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Dinesh Arvindbhai Padaria Versus Union of India

2016 (9) TMI 523 - GUJARAT HIGH COURT

Claim of reward - information given to Department - raid carried on, on the basis of information of informer - excise duty evasion by one VFL - Polyester staple fiber - clandestine removal without payment of duty - O-41 register - CENVAT credit - Held that: - the Rewards Committee has not adverted to various factors which are required to be taken into consideration by the Rewards Committee for coming to the conclusion qua the informant's entitlement to receive reward and the quantum, the Rewards .....

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e scheme, calls upon the Rewards Committee to take a decision on the final reward 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 concern .....

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OGJE) 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 claiming reward to which he is entitled to for the information given by him to the Department. 2. The facts in brief necessary for disposal of this petition are as under:- 2.1 The petitioner gave a secret information to the officer of Director General .....

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authorities, whereby demand of ₹ 9,92,31,857/- was raised and upon adjudication, was confirmed by the adjudicating authority. The confirmation of duty was challenged by VFL before the CESTAT. However, such appeal came to be dismissed and hence, demand of duty adjudicated has attained finality. 2.3 The petitioner-informer has received an amount of ₹ 1,00,000/- as advance reward for the information. 2.4 The case of the petitioner for receiving the final reward on the basis of the adju .....

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month of June-99, August-99, and October-99 and had paid duty amounting to ₹ 1,21,870/- through PLA and ₹ 8,47,942/- through Cenvat account during this period. The Committee further noted that after debiting ₹ 23,60,118/- from their RG 23C Pt. II on 27.03.2000, the unit operated only in the month of April-2000 and May-2000 and paid duty amounting to ₹ 51,676/- only through PLA and ₹ 6,74,619/- through their Cenvat account during this period. The unit is closed sinc .....

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his 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 c .....

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petition praying inter alia as under:- ii. Your Lordship may be pleased to issue writ of certiorari and/or writ in the nature of certiorari or any other writ, order and direction by quashing and setting aside the impugned decision of the Rewards Committee dated 19.12.2011 at Annexure-D to this petition; iii. Your Lordship may be pleased to issue a writ of Mandamus, or writ in the nature of Mandamus or any other appropriate writ, order or direction, directing the respondents to : a. Withdraw and/ .....

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2002 against M/s VFL 3. In support of his contention, learned Advocate Shri Chhabaria for the petitioner submitted that the decision of the Rewards Committee is not in consonance with the scheme. He submitted that once the adjudication is concluded, the petitioner was entitled to receive the reward under the scheme. He submitted that though the scheme envisages payment of reward on the basis of recovery made, in view of the communication, he would submit that the adjudicating authority in an ord .....

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-work, under Section 11A of the Central Excise Act, 1944. M/s.VFL has already paid Central Excise duty amounting to ₹ 1,15,60,118/-. I confirm and appropriate the same and order M/s.VFL to pay the remaining 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 t .....

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fically 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 proposition that the scheme envisages payment of the reward only on the basis of the amount recovered i .....

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eligible for reward upto 20% of the net saleproceeds of the contraband goods seized and/or amount of duty evaded plus amount of fine and penalty levied /imposed and recovered. However, in respect of gold, silver, opium and other narcotic drugs etc. seized under the provisions of the Customs Act, 1962 /Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985, the overall ceiling of reward will be as per specific rates indicated in the Annexure. These ceilings would be subject to periodical rev .....

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the authority competent to grant reward will keep in mind the specificity and accuracy of the information, the risk and trouble undertaken, the extent and nature of the help rendered by the informer, whether information gives clues to persons involved in smuggling, or their associates etc., the risk involved for the Govt. Servants in working out the case, the difficulty in securing the information, the extent to which the vigilance of the staff led to the seizure, special initiative, efforts an .....

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g 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/i .....

