TMI Blog2008 (10) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr. Advocate with Akshay Bhan, Advocate, for the Petitioners. S/Shri Ashwini Bansal, Standing Counsel, Satish Aggarwal, Advocate with Ms. Mala Sharma, Advocate, for the Respondent. [Order] - This petition seeks quashing of search and seizure conducted by respondent No.2 Commissioner of Central Excise and for a direction to refund a sum of Rs.1,,10,75,019/- deposited by the petitioners under the threat of arrest. Further prayer is for return of the records of the petitioners. Prayer has also been made for not taking any coercive action of arrest or detention against the petitioners and his employees. 2. Case of the petitioner-firm is that it manufactured Aluminum and Zinc Alloy Ingots falling under Chapter Heading Nos.76 and 79 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f alluminium ingot manufacturing), (d) unaccounted diversion of finished goods and unaccounted use and (e) sale of other metals recovered from imported inputs." 6. It has further been stated that Shri Mayank Pareek admitted the facts that there was shortage of finished goods and that CENVAT credit has been taken wrongly. Further stand of the respondents vide letter dated 17.6.2008 (Annexure R-2) is that copies of most of the documents were already with the petitioners. The respondents advised the petitioners to furnish R-11 bond for value of seized goods with security of 25% of the face value by way of Fixed Deposit or bank guarantee. As regards the return of money, stand of the respondents is that the petitioners made the deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Dross which was held to be not excisable in the judgment of Hon'ble the Supreme Court in Commission of Central excise v. Indian Aluminium Co. Ltd. [2006] (203) E.L.T. 3 (S.C.) = 2006 (8) S.C.C. 314 was made excisable by amendment to the Central Excise Tariff Act, 1985 w.e.f. 1.3.2005 by classifying the same under sub heading 2620 40 10. 10. Further contention is that applicability of Section 165 of Code of Criminal Procedure was qualitatively different under the scheme of the Act, which has been noticed in the judgment of the Hon'ble Supreme Court in R.S. Seth v. R.N. Sen AIR 1967 S.C. 1298. 11. The questions for consideration are whether the search and seizure was called for, whether the petitioners were entitled to ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require security to be furnished for the value of goods which normally will be very onerous condition. 15. Even though, we have not expressed any opinion on merits, we are required to go into question of reasonableness of conditions for provisional release in the background of facts on record. Allegation of the respondents from which inference of evasion of duty is sought to be drawn, relates to wrongful availment of Cenvatable inputs. 16. As regards omission to make entry of dross, the petitioner has pointed out that as per law laid down by the Hon'ble Supreme Court in Indian Alluminium (supra) 'dross' was not excisable item. According to the department, the same was excisable w.e.f 1.3.2005. The Hon'ble Supreme Court held that ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, P.6 and P.7 do not contain any allegation of diversion of finished goods. Only allegation in the said Panchnamas relates to non entry of 'dross' in the record and there being excess stock of raw material. There is nothing to show that any loss will be suffered by the revenue if the goods are released against undertaking of the petitioner to pay duty which may be found due as a result of investigation. It has also not been shown that for release of raw material, conditions of Bond B-11 are applicable. 17. Accordingly, we partly allow this petition and direct the respondent No.2 to forthwith return the amount deposited by the petitioners and to release the goods on furnishing undertaking in terms identical to the terms in Form B-11 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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