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2019 (8) TMI 434 - HC - CustomsReversal of Cenvat Credit under coercion and threat of arrest - even before any SCN was issued the Petitioners reversed the Cenvat credit - Whether in the facts, the grievance of the Petitioners that the recovery of the Cenvat Credit under the threat of arrest is true? HELD THAT:- The Petitioners claim, was under pressure from the officers of the Revenue, more particularly because of the threat of arrest. This we find is evident from the fact that the Petitioners had sought opinion of legal experts, whether on the facts of the case, is it possible for the Revenue to arrest them. This opinion was also furnished on 2 May 2018 to the Officers of the Revenue, this fact is recorded in the Petitioners' letter dated 7 May 2019 along with the fact of continuing pressure of the Revenue to reverse the credit. The aforesaid letter dated 7 May 2018 was not disputed by the Revenue, in spite of the serious charge of threating to arrest the Petitioners' director. - Thus, in these facts, we find that the Petitioners were coerced to reverse the Cenvat Credit under the threat of arrest. Whether such action on the part of the Revenue is at all permissible? - HELD THAT:- The contentions of the Revenue is that the Petitioners are builders and could not be coerced in reversing the Cenvat Credit on the threats of arrests. This is no explanation for the unbecoming conduct of the officers of the State who are duty bound to treat all equally. The officers' perception about, whether the Petitioners would act upon the threat or not, cannot give a licence to the Respondents to act in such illegal and high handed manner. The Supreme Court as well as our High Court has repeatedly held that rule of law has to be followed and no officers of the respondent can take law in his own hands or take extralegal steps or manoeuvre so as to collect amounts which have not yet been held by judicial and/or quasi judicial order as payable by the petitioners to the respondent. Threats of arrest - HELD THAT:- This serious allegation was not responded to by any denial on the part of the Respondents at that time. The events as well as the material placed on record by the Petitioners, after considering the affidavits filed by the Respondents, lead us to conclude that the Respondents have acted in a high handed manner and forced the Petitioners under the threat of arrest to reverse the Cenvat Credit of ₹ 11.25 crores before the show cause notice was issued or before any adjudication order thereon was passed - we direct the Respondents to allow the Petitioners to re-credit the amount of ₹ 11.25 crores in their Cenvat Credit account. - the Petitioners are prohibited from utilising the same till the adjudication of the show cause notice dated 28 September 2018 by the Commissioner, GST & CX. Petition allowed.
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