TMI Blog2014 (9) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... engupta, Shyamlal Sarkar, Rajesh Gupta and Ms. Rajshree Kajaria, for the Petitioner. Shri P.K. Roy and K.K. Maiti, for the Respondent. JUDGMENT The subject matter of challenge in this writ petition is the show cause notice, dated 30th April 2013, issued by the Commissioner, Central Excise, Bolpur, against the petitioner alleging evasion of Central Excise Duty on clandestine clearance of the goods without recording the productions in the Daily Stock Account Register. 2. The show cause notice was issued after incriminating documents, recovered during search and seizure, showing discrepancies; leading to suspicion of clandestine clearance of the goods from the factory of the petitioner without payment of the excise duty. 3. According to the department, a pen drive was recovered from the factory premises of the petitioner containing data/information relating to production of the M.S. Billet between the periods 1-7-2009 to 14-1-2010 which did not tally with the Daily Stock Account Register maintained in the factory. Perusing those data/records suggest that excess production was made for which excise duty is not paid. The authorities, thereafter, made extensive invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision Bench refused to interfere with the findings recorded therein which logically infers that the ratio decided by the Tribunal in the said case was affirmed [2013 (287) E.L.T. 243 (Guj.)]. 10. Mr. Sengupta strenuously argues that the show cause notice does not depict corroborative evidences relating to the purchase of raw material, sale of the finished goods as well as variance in the consumption of electricity which are some of the tests for proving clandestine removal of the goods, as held by the Tribunal in the cases of Gian Castings Limited v. Commissioner of Central Excise, Chandigarh, reported in 2007 (220) E.L.T. 139 and Rawalwasia Ispat Udyog Limited v. Commissioner of Central Excise, Delhi, reported in 2005 (186) E.L.T. 465. 11. On the point that the private note book maintained by a person containing unauthorized entries is not a dependable record for proving clandestine removal unless it is corroborated by other evidences, viz. consumption of raw material, manufacturing of goods and its clandestine sale and in support thereof reliance is placed upon a judgment of the Tribunal in the case of M.T.K. Gurusamy v. Commissioner of Central Excise, Madurai, reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Polar Marmo Agglomerates Limited, reported in 1997 (96) E.L.T. 21. 3. Union of India v. Hindustan Development Corporation Limited, reported in 1998 (100) E.L.T. 14. 4. Commissioner of Customs and Central Excise v. Charminar Nonwovens Limited, reported in 2004 (167) E.L.T. 372. 5. State of Uttar Pradesh Another v. Anil Kumar Ramesh Kumar Chandra Glass Works Another, reported in (2005) 11 SCC 451. 6. Standard Chartered Bank Others v. Directorate of Enforcement Others, reported in AIR 2006 SC 1301 = 2006 (197) E.L.T. 18 (S.C.). 17. Having heard the respective submissions this Court feels that before proceeding to decide the other points, agitated before this Court, the scope of judicial review, against the show cause notice, is required to be dealt with first. 18. In the case of Geep Flashlight Industries Limited (supra) the matter relates to a classification dispute. According to the department, the consignment of manganese dioxide attracts levy of duty under Tariff Item 28 which, according to the petitioner, should be assessed under Tariff Item 26. The appellate authority affirms the order of the assessing authority but the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from proceeding with the adjudication and the prosecution is essentially based on the constitutional challenge to the relevant provisions of the Act on the ground that they violate Articles 14 and 21 of the Constitution of India. Once we have held, as the High Court did, that the provisions are constitutional, the basis on which the writ of prohibition is sought for by the appellants disappears. It is settled by the decisions of this Court that a writ of prohibition will issue to prevent a Tribunal or Authority from proceeding further when the Authority proceeds to act without or in excess of jurisdiction; proceeds to act in violation of the rules of natural justice; or proceeds to act under a law which is itself ultra vires or unconstitutional. Since the basis of the claim for the relief is found not to exist, the High Court rightly refused the prayer for the issue of a writ of prohibition restraining the Authorities from continuing the proceedings pursuant to the notices issued. As indicated by this Court in State of Uttar Pradesh v. Brahm Datt Sharma [(1987) 2 SCC 179] when a show cause notice is issued under statutory provision calling upon the person concerned to show cause, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese words : 5. Upon giving our anxious consideration, we are clearly of the opinion that the contention of the petitioners can better be appreciated by the authorities before whom they are required to show cause inasmuch as adjudication of the controversy depends upon the investigation of facts and appreciation of evidence thereon which cannot be done by this Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. 