TMI Blog2016 (9) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... and such decision is to be arrived at after completion of adjudication /appeal /revision proceedings and the final reward to be determined on the basis of net sale proceeds of goods seized /confiscated (if any) and/or amount of additional duty /fraudulently claimed drawback recovered plus penalty /fine recovered - the scheme seals limit of reward to 20% of the net sale proceeds. It will be open to all concerned to raise all contentions including the contention of recovery as contemplated in “The Scheme” does not cover the payment of duty by utilizing the cenvat credit. Petition disposed off - decided in favor of petitioner. - Special Civil Application No. 11546 of 2015 - - - Dated:- 24-6-2016 - MR. S.R. BRAHMBHATT AND MR. A.Y. KOGJE JJ. S A Chhabaria, Advocate for the Petitioner Mr. RJ Oza, Senior Advocate and Mr. YN Ravani, Advocate for the Respondent. JUDGMENT (PER : HONOURABLE MR.JUSTICE A.Y. KOGJE) 1. The petitioner before this Court claims to be an informer, on whose information a raid was carried out and incident of excise duty evasion came to light. Now by invoking Articles 226 and 227 of the Constitution of India, the petitioner is claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase was detected on 19.0.1999. The Committee went through the judgment of Larger Bench of CESTAT, Mumbai in case of M/s Gauri Plasticulture (P) Ltd. Vs. CCE Indore [2006 (2002) ELT 199 (Tri.LB)] in which CESTAT has decided that assessee is not allowed to claim the cash refund of unutilized credit as credit lying in balance get lapsed on closure of the unit. In this case if the party would not have debited ₹ 1,15,60,116/- from the Cenvat account during investigation, an amount of ₹ 1,15,60,116/- minus ₹ 1,73,546/- would have lapsed as unutilized credit after the closure of the unit thus after detection of the case Department has gained only ₹ 1,73,346/- through PLA before closure of the unit. The committee finally observed since no additional recovery except ₹ 1,73,346/- paid by the party through PLA has been made in this case anti ₹ 1,00,000/- has already been granted and paid to the informer as advance rewarded and recovery proceedings from remaining dues amount to ₹ 15,86,60,312/- are pending with the DRT, Mumbai the case is not ripe from grant of final reward at this stage, final reward proposal can be considered only after completion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning Central Excise duty amounting to ₹ 8,76,71,739/- forthwith. 4. On that basis, he submitted that as the adjudicating authority has concluded that amount of ₹ 1,15,60,118/- is already paid by M/s.VFL, hence the petitioner is entitled to receive 20% of that amount which comes to ₹ 23,12,023.00. Learned Advocate referred to the judgment of the Apex Court in the case of Union of India Vs. R.Padmanabhan in Appeal (Civil) No.2769 of 1999 dated 13.08.2003. In this judgment, learned Advocate drew particular attention to the following observations made by the Apex Court:- ...Reward is purely an ex-gratia payment, subject to the Guidelines on the discretion of the competent authority, though it cannot arbitrarily be denied or refused at whim or fancy and it should specifically conform to and must be shown to fall or claimed within the four corners of the Scheme and not by any deviation or modulation of the Scheme, as the Courts think it should be and if it cannot come strictly within the four corners of it, such claim may have to be dealt with only under the residuary powers enabling the grant of reward. 5. While making submissions, he candidly agreed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notice resulting in confirmation of duty. 7.1 Final rewards, both the officers as well as informers, should be sanctioned and disbursed only after conclusion of adjudication/appeal/revision proceedings. The final reward will be determined on the basis of the net sale proceeds of goods seized/confiscated (if any) and/or the amount of additional duty/fraudulently claimed Drawback recovered plus penalty/fine recovered and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. On the basis of the Reward Scheme, Shri Oza submitted that the instance of giving final reward would only come into existence on the basis of actual recovery made by the Department pursuant to the information given by the informer. He submitted that in the instant case, what is actually recovered by the Department is an amount of ₹ 1,73,000/- (rounded off) and as against this, the petitioner has already received an amount of ₹ 1,00,000/- towards the interim reward. He submitted that in view of the fact that the amount is actually not recovered and the recovery to be made by the Department is still subject to the pending proceedings with DRT, Mumbai, where number of claimants appear to staked their claims against M/s.VFL and therefore, unless those litigations come to an end, thereafter only recovery of the actual amount from M/s.VFL will be possible and depending upon extent of recovery made in the instant case, final reward can be passed. 8. Shri Oza, on the point of issuance of writ of mandamus, relied upon the judgment of the Hon'ble Apex Court in the case of Union of India vs, C. Krishna Reddy, reported in 2004 (163) ELT, 4 (SC). He drew our attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance. (See Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh, AIR (1977) SC 2149 para 15; Lekharj Satram Dass Lalvani v. Deputy Custodian-cum-Managing Officer, AIR (1966) SC 334 and Dr. Umakant Saran v. State of Bihar, AIR (1973) SC 964. 9. Shri Oza also drew our attention to judgment of this Court in case of D.D.Gandhi Vs. Union of India, reported in 2011 (273) ELT, 491 (Guj.), which also held a similar view. In the said judgment, relying upon the judgment in case of C.Krishna Reddy (supra), it was held as under:- 7. Though learned advocates have argued the matter at length, we propose to decide this petition on certain relevant issues such as, (i). whether there is any failure on the part of the officer to discharge any statutory obligation, and (ii). Whether grant of reward is ex-gratia, (iii). whether there is any vested right on the informant to claim reward, and (iv). Whether a writ petition would lie in the facts and circumstances of the case. 8. The Apex Court in the case of D.G, REVENUE IN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of mandamus, therefore, cannot be issued in the matter. 11. In view of the aforesaid settled position of law, we do not intend to undertake the futile exercise of dealing with each and every judgment cited before us by learned advocate for the petitioner. 12. In view of a catena of decisions of the Apex Court and well settled position of law, grant of reward is an ex gratia payment and there is no vested right in any person to claim a reward as a matter of right. The respondents in the instant case were not performing any statutory duty imposed upon them and, therefore, it cannot be said that there is failure on their part to discharge any statutory obligation warranting exercise of writ jurisdiction to compel performance of such duties prescribed by any statute. The policy of reward is only a 'scheme' and not a 'statute'. 10. Learned Advocate Shri Ravani appearing for respondent Nos.2 and 4, while adopting the submissions of learned Senior Advocate Shri Oza further contended that the amount paid through utilizing cenvat credit cannot be equated with the amount recovered out of net sale proceeds and the contraband goods seized and/or amount of duty evade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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