001 whereby an additional excise duty of Rs. 1,17,13,520/- along with penalty of Rs. 1,17,13,520/- was imposed. An appeal against the said order filed by the M/s. Punjab Fiber Ltd. was dismissed on 30th of April, 2002. However, in further appeal, the Central Excise and Service Tax Appellate Tribunal (for short the Tribunal) vide its order dated 12th of February, 2002 dropped the entire duty demand against M/s. Punjab Fibers Limited. A reference petition against the said order was filed by the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the help rendered by the informer, whether information gives clues to persons involved in smuggling, or their associates, etc.; the risk involved for the government servants in working out the case, the difficulty in securing the information, the extent to which the vigilance of the staff led to the seizures, special initiative, efforts and ingenuity displayed, etc. and whether, besides the seizure of contraband goods, the owners/organizers/financiers/ racketeers as well as the carriers have been apprehended or not. 5. Stage of payment of reward - Payment of advance rewards. 5.1. Advance reward may be paid to informers and government servant upto 50% of the expected final reward immediately on seizure in respect of the following categories of goods, namely:- a) Gold/silver bullion and goods which are notified; or specified under the Customs Act, 1962; b) Arms and ammunition, explosives; c) Opium and other narcotic drugs; d) Goods not declared which are seized in the customs area or customs waters; and e) Freely convertible foreign exchange in the form of currency notes. 6. Payment of Final reward. 6.1. Final reward will be paid after adjusting the advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be paid to the officers/informers." 9. A perusal of the policy shows that the reward is purely an ex-gratia payment which is subject to the guidelines and in the absolute discretion of the authority competent to grant rewards. It cannot be claimed as a matter of right. The reward is payable in two stages, i.e. advance rewards and then after final adjudication. Final reward is payable after adjudication of the case resulting in confiscating the goods or on the realization of the demand as the case may be, but in case of delay in adjudication proceedings, the final reward can be sanctioned even prior to the conclusion of the adjudication proceedings. But in other cases, the final reward can be paid only after adjudication proceedings resulting in confiscation and/or confirmation of the demand and after conclusion of the appeal/revision proceedings by the appropriate authorities resulting in upholding of confiscation demand/fines/penalties etc. imposed under the respective Acts. 10. As per the facts on record, the demand raised by the adjudicating authority was affirmed by the appellate authority, but the same was set aside by the Tribunal. The further reference before the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the role assigned to an informer. 13. In fact, the learned counsel for the appellant has referred to a judgment which stands set aside in a judgment reported as Union of India and others Versus C. Krishna Reddy, (2003) 12 SCC 627. The Court held to the following effect:- "11. In our opinion, the view taken by the High Court that the revised guidelines would not apply is patently erroneous both on the fact situation of the case and also as a principle of law. The respondent has himself averred in para 14 of the writ petition that the Collector of Customs, Madras decided the case by his order dated 5-3-1993 and thereafter, he started contacting the officers of the Department for payment of the reward. He, therefore, made a claim for grant of reward for the first time in 1993. In Union of India v. R. Padmanabhan (2003) 7 SCC 270: JT (2003) 7 SC 196, exactly same question was examined and it was held that being ex gratia no right accrues to any sum as such till it is determined and awarded and, in such cases, normally it should not only be in terms of the guidelines and policy, in force, as on the date of consideration and actual grant but has to be necessarily with reference to any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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