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TMI Blog2008 (11) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the 5th respondent in respect of any corrupt practice in the matter of payment of Excise Duty or Custom Duty or tax liability, it is always open to them to prefer necessary complaint of corruption as against the 5th respondent before the appropriate police authorities and seek for necessary action being taken against the 5th respondent, it is needless to state that if any such attempt is to be made either by the petitioner or Mr. Samuel C. Wilson, such action should satisfy the requirements of law as enunciated under the criminal legal system. It is for the petitioner to workout his remedy in the manner known to law. - 10512 of 2008 - - - Dated:- 11-11-2008 - A.K. Ganguly, C.J. and F.M. Ibrahim Kalifulla, J. [Order per : F.M. Ibrahim Kalifulla, J.]. - This is a public interest litigation and the petitioner seeks for the issuance of writ of mandamus to direct the respondents 1 to 3 to submit their action taken report in respect of the allegations reported against M/s. Hyundai Motor India Limited, situated at SIPCOT, Sriperumpudur, Kancheepuram District with a further direction to the respondents for taking appropriate action on the basis of the report and the recommen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvassed by the petitioner is about the under valuation of cars and CKD parts to their Parent/Group companies, that the profits of the 5th respondent are drained out to the parent company at Korea resulting in loss to the Government of India by way of foreign exchange to the tune of several hundred crores of Rupees. 6. It is also alleged that from August, 2007 a rebate of Rs. 20,00,00,000/- a month (refund of duty accumulated in Cenvat account) is given back to the 5th respondent which is due to the fact that huge Cenvat accumulation had taken place because of procurement of large quantities of inputs for such undervalued exports to their parent/associate companies and that if such under-valued exports were not there, there would not have been accumulation of Cenvat credit. In was therefore contended that the 5th respondent would have been paying more Central Excise Duty as well as higher foreign exchange earning on the exports. There is also an allegation to the effect that the Chairman of the Parent company viz., Hyundai Motor Corporation viz., Mr. Chung Mong-Koo was arrested for bribery and slush fund scandal on 29-4-2006 at Seoul, South Korea on the allegation that he had embe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, no under valuation of cars exported were reported and that no irregularities were found. 8. It is stated that whatever communications addressed by Mr. Sameul C. Wilson was also duly replied by the concerned authorities and that it was found that there was no basis in the allegations raised by Mr. Sameul C. Wilson. In paragraph 8 of the counter affidavit, it is stated that a Special Team comprising of 13 officers drawn from various formations of the Central Excise Department were formed during February, 2006 which included Mr. Sameul C. Wilson and that at the end of their study they were not able to point out any anomaly or irregularity in the pricing of exported cars or with regard to the valuation of cars and spares, it is also stated that prior to the study made by the Special Team, the 5th respondent was subjected to a detailed investigation/study by Director (Costs), Chennai at the request of the Jurisdictional Commissioner of Central Excise, Chennai-IV and in the report dated 16-12-2005, the said authority made it clear that he was not able to find any anomaly with regard to pricing of export cars. It is also stated that to the same effect was the report of the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said Mr. Sameul C. Wilson. Ultimately it was contended that the intense study and audit to verify the various allegations of Mr. Sameul C. Wilson were made which confirmed that there was no revenue loss or under-valuation as put forth by him and therefore the writ petition should be dismissed with exemplary costs. 12. On behalf of the 5th respondent, its General Manager-Finance (Taxation) has sworn to the counter affidavit. The 5th respondent also reiterated the various facts relating to the detailed exercise carried out by the high level authorities of the Central Excise Department and contended that the department having bestowed its best attention to enquire into the allegations at different levels and found that there was no truth in any of the allegations of Mr. Sameul C. Wilson, the present writ petition on the very same set of allegations at the instance of the petitioner should be rejected. It is stated that the various communications addressed by Mr. Sameul C. Wilson to the 5th respondent were duly replied by them refuting the allegations levelled against the 5th respondent. 13. In paragraph 9 of the counter affidavit, the 5th respondent has furnished the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores. In paragraph 31, the 5th respondent has stated that it has got 4606 employees on its rolls, 11234 as Trainees/Apprentices/Contract Workers, 14,000 suppliers/vendors' employees and 5,000 dealers' employees and thereby providing employment opportunities to 34,840 persons both directly and indirectly. 