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le, i.e. advance and final reward put together, will not exceed 20% of the net sale proceeds (if any) plus amount of additional duty, fine/penalty recovered or the amount of drawback fraudulently claimed recovered, as the case may be. This will also be subject to instructions in para 4.3 above as regards rewards to Govt. Servants is concerned. The advance/interim reward sanctioned and disbursed, if any, shall be adjusted from the final reward to be paid to the officers/informers. 9. REVIEW OF FI .....

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his effect, the Govt. may review the final reward sanctioned on the specific recommendations of the Board. 13. UNDERTAKING BY THE INFORMER At the time when an informer furnishes any information or documents, an undertaking should be taken from the informer that he/she is aware that the extent of the reward depends on the precision of the information furnished by him/her; that the provisions of Section 82 of the Indian Penal Code have been read by and/or explained to him/her; that he/she is aware .....

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reward upto 20% of the net sale proceeds of the seized/confiscated goods, (if any) and/or the amount of additional duty/penalty/redemption fine recovered and that the amount of reward to be sanctioned to the informer, will purely depend on the specificity & accuracy of the information & other dependent factors, as indicated in para 5.1 of these guidelines. 7. On the basis of the Reward Scheme, Shri Oza submitted that the instance of giving final reward would only come into existence on .....

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he 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 Redd .....

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tion gives clues of the persons involved in smuggling or their associates, the difficulty in securing the information, the risk involved for the government servants in working out the case and whether apart from seizure of contraband goods, the owners/organisers/ financiers/racketeers have been apprehended. The scheme further mentions that reward is an ex-gratia payment and subject to the guidelines and may be granted on the absolute discretion of the authority competent and further that no one .....

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. If the grant of reward cannot be claimed as a matter of right it is not understandable as to how a Writ of Mandamus can be issued commanding the Government to give a particular amount by way of reward. Though this specific plea was taken in paras 18 and 21 of the counter affidavit, yet neither the learned Single Judge nor the Division Bench adverted to this aspect of the matter. 13. It is well settled by a catena of decisions of this Court that a Writ of Mandamus can be granted only in a case .....

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ch 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, .....

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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 INTELLIGENCE & INVEST. Versus AMRIT LAL MEHTA reported in 2007 (220) ELT 9 (SC) has held as under in paragraph 7 of the judgment: 7. However, considering the fact that it has been held by this Court in the cases of Union of India & Ors. v. C. Krishna Redy reported in [(2003) 10 SCALE 1050] as well as in Union of India v. R. Padmanabham reported in .....

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x Court held as under: 13. It is well settled by a catena of decisions of this Court that a Writ of Mandamus can be granted only in case where there is a statutory duty imposed upon the officer concerned and there is failure on the part of the officer to discharge the statutory obligation. The chief function of the writ is to compel performance of public duties prescribed by statute and to keep subordinate tribunals and officers exercising public functions within the limit of their jurisdiction. .....

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4. By the very nature of things, no one has a legal right to claim a reward. The scheme itself shows that it is purely an ex-gratia payment subject to guidelines and may be granted on the absolute discretion of the competent authority and cannot be claimed by anyone as a matter of right. xxx xxx 10. In the facts of the present case, the respondents were not performing any statutory duty imposed upon them and therefore it cannot be said that there is failure on the part of the officer to discharg .....

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t. 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 S .....

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cenvat credit and not actual recovery. Therefore, the claim of the petitioner to 20% of the amount referred hereinabove and adjudicated by the adjudicating authority cannot be taken into consideration for the purpose of the scheme. 11. Taking into consideration the rival submissions of the parties, the order impugned in this petition, if examined in light of the submissions for impugned award to the informant, we are of the considered view that as the Rewards Committee has not adverted to variou .....

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and hence, the Rewards Committee will have to take afresh look into the matter. We hastened to add here that therefore, without recording our view on the rival submissions, we deem it fit to direct the Rewards Committee for arriving its own conclusion after affording proper opportunity to the concerned. It shall record its reasons, keeping in mind the ingredients to be considered for examining the entitlement of the informant and quantum to be awarded. We once again clarify that we are not opini .....

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