TMI Blog2017 (5) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... this has come to light only because the Petitioner has approached this Court. This practice is perhaps being adopted in a number of instances which are yet to come to the notice of the Court. There will be serious ramifications if this practice is allowed to continue unchecked. In the first place, it must be realised that the officers of the Anti Evasion Wing of the Central Excise Department have to function within the four corners of the law. They are bound by not only the CE Act and the Rules made thereunder but all the notifications/circulars/instructions issued from time to time including those issued by the CBEC. There is no scope at all to collect duty and that too without even quantifying the extent of duty evasion. The Court would like the matter to be carried out to its logical conclusion - the writ petition is kept pending to ensure compliance of the directions mentioned. - W.P.(C) 3070/2017 & CM No. 13393/2017 - - - Dated:- 15-5-2017 - S. MURALIDHAR CHANDER SHEKHAR JJ. Petitioner Through: Mr. Priyadarshi Manish with Ms.Anjali Jha Manish, Mr. Sagar Rohtagi and Mr. Ashutosh Mishra, Advocates. Respondents Through: Mr. Harpreet Singh, Senior Standing Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2017. 4. There is a note dated 14th March, 2017 in the file titled Visit to M/s. Digipro Import and Export Pvt. Ltd. Inter alia it records that during the course of the visit a statement was made by the Director of Digipro, Mr. Rohit Jain, which has also been placed on file. What is of immediate relevance is that it is recorded in the note that there was a purported admission by Mr. Jain that above notification exemption was not applicable in their case. The note states that Shri Rohit Jain was ready to deposit the differential duty of 10.5% as they had short-paid the duty on all the clearances of mobile phone battery. Accepting his offence, he voluntarily tendered five undated cheques towards their duty liability amounting to ₹ 1,25,00,000/- as detailed below: Sl.No. Cheque No. Amount (in Rs.) 1. 691099 20,00,000/- 2. 691100 25,00,000/- 3. 691101 25,00,000/- 4. 691102 25,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexures P-6 and P-7. The panchnama enclosed with the petition tallies with what is there in the file. 8. The Petitioner states that its representative went along with its counsel to meet the Commissioner of Central Excise, Delhi-II on 27th March, 2017. They handed over to him a representation dated 21st March, 2017 explaining why the Petitioner was entitled to Exemption Notification No. 1/2011-CE dated 1st March, 2011. They also handed over to the Commissioner a copy of the Circular/Instruction of the Central Board of Excise and Customs (CBEC) bearing No. F.No.528/2/2008-Cus (TU) dated 6th February, 2009 which purportedly stated that the battery pack being part of cellular/mobile phone are eligible for exemption. When the note dated 14th March, 2017 was put up before the ADC, he issued three instructions: (i) Please realise the cheques early. (ii) Please quantify duty liability (iii) Please put up file as soon as cheque is realised. 9. A summons was issued to the Petitioner on 29th March, 2017. On 30th March, 2017 the Petitioner s counsel requested the Department not to encash the cheques claiming to have rightly availed of the benefit of exemption notification in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Department. 7. Liston 8th May, 2017. 8. Till the next date, no coercive action will be taken against the Petitioner. 9. Dasti, under the signature of the Court Master. 11. At the hearing on 8th May, 2017, the five cheques were brought to the Court. They were asked to be brought on the next date and the interim order was continued. 12. Pursuant to the above orders, an affidavit dated 1st May, 2017 has been filed by the ADC seeking to explain the collection by the officers of the Department of the undated cheques as under: 7. That, it is further respectfully submitted, at the time of tendering the cheques, the petitioner requested for some time for making good the payment and stated that since he is not having sufficient balance/funds with him at that point of time, therefore, he requested that the cheques may not be presented immediately and assured that within a very short period of time he would clear his statutory duty liability. The petitioner, therefore, requested that no date may be put on the cheques and as and when the petitioner would have sufficient balance, he would inform the deponent and accordingly the deponent may encash these cheques. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings under the Delhi Value Added Tax Act, 2004 ( DVAT Act ) as well as the Finance Act, 1994. The Court has in a detailed judgment in Capri Bathaid Private Limited v. Commissioner of Trade Taxes 2016 (155) DRJ 526 held that: by no means does Section 87 (6) of the DVAT Act enable the officers who undertake a search and seizure operation under Section 60 of DVAT Act to collect tax dues on the spot from the dealers whose premises are searched. This is wholly impermissible in law and will lead to unhealthy practice of arm-twisting a dealer into parting with alleged tax dues without there even being an order of assessment. The tax demand crystallises only upon an assessment. In any event, even if a dealer volunteers to deposit the disputed tax amount, he should be asked to deposit the said amount in the counter designated for that purpose. There is no question of the members of the search team collecting such payment. The CVAT should issue clear instructions in this regard. It should also be made clear that if any of the officers of the DT T are found violating the instruction, they would be subject to disciplinary proceedings. 16. In that case again while directing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had carried on a search/seizure exercise on the assessee without any proper authorization by the Competent Authority and had further proceeded to reverse the ITC availed by the assessee. The issues which had arisen in the said case may not be relevant in the facts of the present case. In the facts of the present case, the team of the Anti Evasion department were duly authorized by the deponent being the Additional Commissioner and empowered in this regard and the cheques handed over by the petitioner have still not been encashed as the petitioner had time and again requested for some time to arrange for the duty amount. Further the said cheques were handed over voluntarily in the wake of circumstances which have been explained supra. Thus, there was no action on part of the department which can be said to be lacking of any authorization by the Competent Authority. 18. The Court rejects the attempts of the ADC to distinguish the above judgment on the ground that the search and seizure operation in the above case under the DVAT Act was without authorisation whereas in the present case it was duly authorised. The ADC is obviously missing the point. The ADC has been unable to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down anywhere, the unscrupulous officers who constitute the survey/search team can 'negotiate' an amount of evaded duty and also agree to waiver of interest and penalty. This is without quantification and without a SCN. The duty evader gets away with a lighter amount and this is prejudicial to the interest of the Revenue. The second scenario is where an Assessee refuses to comply with an illegal demand and under threat and coercion is compelled to issue cheques or pay cash which is supposed to constitute the differential duty. This is undoubtedly prejudicial to the Assessee and is harmful to public interest. It is not rule of law but anarchy unleashed by holders of public office. Neither is it an acceptable scenario in a system governed by the rule of law. It metamorphises into a system of rule by law and, worse still, by abuse of law. It has to be stopped. 21. The Court would like the matter to be carried out to its logical conclusion. The cheques brought to the Court are directed to be kept in a sealed cover with the Registrar General of this Court. The Court would like the Commissioner of Central Excise, Delhi-II to personally file an affidavit in this Court in lig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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