Union Of India & Ors vs M/S Green Alloys P.Ltd

Union of India & Ors. ..Appellants

Versus

M/s. Green Alloys P. Ltd. ..Respondent

JUDGMENT

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the order passed by a Division Bench of

the Punjab and Haryana High Court directing release of the goods seized

from the respondent on furnishing undertaking to pay the duty or other dues

which may be found due without furnishing any cash security or bank

guarantee for the value of the goods. Certain other directions were given

which we are not primarily concerned with. By the Writ Petition (CWP No.

17287 of 2008) the respondent had sought for a direction for release of raw

material seized by the Anti Evasion Branch of the Central Excise, Faridabad

on 15.9.2008 and also to quash letter of seizure on 24.9.2008 alongwith

Panchnama.

3. Stand of the present respondents was that under the Cenvat Credit

Rules, 2004, only the finished goods are excisable and there could be no

evasion of duty unless the goods are manufactured and cleared. Condition

of executing Bond in form B-11 or giving of cash security for releasing the

goods was not justified. Bond B-11 was applicable for release of finished

goods only.

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4. In the reply filed on behalf of the present appellant stand taken is that

the present respondent had shown low value addition and paid very less

amount of duty from the cash account. The imported scrap was of the value

of Rs.70-80 per kg. while finished goods were of the value of Rs.120-130

per kg. They also found that against the declared stock of 453326 kg.

aluminium scrap entered in the stock RG-23A Pt-I register, the balance

shown was nil. In the table reproduced in para 3 of the written statement, it

is mentioned that though there was entry of goods received in register RG-

23A, in the register maintained in computer in Excel Sheet, the entry of

7.9.2008 and 8.9.2008 was nil. It is thus pointed out that under Rule 15 of

the Cenvat Credit Rules, 2004, the goods were liable to confiscation and

penalty."

5. Though the High Court observed that it was not expressing any

opinion on the merits yet it went into various aspects and ultimately the

direction was given which is impugned in the present appeal.

6. Learned counsel for the appellants submitted that the approach of the

High Court is clearly erroneous.

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7. Learned counsel for the respondent on the other hand submitted that

the order of the High Court does not suffer from any infirmity.

8. Learned counsel for the respondent submitted that in a similar case

this Court had declined to interfere in SLP (C) No. 30354 of 2008 by order

dated 5.1.2009. The order reads as follows:

"Subject to granting liberty to the petitioners to issue additional show cause notice, the special leave petition is dismissed."

9. It is pointed out by learned counsel for the appellant that in the instant

case two show-cause notices have been issued. We find that while passing

an interim order the High Court had given certain categorical findings on

merits. It has held that it cannot be held that there was a clear case for

confiscation only on the ground that in the computerised excel sheet some

of the goods were not entered.

10. The High Court appears to have decided that aspect finally even

though that was not the stage for doing so and that was beyond the scope for

adjudication of the writ petition. In the circumstances we direct that the

4 respondent shall be permitted to release goods on furnishing cash security

or bank guarantee for 25% of the value of goods. The same shall be done

within a period of four weeks. The appeal is allowed to the aforesaid extent.

..............................................J. (Dr. ARIJIT PASAYAT)

.........................

..................J. (ASOK KUMAR GANGULY) New Delhi, April 28, 2009

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