16. In paragraphs 32 to 35 it is stated that as one of the largest Central Excise Duty payers for 8 long years, the 5th respondent has received the Highest Tax Payer Award for two years and that it has been declaring profits year after year since its very inception. It also claims to have the credit of highest tax payer of income tax amongst the automobile sector all over India and highest tax payer of southern India. It is also stated to have secured the status of five star export house and won the top exporter of the year award sponsored by various independent agencies. It claims to export cars to more than 90 countries since 1999 and continues to retain and remain as market leader in the automobile industry, it is stated to have rolled out its 10,00,000th car in September, 2007 which is stated to be a record for the automobile industry in India, it is also stated to have erect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt value is an offence under the provisions of FEMA. 20. Mr. M. Ravindran, learned Additional Solicitor General of India, in his submissions pointed out that when a complaint relating to evasion of Central Excise duty was received in the Office of the Commissioner of Central Excise, Internal Audit Section, Chennai-4, Special Teams were formed to conduct audit on the 5th respondent by way of an internal audit. The learned ASG pointed out that in the office Order No. 4/2005, dated 20-12-2005, a team of officers for holding Internal Audit Section was formed to function with effect from 1-2-2006. He also pointed out that in the Audit team constituted on 13-2-2006, Mr. Samuel C. Wilson himself was a team head as Superintendent in respect of Poonamallee-IV Range in whose jurisdiction the 5th respondent factory was located and that the report of the said Audit Team dated 13-2-2006, discloses the particulars relating to the sale of cars both in the domestic market as well as exports and that the sale value of the exports were found to be on the lower side which was attributable to the duties and taxes forgone and the export incentive such as Duty Free Credit Entitlement Scheme benefits a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any of its allegations. The learned Senior Counsel would contend that such consideration was made by the Deputy Commissioner of Central Excise, Commissioner of Central Excise, Chief Commissioner of Central Excise, Appellate Officer in the Central Board of Excise and Customs (CBEC), New Delhi, Director (CX) CBEC, New Delhi, Central Information Commission, Transfer Pricing Officer, Income Tax, Internal Audit Team of Central Excise, Central Excise Revenue Audit (CERA), under Secretary to the Government of India, Director (Costing), Central Excise, Special Audit Team and officers of the Customs who had permitted the exports apart from the office of the Prime Minister. The learned Senior Counsel after referring to various reports of the authorities submitted that when none of the high level authorities could make out any misdeeds in the pricing of the products of the 5th respondent as well as in the payment of tax, custom duty and earning of foreign exchange, the present allegations of the petitioner are solely based on the very same allegations of Mr. Samuel C. Wilson, which were found to be lacking in truth in every respect. The learned Senior Counsel therefore contended that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany at Korea and other group/companies at different parts of the world at nearly half the value of the cost of production of the products. For the above communication, the 5th respondent sent its reply dated 31-8-2004, wherein it pointed out that the value adopted for export of its products were far higher than the cost of production involved. The 5tn respondent also gave a comparative statement of different model car, the countries to which they were exported, the cost of production, the value adopted for exports, domestic product cost and the relevant year when the exports were made. 29. Mr. Samuel C. Wilson, also wrote a further communication to the 5th respondent and the 5th respondent sent its reply. Mr. Samuel C. Wilson sent a report to the Deputy Commissioner of Central Excise, Poonamallee Division, Chennai dated 16-12-2004, alleging that the 5th respondent was indulging in malpractice in exporting its cars, engines and spare parts to its parent company and other group companies and thereby causing great revenue loss to the Country. The Deputy Commissioner of Central Excise in response to Mr. Samuel C. Wilson letter dated 16-12-2004, sent a letter dated 7-2-2006, communic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 29-7-2006. As the jurisdiction of the unit falls under the Chief Commissioner, Chennai, he was requested to examine your representation and he has got the matter examined through Commissioner of Central Excise, Chennai-4, who has examined in detail your representation and found that legally the allegation made by you do not stand the scrutiny of law. You have also appeared before the CC and submitted certain documents, which has also been examined by the Department. 