TMI Blog2022 (12) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... .11.2022 and secondly, the statement of the applicant/accused. Surprisingly, even though, the report was given by the chemist on 02.11.2022, that is even before the arrest of the accused, the Department made no further attempt to seek an opinion from another lab on the subject. Rather, the Department chose to arrest the accused and even after the arrest and up till today the samples have not been sent to any other lab to seek answer to query no. 2 and 3 raised by the IO as far as back on 19.10.2022. The Department seems content with the assumed position that Tobacco was not used in the smoking mixture, which assumption is in the teeth of the inconclusive opinion given by the chemist on 02.11.2022 - Why the Department chose not to send the samples to another lab seeking answers to query no. 2 and 3 when the accused is languishing in Jail, that too, in the clear absence of any opinion on the presence of Nicotine and Tobacco in the product? The benefit of this serious lapse in the investigation has to be given to the accused at this stage. In view of the discussion pertaining to the assumption of the Department regarding non use of Tobacco as a input, even though the report of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn version, the intercepted consignment could have led to claim of Rs.19,95,32,076/. 4. It is claimed that after the refund of Rs.200 Crores was availed by M/s Harsha International, the said amount was transferred to the bank account of M/s Radiant Traders and therefore, in effect, it is the M/s Radiant Traders, who is running the entire show. 5. It is an admitted position that the present accused had voluntarily visited the Department to join investigation and given a statement on 24.11.2022. After the statement was recorded, he was arrested on 25.11.2022. 6. The Ld. Counsel for the applicant/accused submits that accused should be treated as in custody from 24.11.2022 itself, I need not delve into the said issue, at this stage, as I am not calculating the period of custody for the purposes of statutory bail. 7. It is next submitted by the counsel for accused that ever since his arrest on 25.11.2022, the accused was not subjected to any custodial interrogation by the Department. Further, till date, the Department has not even visited the Jail to question or interrogate the accused whilst in JC. His custody, therefore, seems to be purely preventive as far as investigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i.e. inward supplied of Cigarettes) have not been utilized for furtherance of business (i.e . manufacture and supply of Smoking Mixture) but the Input Tax Credit (ITC) to the tune of Rs.218 Crore associated with such inward supplies of Cigarettes was availed by the applicant only for passing on the same ITC fraudulently to its buyer (exporter), who in turn utilized the said ITC for and had claimed fraudulent refund of IGST and Cess to the tune of Rs.200 Crore. 10. In view of the aforesaid stand, I had put it to the Department that if there was any inward supply of cigarettes, the purchase of which is properly documented, and there is no break in the chain of documents showing alleged supply of cigarettes, how the Department can conclude that the Tobacco from the cigarettes was never used in manufacturing the smoking mixture? 11. In response, counsel for the Department submitted that it seems that the cigarettes were sold in the local market without any invoicing and the same also stands admitted by the accused in his statement recorded by the Department. Further, he submits that non utilization of Tobacco from cigarettes is, prima facie, proved by the Laboratory Test rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained for want of testing facility. Sealed remnant sample returned herewith. (Emphasis supplied) 15. Sadly, based on this inconclusive opinion of the chemist, the chemical examiner has given his opinion regarding the product not meeting the standard for Tobacco and Tobacco products smoking mixture. But the Department seems to have gone further ahead and assumed the position that Tobacco from cigarettes was never used and either there was no actual purchase of cigarettes or in the alternative the cigarettes were sold in the gray market. To support the conclusion so arrived at, the Department has claimed in para 8 and 34 and I quote again: The Input Tax Credit was shown to be received by the applicant on the basis of procurement of Cigarettes, which they have shown to be used as raw material for manufacture of their finished product i.e. Smoking Mixture, which is neither economically viable nor technically feasible and the test report also confirmed that the goods declared as Smoking mixture was spurious goods and not fit for human consumption. It appears that the goods (i.e. inward supplied of Cigarettes) have not been utilized for furtherance of business (i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of speech must always be, on the whole, advantageous to the state; for it is highly conducive to the interests of the community that each individual should enjoy a liberty, perfectly unlimited, of expressing his sentiments. It should be noted that the premiss is not logically irrelevant to the truth of the conclusion, for if the premiss is true, the conclusion must be true also since it is the same proposition. But the premiss is logically irrelevant to the purpose of proving or establishing the conclusion. If the proposition is acceptable without argument, no argument is needed to establish it; and if the proposition is not acceptable without argument, then no argument that requires its acceptance as a premiss could possibly lead one to accept its conclusion. In any such argument the conclusion asserts only what was asserted in the premisses, and hence the argument, though perfectly valid, is utterly incapable of establishing the truth of its conclusion. Sometimes a chain of several arguments is used in attempting to establish a conclusion. Thus one may argue that Shakespeare is a greater writer than Robbins because people with good taste in literature prefer Shakespe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect. It has been further stated that the offence alleged is compoundable and court must take note of that fact. 23. Ld. Counsel for the Department has submitted that the decision in Make My Trip Vs. Union of India was challenged by the Department in the Hon ble Supreme Court of India but the challenge did not yield any fruit and he further submits that even though the Division Bench decision has not been disturbed by the Hon ble Supreme Court of India, he tried to distinguish the said case by submitting that the said matter pertained to service tax. 24. Secondly, he has stated that after passing of the said judgment by the Delhi High Court, the Punjab Haryana High Court was seized with a CGST matter, in which reliance was placed upon the decision of Delhi High Court in Make My Trip (Supra) by the Punjab Haryana High Court and similar order was passed, which order was challenged by the Department before Hon ble Supreme Court of India and notice has been issued in the SLP. 25. Ld. Counsel for the Department further submits that after the passing of the judgment by the Punjab Haryana High Court, the issue again came up before the Telangana High Court. The Telangana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions are subjected to scrutiny at various levels and even importers seek adherence to agreed specific standards and products are subjected to quality control and checks. What applies to a part in presenti, cannot be ipso facto extended to the whole as also to what may have transpired in the past. 31. Therefore, in view of the discussion hereinabove pertaining to the assumption of the Department regarding non use of Tobacco as a input, even though the report of the chemical examiner being inconclusive on the presence of nicotine and tobacco for want of testing facility, the period already undergone by accused in JC and want of any evidence other than the statement of the accused and the aforesaid discussion, the accused is admitted to bail on furnishing bail bonds/surety bonds in the sum of Rs.10,00,000/with one surety of like amount to the satisfaction of the concerned Ld. MM/Duty MM and also subject to the following conditions: 1. Accused shall not leave the country without prior permission of this court; 2. Accused shall deposit his passport with the IO; 3. Accused shall give prior intimation to the IO on his mobile phone before leaving the NCR for any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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