UNION OF INDIA AND ORS.versusM/S. GREEN ALLOYS P. LTD.

                         [2009) 7 S.C.R. 130


A                  UNION OF INDIA AND ORS.                           •
                                V.
                  MIS. GREEN ALLOYS P. LTD.
                  Civil Appeal No. 2894 of 2009
                             APRIL 28, 2009
B
           [DR. ARIJIT PASAYAT AND ASOK KUMAR
                        GANGULY, JJ.]
        Cenvat Credit Rules, 2004 - r.15 - Confiscation of raw
                                                                     •    ...
                                                                          t
  materials - Writ petition seeking release of goods seized -
c Direction by High Court to release goods on furnishing
  undertaking to pay duty without furnishing cash security- Held:
  High Court held that it was not a clear case for confiscation
  only on the ground that in computerised excel sheet some of
  the goods were not entered - It finally decided the issue at the
D interim stage - It was beyond the scope for adjudication in writ
  petition -· Thus, assessee permitted to release goods on
  furnishing cash security or bank guarantee for 25% of the value
  of goods - Constitution of India, 1950 - Article 226.
        The question which arose for consideration in this
E appeal was whether the High Court was justified in
  directing release of the goods seized from the respondent
  on furnishing undertaking to pay the duty or other dues
  without furnishing any cash security or bank guarantee
  for the value of the goods.
F       Partly allowing the appeal, the Court
       HELD: In the instant case, two show-cause notices
  were issued. While passing an interim order the High
  Court gave certain categorical findings on merits. It held
G 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. High               ..
  Court appears to have decided that aspect finally even
  though that was not the stage for doing so and that was
H                                130
                           UNION OF INDIA AND ORS. V.                  131
                            M/S. GREEN ALLOYS P. LTD.
      .)
           beyond the scope for adjudication of the writ petition. In A
           the circumstances the respondent shall be permitted to
           release goods on furnishing cash security or bank
           guarantee for 25% of the value of foods. [Paras 9 and 10]
           [132-G-H; 133-A-B]
               CIVIL APPELLATE JURI SDICTION : Civil Appeal No.               B
           2894 of 2009

      1         From the Judgement and Order dated 31.10.2008 of the
           Hon'ble High Court of Punjab &Haryana at Chandigarh in C.W.P.
           No. 17287 of 2008.
                C.V. Subrow, Rahul Kaushik,Anil Katiyar, for the Appellant.
                                                                              c
               Daffatray Vyas, Manish Sharmc::i, Chirag M. Shroff, for the
           Respondents.
                The Judgement of the Court was delivered by
                                                                              D
                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
                                                                             E
           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 F
           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 G
...        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.                                                             H
    132       SUPREME COURT REPORTS                   [2009) 7 S.C.R.


A       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
B 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
c 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
D 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.
E
          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
F 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
G
          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
H given certain categorical findings on merits. It has held that it
                     UNION OF INDIA AND ORS. V.               133
           M/S. GREEN ALLOYS P. LTD. [DR. ARIJIT PASAYAT, J.)

    cannot be held that there was a clear case for confiscation only A
    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 8

-   circumstances we direct that the 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.

    N.J.                                    Appeal paritly allowed.