2015 (9) TMI 1149 - HC - Central Excise

Dismissal of Writ Appeal on Excise Duty Challenge; Reward Payment Granted Despite Inadequacy

Karthikeyan. T.K Versus The Commissioner of Central Excise & Customs, Calicut and others

The Court dismissed the writ appeal challenging orders by CESTAT on excise duty evasion, ruling the petitioner lacked standing. The petitioner's claim for ... Reward for disclosure of evasion of duty - Held that:- Petitioner was an employee of the said organization and he had given certain information regarding violation of the statutory provisions, by which, according to him, the company was not paying the excise duty for certain items, which were being manufactured in the company. According to the petitioner, it is pursuant to the said information that the Excise Department had conducted enquiry and taken appropriate steps in the matter. However, petitioner was dissatisfied with the orders passed by CESTAT in so far as according to him, the entire evasion has not been brought to the notice of the authorities concerned and the enquiry was not satisfactory. - Committee had gone into the claim of the petitioner and Annexure R1(a) minutes produced by the respondent authorities clearly indicates that the entire factual circumstances involved in the matter including the fact that the petitioner was the informer, who has given necessary information regarding the evasion, was taken into consideration and it was found that, as per the guidelines, it is possible for the Department to grant an ex-gratia payment and ₹ 5,00,000/- was fixed as the ex-gratia amount. Under such circumstances, we do not think that we will be justified in interfering with the said finding of the Committee at this stage of the proceedings. - No prima facie case in favour of assessee - Decided against appellant. Issues:Challenge to orders passed by CESTAT, Claim for reward payment, Locus standi of the petitioner, Proper consideration of reward amount.Analysis:Challenge to CESTAT Orders:The petitioner challenged the orders passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) regarding a company's excise duty evasion. The petitioner, an employee of the company, provided information on the evasion but was dissatisfied with CESTAT's findings, claiming that not all evasion was addressed adequately.Locus Standi of the Petitioner:The learned Single Judge ruled that the petitioner lacked the standing to challenge the orders as the dispute was between the Excise Department and the company. The petitioner's claim for an award amount was also not addressed by the Single Judge initially.Claim for Reward Payment:In a separate writ petition, the petitioner sought a reward for informing the Excise Department about the evasion. The Reward Committee, after considering the petitioner's claim and guidelines, granted an ex-gratia payment of Rs. 5,00,000 to the petitioner.Proper Consideration of Reward Amount:The petitioner contended that the reward amount was insufficient, highlighting the substantial evasion not adequately addressed by the Excise Department. However, the Court upheld the Committee's decision, stating that the petitioner's role as an informer and the guidelines were duly considered in determining the ex-gratia payment.In conclusion, the Court dismissed the writ appeal, stating that the petitioner did not establish grounds to challenge the Single Judge's decision. The Court upheld the Reward Committee's decision on the ex-gratia payment, emphasizing the consideration of factual circumstances and guidelines.