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TMI Blog2012 (5) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by the Government during the course of the investigation in 200506. However, though the recovery was made in 2006, the reward which is due to him has not been paid and it is on this basis that the Petitioner has moved this Court under Article 226. 2. An affidavit in reply has been filed in these proceedings by the Assistant Director working in the office of the DGCEI. The affidavit states that the department did receive information to the effect that Punj Lloyd Ltd. had constructed a pipeline for ONGC at the JNPT Terminal, New Mumbai. An informer informed the department that though the amount was paid by ONGC to Punj Lloyd Ltd, service tax dues to the extent of Rs.80 Crores were not paid. A notice to show cause was issued on 19 December 2007 to Punj Lloyd Ltd. stating that it had provided taxable services under the category of "commercial or industrial construction services" and the company was liable to pay service tax dues under the Finance Act, 1994. During the course of the investigation the company paid a sum of Rs.10.80 Crores as service tax and an amount of Rs.52.59 lacs as interest. However, according to the department, Punj Lloyd replied to the notice to show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmissible reward may be paid to the informers and Govt. servants, immediately after seizure, if the authority competent to sanction reward is satisfied that the goods seized are reasonably expected to be confiscated on adjudication and the adjudication order is likely to be sustained in appeal /revision proceedings. 6.3 In all other cases, including Customs appraising cases, cases of townseizures and Central Excise duty evasion cases, normally, no advance/interim reward will be granted. However, in cases where the parties/persons involved have voluntarily paid the amount of duty evaded during the course of investigation, admitting their liability, 25% of the voluntary deposits may be considered for payment as advance /interim reward to the informers, after the issue of the show cause notice (SCN), provided the authority competent to sanction reward is satisfied that there is reasonable chance of confiscability / infringement / evasion, as the case may be, being established in adjudication and sustained in appeal / revisionary proceedings. However, in such cases, the Govt. servants will become eligible for payment of advance / interim reward only after adjudication of Show Cause No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision. For all other cases Clause 6.3 lays down that ordinarily no advance or interim reward will be granted. The Petitioner seeks to bring his case under the purview of Clause 6.3. Admittedly, neither Clauses 6.1 or 6.2 apply. However, even clause 6.3 requires the fulfillment of four conditions : (i) The persons or parties involved must have voluntarily paid the amount of duty evaded during the course of investigation; (ii) The liability must be admitted; (iii) A notice to show cause should have been issued and (iv) The authority competent to sanction the reward must be satisfied that there is reasonable chance of obtaining an order of confiscation or a finding of infringement or evasion in adjudication and which would be sustained in appeal or revision. 7. Counsel appearing on behalf of the Petitioner submitted that if within the meaning of Clause 6.3 the assessee has admitted the liability to pay the dues, there would be no occasion for a determination as to whether the confiscation, infringement or evasion would be upheld in appeal or revision. A suggestion was therefore made that there appears to be some internal conflict in the circular. That would not be a fair and proper r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitting its liability and a satisfaction of the competent authority that there is a reasonable chance that the issue of confiscability, infringement or evasion would be established in adjudication or sustained in appeal or revision. These are not matters in which the Court can exercise its perception to determine as to whether there is a reasonable possibility of the action being sustained in appeal or revision. That is ultimately a matter which has to be determined by the competent authority which is constituted in the form of a committee by the circulars. In the present case, the grievance of the Petitioner is that the case of the Petitioner has not even been considered by the designated committee. We would have been inclined to consider the prayer for a direction to the committee to consider the request of the Petitioner, but in the facts of this case do not accede to the request for the simple reason that the issue as regards the culpability of the assessee is still pending in appeal before the CESTAT. Though the department has recovered the duty evaded on account of service tax dues together with interest, the matter has not attained finality. The payment of a reward at this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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