4. From the above mentioned facts you would appreciate that the Department has taken into account the information provided by you and also examined the legal points raised by you. On legal issues as you are well aware that there could be different interpretation and the matter have been examined at a very senior level in the Department and the views taken by you are not as per the provisions of law." 33. Mr. Samuel C. Wilson filed a further appeal dated 16-6-2007, to the Central Information Commissioner, New Delhi under Section 19(3) of the Right to Information Act, 2005. In the meantime, the Ministry of Finance along with its letter dated 11-6-2007, sent a copy of its Note file wherein the various allegations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above factors if any such enquiry is to be ordered simply because the petitioner and Mr. Samuel C. Wilson, entertain a doubt about the conduct of the 5th respondent, that would amount to making a roving enquiry which will only result in a vexatious process being carried out. Such a roving enquiry is not within the scope of a Public Interest Litigation. 36. While considering the present litigation, we feel it appropriate to be guided by the caution indicated by the Honourable Supreme Court in entertaining public interest litigations in the decisions reported in 2002 (2) SCC 333 [Balco Employees' Union v. Union of India]; 2003 (7) SCC 546 [Guruvayoor Devaswom Managing Committee v. C.K. Rajan]; 2004 (3) SCC 349 [Ashok Kumar Pandey v. State of West Bengal]; 2005 (1) SCC 590 [Dattaraj Nathuji Thaware v. State of Maharashtra] and 2005 (1) CTC 721 [The Perundurai Citizens Welfare' Society v. Tamil Nadu Pollution Control Board]. In 2002 (2) SCC 333 [Balco Employees' Union v. Union of India], the Honourable Supreme Court has held as under in Paragraph 80 : "PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (3) SCC 349 [Ashok Kumar Pandey v. State of West Bengal] the Supreme Court has held in paragraphs 11, 12 and 14 as under : "11. It is depressing to note that on account of such trumpery proceedings initiated before the courts, innumerable days are wasted, which time otherwise could have been spent for the disposal of cases of genuine litigants. Though we spare no efforts in fostering and developing the laudable concept of PIL and extending our long arm of sympathy to the poor, the ignorant, the oppressed and the needy whose fundamental rights are infringed and violated and whose grievances go unnoticed, unrepresented and unheard; yet we cannot avoid but express our opinion that while genuine litigants with legitimate grievances relating to civil matters involving properties worth hundreds of millions of rupees and criminal cases in which persons sentenced to death and facing the gallows under untold agony, persons sentenced to life imprisonment and kept in incarceration for long years, persons suffering from undue delay in service matters - government or private, persons awaiting the disposal of cases wherein huge amounts of public revenue or unauthorized collection of tax amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntials of the applicant; (b) the prima facie correctness or nature of information given by him; and (c) the information being not vague and indefinite. The information should show gravity and seriousness involved. Court has to strike balance between two conflicting interests: (i) nobody should be allowed to indulge in wild and reckless allegations besmirching the character of others; and (ii) avoidance of public mischief and to avoid mischievous petitions seeking to assail, for oblique motives, justifiable executive actions. In such case, however, the court cannot afford to be liberal. It has to be extremely careful to see that under the guise of redressing a public grievance, it does not encroach upon the sphere reserved by the Constitution to the executive and the legislature. The court has to act ruthlessly while dealing with imposters and busybodies or meddlesome interlopers impersonating as public-spirited holy men. They masquerade as crusaders of justice. They pretend to act in the name of pro bono publico, though they have no interest of the public or even of their own to protect. (Emphasis added)" In 2005 (1) SCC 590 [Dattaraj Nathuji Thaware v. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istry of Finance explicitly shows that the said Mr. Sameul C. Wilson had developed an affront for the reasons best known to him, as against the 5th respondent and in spite of the said authorities having informed him that the complaint made by him have no basis and that no such large scale revenue loss by way of Central Excise or Customs Duty or loss of Foreign Exchange had taken place, the petitioner has come forward with this writ petition reiterating the very same allegations in a stereo typed fashion. Even before us, the petitioner was not able to even prima facie demonstrate how any malpractice was adopted by the 5th respondent in the back drop of pricing of its vehicles in the domestic market vis-à-vis the supply of exports or any undue favour gained by it at the hands of respondents 1 to 4. Merely by levelling the allegations alone this court will not be in a position to hold that an investigation as prayed for by the petitioner should be ordered. Further, the official respondents viz., respondents 1 to 4 have taken efforts to enquire into the complaints made by Mr. Samuel C. Wilson right from the year 2004 and have reported that there was no basis in his complaints and in on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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