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TMI Blog2008 (7) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... as ultra vires Rule 12CC of the Central Excise Rules, 1944 and Notification No.32/2006-C.E. (N.T.) dated 30.12.2006; (B) That Your Lordships may be pleased to issue a Writ of Mandamus or a Writ of Certiorari or any other appropriate writ, direction or order, quashing and setting aside Order No. 6/2008-M (CX)/DA dated 22.2.2008 (Annexure-'N') issued by the second respondent thereby directing the respondents, their servants and agents to permit the petitioner to utilize cenvat credit for paying excise duties on the goods cleared for home consumption during the period from 27.2.2008 to 26.5.2008 and even thereafter; (C) That Your Lordships may be pleased to issue a writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate writ, direction or order, directing the respondents, their servants and agents to forthwith give to the petitioner copies of all the seized documents and also the statements on which signatures of the petitioner as well as Shri Ganesh Dutt Joshi are taken by the Preventive Officers functioning under respondent no.4 herein; (D) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to stay implementation and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intment was postponed to 30.10.2007 vide letter dated 26.10.2007. Thereafter, the Chief Commissioner of Central Excise (CCCE) personally heard the petitioner as well as Mr. Ganesh Dutt Joshi and one Dr. C. D. Dhariyal, the father of the petitioner on 30.10.2007. At the said hearing the purpose of the hearing was disclosed by the CCCE and the said fact has been recorded in the following words by the CCCE: "On being asked to tender their submissions on the issue relating to withdraw of facility of monthly payment of excise duty and also the payment of Central Excise duty by utilization of CENVAT credit, Shri Yogesh Dhariyal submitted that the facility extended to them under Central Excise Law should not be withdrawn as the same would put them under financial constraint, and since they had not done any wrong." 5. Thereafter, it appears that CCCE forwarded a proposal to the Central Board of Excise & Customs (CBEC). On 22.08.2008 Order No.6/08-M(CX)/DA came to be made by Member of CBEC whereunder following directions were issued: "ORDER 5. In view of the above, I hereby pass the following order:- (i) The facility of monthly payment of excise duty by M/s. Dhariyal Chemicals, as prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order was required to be struck down. 7. On behalf of the respondent authorities learned Counsel submitted that in so far as the challenge to validity of Rule 12CC of the Rules and the Notification is concerned no case was made out by the petitioner as to how and in what manner the said Rule and the Notification are ultra vires the Constitution. 7.1 In relation to the requirement of paragraph No.4(2) of the Notification granting an opportunity of hearing, it was submitted that such an opportunity was granted as could be seen from communication dated 16.10.2007 and bearing in mind the object and purpose of the Notification no case was made out for conducting a full-fledged proceeding as in case of regular assessment by issuing Show Cause Notice etc. That in the facts of the present case, in fact, the petitioner was aware about the purpose for which the petitioner was called and this was apparent from written submissions dated 30.10.2007 filed by the petitioner before CCCE. That the said written submissions referred to the Notification in question and therefore it was apparent that the procedure adopted by CCCE was in accordance with the requirement of Notification and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Central Government to issue a Notification whereunder specific restrictions may be placed on the specified category of persons having regard to the extent of evasion of duty, nature and type of offence or such other factors as may be relevant in order to prevent such evasion, default in payment of excise duty etc. In exercise of these powers Notification No. 32 of 2006-CE(NT) dated 30.12.2006 has been issued. The Notification provides for a summary scheme which is to act as a deterrent against tax evaders by withdrawal of facilities from such persons. 10. On a plain reading of Rule 12CC of the Rules and the impugned Notification it becomes apparent that the Rule and the Notification have been framed for a specified class of persons having reasonable nexus with the object sought to be achieved, and this becomes abundantly clear when one considers paragraph No.3 of the Notification which lays down the monetary limit in which class of cases the Notification shall be made applicable. Therefore, there is no merit in the challenge to constitutional validity of the Rule and the Notification. 11. In so far as the grievance ventilated regarding lack of opportunity before passing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, as far as possible. In sub-paragraph No.(2) of paragraph No.4 of the Notification CCCE is required to examine the proposal placed before him, and after satisfying himself that the records and the evidence relied upon in the proposal are sufficient to form a reasonable belief that a person has knowingly committed the offence specified in paragraph No.1 of the Notification, may forward the proposal along with his recommendations to the Board. The latter part of the said sub-paragraph states that however, before the CCCE forwards his recommendations he shall give an opportunity of being heard to the person against whom the proceedings had been initiated and shall take into account any representation made by such person before forwarding the recommendations. Sub-paragraph No.(3) of paragraph No.4 of the Notification provides for an officer, authorised by the Board, to examine the recommendations received from CCCE and issue an order specifying the type of facilities to be withdrawn or the type of restrictions to be imposed, along with the period for which such facilities will not be available or the period for which the restrictions shall be operative. 13. The scheme that unfolds, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any special circumstances that might be within the knowledge of the person concerned and may not have come on record of the proceedings of proposal. The respondent authority cannot be heard to state, in such circumstances, that because the person concerned was aware of the proceedings taken prior to making of the proposal by CCE no further opportunity is required and it would suffice if only the person concerned is invited for hearing. 15. The aforesaid view is fortified by language of sub-paragraph No.(3) of paragraph No.4 of the Notification which does not provide for any hearing by the authorised officer before issuing order specifying type of facilities to be withdrawn or type of restrictions to be imposed along with the period for which such facilities will not be available or the restrictions shall operate. Therefore, when at the first stage, viz. making of a proposal the person concerned has no voice, and at the final stage, when the order is issued the person concerned has no voice, the second stage, viz. when CCCE makes his recommendations the opportunity of hearing which is granted to the person concerned has to be a meaningful opportunity, and cannot be treated as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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