IGH COURT OF CHHATTISVGARH ‘BILASPUR ———————_J‘ WRIT PETITION (T)7No‘.7230 of 2009 s MSP Ste‘el/Va'nd power Ltd., Vs. Union of India and others Pst for 1-3 .201 o 020 L Sd/L i Sunil Kumar Sinha \r Jude \ H M/ I g H Sngle ench: ' on’ble hri SUniI Kumar Sinha J. i B H S WRIT PETITION (T) No. 7230 of 2009 PETITIONéR M/s. MSP Steel and Power Ltd., a Company registered under Company Registration Act, Through its. authorized signatory ‘Shri Sandeep Agrawai, S/o Late Shri M.L.‘ Chokhani, *aged about 40 years, At Manuapaiii, Village, Jamgaon,’ District Raigarh, Chhattisgarh Versus ‘Union of India through Secretary the Ministry ‘of Finance Department of Revenue, North Block, New Delhi — 110 001. RESPONDENTS The Member (Central Exercise), Central Board of Excise & Customs, Govt. of India, Ministry of Finance Department of Revenue, New Delh 10001 ' The Chief Commissioner, Customs & Central Excise (Bhopal Zone) 48 Administrative” -,Area, Arera 'Hms,’ Hoshangabad’Road, Bhopal 462 011, Madhya Pradesh. (The Commissioner, Central Excise & Customs, Central Excise Building, ,Dhamtari Road, Tikrapara, Raipur, Chhattisgarh WRIT PETITION UNDER ARTILCE 226 OF THE CONSTITUTION O INDIA Appearance: Mr. ‘Sanjay Agrawai, counsel forthe'. petitioner. Mr. Bhishma Kinger, counsel for the respondents. HIGH COURT OF CHHATTISGARH BILASPUR . i 1 ‘ F 2 W.P(T) No.7230 of 2009 ORDER (23.02.201 0) by li Folowng order of the‘Court was delivered unil umar Sinha M/s. MSP Steel and Power Ltd., Manuapalli, village Jamgaon, aigarh, Chhattisgarh' hereinafter referre to as the R ( d Petitioner/Assessee) has filed this petition challengingthe vaiidity of rder dated‘26‘h of November, 2009’(Annexure P—1) passed by- respondent no.2 whereby te said'respondent imposed the foilowing h estrictions on the petitioner/assessee on account of prima facie satisfaction about the default in payme‘nt of duty by the assessee. (i) he facility of monthiy payment of excise duty by ’ M/s. MSP Steelia‘nd Power Ltd., Chhattisgarh, as provided under‘ rule 8(1) of the Central “Excise Rules, 2002, is ordered to be withdrawn and they‘ are required to pay eXCIse duty for each‘ conSIgnment at the time of removal of the goods With effect from 01 12 2009 to 28 02 2010 (ii) Payment of exotse duty by utilization of CENVAT' credit as prowded under rule 3(4) of the CENVAT: e Credit Rules 2004 Is ordered to be stopped With effect from 01 12 2009 to 28 02 2010 During this period they are reqwred to pay excrse duty Without) utiliZing CENVAT credit V However they are permitted to take CENVAT credit during this period which can be utilized for payment of duty after the) aforesaid period is over (iii) The assessee Will maintain records of receipt disposal consumption and inventory of the prinCIpal inputs on which Cenvat Credit has not been taken With effect from 01 12 2009 to 31 O1 2010 'The assessee ‘ will intimate the jurisdictinal Superintendent of Central EXCIse Within twenty four hours of the receipt of prinCipal inputs in the factory on which Cenvat credit has or has not been taken and the same should be kept available for verification for the next 48 hours This restriction Will i > be applicable for the period from O1 122009 to 31 0 2 (iV) S K J. o r T o 1 010 3 W.P(T) No.7230 of 2009 (2) The facts, briefly stated, are as under: The petitioner/assessee is engaged in manufacture of Sponge Iron, MS. Billets and TMT Bars. The Officers of Central Excise visited the factory premises of the ‘assessee on 17.02.2009. On verification, they found certain irregularities in daily stock account relating to opening baiance quantity, quantity manufactured, quantity removed for home/captive consumption etc. They also found that closing balance were ‘made by pencil. The physical verification revealed a shortage of 21.53 MT ‘O TMT Bars. The assessee readily paid a sum of‘ Rs.59,175/- towards duty liability. The authorities found that there was suppressionof production of 491;.18MT of TMT bars, 230 MT of MS Billet and‘1291.5 MT of Sponge Iron involving a total duty of about Rs.56 Iakhs. They found that the said items were cleared without invoice and without payment of duty. According to the authorities, they prima facie came to the conclusion that the petitioner/assessee willfully indulged in clearance of'goods without invoice and withou payment of duty. It is onthis account, a proposal was received by the Chief- Corrimissioner, Bhopal, for initiating an action under Notification No.32/2006-CE(NT) dated 30122006., The authorized representative of. the petitioner/assessee attended the personal hearing befor the Chief Commissioner on 18.03.2009. A‘ written‘ submission dated 6.03.2009 was also filed. The Chie Commissioner, Bhopal, made a proposal to respondent no.2. Respondent no.2 after, considering the facts and circumstances, recorded, his satisfaction and thereafter held that prima-facie the petitioner/assessee was knowingly involved in committing the offence as specified in clause (a) of para 1 of the above notincation and th