7. There is another aspect of the matter, namely, the petitioners have approached this Court rather prematurely without even answering the show cause notices issued to them. Hitherto no orders adverse to them have been passed. 8. For the foregoing reasons, we are not inclined to interfere in the matter at this stage. However, considering the fact that the period stipulated in the impugned notices for furnishing reply has expired, we permit the petitioners to file reply within thirty days from today and if they do so filed their reply, the same shall be treated to be within time. 22. The ratio which could be culled out from the aforesaid judgment is that the power of judicial review, under Article 226 of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities concerned about the absence of case for proceeding against the person against whom the show cause notices have been issued. Abstinence from interference at the stage of issuance of show cause notice in order to relegate the parties to the proceedings before the authorities concerned is the normal rule. However, the said rule is not without exceptions. Where a show cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show cause notice. The interference at the show cause notice stage should be rare and not in a routine manner. Mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out. 25. Let me now see whether the show cause notice, issued by the authority, which is the subject matter in this writ petition, lacks material particulars justifying commission of offence or it is contrary to the settled proposition of law laid down in judicial pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indulge in clandestine purchasing of raw-materials and indulge in theft of electricity and otherwise also they can use unaccounted diesel to hide the production, by using their generator is based on surmises and conjectures. The charge of clandestine removal has to be proved by the Revenue by bringing positive evidence on record and not by presumptions and assumptions. The Supreme Court has held in the judgment in the case of Oudh Sugar Mills Ltd. v. UOI, 1978 (2) E.L.T. J172 that no show cause notice or an order can be based on assumptions and presumptions. The findings based on such presumptions and assumptions without any tangible evidence will be vitiated by an error of law. Similarly, in the case of Poly Printers v. C.C.E., Delhi-I, 2002 (139) E.L.T. 295, the Tribunal did not find the charge of clandestine manufacture and clearances of the final product by the assessee sustainable as no evidence has also been collected by recording the statement of any buyers to establish the clandestine sale of the final product by the appellants without payment of duty . No unaccounted printing ink was found lying in the factory premises of the firm.... The Tribunal also in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Feldspar, Zinc, Borax Powder, Calcium and Dolomite as inputs/raw material. On the date of visit of the officers to the factory premises of the appellant, it is undisputed that the stock of raw materials as well as finished goods was tallying with recorded balances. This conclusion can be reached from perusal of records, as there is nothing on record to indicate otherwise. 13. On careful perusal of the entire records of the case, we find that there is nothing on record as to unrecorded purchases or consumption of various other raw material in the manufacture of Frit, there is also nothing on record to indicate that the appellant had purchased the Quartz, Feldspar, Zinc, Borax Powder, Calcium and Dolomite and without accounting them used for the manufacture of Frit for clandestine removal. There is also nothing on record nor there is any statement of the suppliers of other raw materials, which would indicate that the appellant had received unaccounted raw material from the suppliers of these raw materials. There is a solitary evidence in the form of statement of supplier of one of the raw material i.e. Borax Powder, who indicated that the appellant had procured Borax Powder and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... text of available evidences. Such stage has not reached as the petitioner has come up against the show cause notice. Furthermore, the petitioner itself has submitted to the jurisdiction of the authority after receiving the show cause notice and asked for supply of certain documents for the purpose of giving an elaborate and extensive reply. This Court, therefore, does not find that the exception, carved out in the aforesaid decisions, has been satisfied. 31. This Court, therefore, does not find any ground to interfere with the show cause notice. 32. Considering the fact that the petitioner has asked for supply of certain documents for the purpose of filing reply, the respondents are directed to supply those documents to the petitioner within two weeks from the date of communication of this order. 33. After receiving those documents, the petitioner shall file the reply to the show cause notice within three weeks from the date of receipt of the documents. The authorities shall, thereafter, decide the issues on merit, as expeditiously as possible, in accordance with law. 34. With the aforesaid observations, the writ petition is disposed of. 35. There shall, however, be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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