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2022 (6) TMI 302 - HC - Central ExciseValidity of SCN issued - Power of trial court to accept the challenge the validity of SCN - Prosecution proceedings against the accused - applicability of time limitation - imposition of cost upon the Central Excise Officer - monitory decree alongwith the interest - acquittal of the accused - suit for permanent injunction for restraining the defendants from taking action against him. Validity of SCN - plaintiff has challenged the show cause notice issued under the Act on the grounds that it was issued after lapse of 6 months and it is time barred - HELD THAT:- In the present case, it is admitted fact that notice has been issued to the plaintiff after six months. It is also admitted facts that against the said notice, the plaintiff ha approached the authority by way of appeal and even thereafter by way of revision, challenging the said notice. Thus, the alternative appropriate remedy has already been exhausted by the plaintiff, of course during the pendency of the suit. Thus, there was no question of declaration to be wade in respect of show cause notice issued to the plaintiff - Admittedly, in this Case, the authority has not initiated any legal proceedings of recovery or penalty against the plaintiff. The course adopted by the defendant authority is in the realm of Quasi-judicial proceedings of seeking penalty under the Act. Therefore, though the notice has been issued after six months from the date of checking i.e. 21.02.1979, the notice cannot be held to be illegal one and no declaration or injunction against the same can be granted in favour of the plaintiff. The Trial Court has not considered the provision of Section 40(2) of the Act which clearly does not apply to the departmental proceedings and only applies for initiation of suit or prosecution. Therefore, in view of the facts and legal provisions, it is clearly found that the Trial Court has committed error in declaring the show cause notice as illegal and time barred. In the facts and circumstances of the case, whether the Trial Court has committed error of facts and law in deciding the issue of maintainability of the suit under the provisions of Section 40 of the Act? - HELD THAT:- The right to restoration of the goods is a vested Civil Right and on expiry of the initial period of six months this right to restoration of the goods vested indefeasibly and absolutely in the petitioner and it cannot be taken away. The defence raised by the department regarding the provisions of Section 123 of the Customs Act, it was held that, that Section does not apply with the facts of the case. It is pertinent to note that Sub-section 2 of Section 40 of the Act as referred to herein above provides that no proceedings, other than a suit, shall be commenced against the Central Government or any Officer of the Central Government or State Government for anything done or purported to have been done in pursuance of this Act or any rule made thereunder, without giving the Central Government a month’s previous notice in writing of the intended proceedings and of the cause thereof or after the expiration of three months from the accrual of such cause. Thus, the provision relates regarding the proceedings other than a suit - admittedly, in the present case, the plaintiff has already issued prior notice to the Government for his intended action of filing suit for damages and the plaintiff has filed a suit after service of notice. The suit is also for damages. Therefore, considering the facts of the present case, the suit is maintainable even under Section 40(2) of the Act - Trial Court has not committed any error of facts and law in holding that the suit is maintainable. In the facts and circumstances of the case, whether the Trial Court has committed error of facts and law in observing that the plaintiff is entitled to recover the amount of Rs.9,33,378.37 with interest? - In the facts and circumstances of the case, whether the Trial Court has committed error of facts and law in passing the impugned decree in favour of the plaintiff? - HELD THAT:- There is no dispute regarding the checking of the warehouse of the plaintiff by the officers of the Excise Department. It also reveals from the evidence that at the time of checking plaintiff Somabhai was not present. It is also established that at the time of checking Mahendrabhai and Chhaganbhai were also present. Not only that, but as per evidence of the labourer Muljibhai Kachrabhai Mangora that he himself has called other labourers and the officers have instructed them to bring bags from the different lots of bags and the weight was carried out of almost 400 to 500 bags. He has also stated that the officers have returned back the bags and have instructed them to arrange it as it was, prior to checking, however, as there was no time available for them, they did not do so. It also reveals from his evidence that the necessary writing was also being done as and when there was weighting of the bags. Thus the factum of preference of the panchnama and weighting of the bags and handing over the bags to the plaintiff side is clearly established. Further, it reveals from the evidence that the tobacco was lying in the warehouse of the plaintiff. As per the entire oral evidence of the plaintiff witnesses, all the bags of tobacco were kept in the same warehouse. Further it reveals that as per the oral evidence of the plaintiff side, fire was broken out as there was no proper ventilation available and due to heat, fire broke out. Since the tobacco was lying in the warehouse of the plaintiff, it was for the plaintiff to see to it that there is proper ventilation available in it and no untoward incident of fire took place. The entire case of the plaintiff is based upon the allegations that due to negligence on the part of officers of the Excise Department, not permitting him to sold out tobacco, he has suffered damages due to fire occurred in his warehouse - it is not the case of the plaintiff that at the time of checking the bags were made empty and tobacco was converted into heap. Thus, the version of the plaintiff is also not probable one. Further, considering the impugned judgment of the Trial Court, it appears that the Trial Court has even not bothered to produce the oral evidence of the witnesses and has simply decided the case on the basis of some statement from the evidence. The Trial Court has failed to follow the principles of evidence that while appreciating the oral evidence of any witness, the version of chief examination, crossexamination as well as re-examination needs to be appreciated. However, in this case, the learned Trial Court has not even referred to the entire evidence of any witness. Due to that, the Trial Court has wrongly come to the conclusion that the defendants are liable for whatever damage is caused to the plaintiff due to natural fire broke out in his warehouse. The present appeal is liable to be allowed and the impugned judgment and decree of the Trial Court needs to be set aside - Appeal allowed.
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