mpugned order dated 26th of November, 2009 was passed. f t " e f e i W$ 4 W‘P(T) No.7230 0f2009 I . (3) Mr.'Sanjay K. Agrawal, learned counsel appearing on behalf of the petitioner/aSsessee argued that the impugned order has been passed in utmost violation of fundamentai principles of natural justice as no opportunity‘of hearing was granted to the petitioner/assessee before passing thelsaid order. He also argued that restriction (iii) and ’(iv) contained in the order are without jurisdiction as such restrictions were brought in paragraph 2 of the aforesaid notification dated - 30.12.2006 (Scheme) videnotification dated 10th of June, 2009, ‘therefore, admittedly they were not in the proposal which was sent by the Chief Commissioner, Bhopal, in the month of March, 2009 and ‘ imposition of such restrictions which were not in proposal were without jurisdiction. (4) On the other hand, Mr. Bhishma Kinger, learned counsel appearing on behalf of the respondents Opposed these arguments and supported the order dated 26th of November, 2009. He also argued that the aforesaid order passed by the member of the Board was appealable u/s 35-B(1)(c) of the Central Excise Act, 1944, therefore, the petitioner has efficacious alternative remedy and the writ petition , should be dismissed. ‘(5) i have heard the learned'counsel for the parties at l‘ength and k have also perUSed the records ofithe writ petition. _(6) vClause- 4 of the Notitication‘ referred to’above provides for , procedure. ‘ Sub-clause (2) ofIClause .4 provides that the Chief Commissioner of Central Excise or‘DirectOr General of Central Excise '1 ' ntelligence, as‘the oase may be, shall examine the said proposal and _ _ . I . t ‘ 5 W.P(T) No.7230 of2009 after satisfying himself that the récords and'evidence relied upon in the said proposal are sufficient to form a reasonable belief that a person has knowingly committed the offences specified in para 1, may fonlvard the proposal alongwithhis recommendations to the Board. However, the Chief Commissioner of Central Excise or Director General of , Central Excise Intelligence, before fonNarding his recommendations, shall give an opportunity of being heard to the person against whom I, the proceedings have been initiated and shall take into account any representation made by such person before he fonNards his recommendations to the Board. (7) l find from the contents of the order dated 26‘“ of November, ' 2009 that the Head of Finance and Accounts of the petitioner/assessee company had attended the personal hearing before the Chief . Commissioner on 18.03.2009 and he had also filed written submissions dated 16.03.2009; i also find that respondent no.2 has ‘ recorded in para 4 of the order that some Advocate on behalf of the I Assessee has also participated in the‘ personal hearing and he was allowed to make submissions. Therefore, the petitioner/assessee was given due opportunity ofhearing as per sub-clause (2) of Clause‘4 of (the Notification and it cannot be said that the impugned order was passed without observance of the principals of natural justice. Therefore, the arguments raised in this behalf cannot be accepted. (8) So far as the arguments relating to imposition of restrictions" (iii) ‘ and (iv) are concerned, the said restrictions were already incorporated ‘in the notification under clause 2(1) (iii) & (iv) vide subsequent notification dated 10‘“ of June, 2009, whereas the impugned-order was 5) 6 . ‘ W.P(T) No.7230 of 2009 ) jpasse‘d on 26‘“ of November, 2009. i do not find any provision in the V 'fScheme saying that the proposals made by the concerned authority in V reiation to imposition of restrictions or withdrawal of facilities, ifany,’ /:would be binding on‘kthe Board or the Member of the Boardkwhiie exercising jurisdiction under the notification for taking deterrent action giagainst the tax evaders. In the opinion of this VCourt, if the above §§restrictions were already there since 10th of June, 2009, i.e; prior to iipassing of the impugned order dated 26.1 1.2009, respondent nozf2 was Erha‘ving full jurisdiction to impose-such restrictions also, notwithstanding I ithe fact that they were mentioned in‘the proposal of the Chief , ,Commissioner, Bhopal or not. in absence of any clause restraining from making notified restrictions on the proposal made by the Chief ‘ICommissioner,Ithe aforesaid restrictions cannot be said‘to begiwithout ‘ jurisdiction. { (9y irurther notice that the maximum periodof restrictions (i) and (ii) - already elapsed On 31.01.2010. The petitioner has challenged the aforesaid order by filing this petitioh on 08.12.2009. and no interim order was granted in fayour of the petitioner till date. Therefore, the entire period of restrictions has nearly elapsed. (10) For the foregoing reasons, i do not find any substanCe in' the petition. The petition is liable to be dismissed and is hereby dismissed. (11) .There shall be no order as to costs. is upto 28.02.2010 and the period of restrictions (iii) and (iv) has * v x