Supreme Court Orders Release of Seized Goods with Security

The Supreme Court directed the respondent to release seized goods upon furnishing cash security or bank guarantee for 25% of the value within four weeks, allowing the appeal to that extent. The Court found the High Court's premature final decision on the matter improper and beyond the writ petition's scope.

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Issues:
Challenge to order directing release of seized goods without cash security or bank guarantee.

Analysis:
The appeal challenged an order by the Punjab and Haryana High Court directing the release of seized goods upon furnishing an undertaking to pay any dues without cash security or bank guarantee. The respondent sought release of raw material seized by the Central Excise, Faridabad, and to quash the seizure letter. The respondent argued that under the Cenvat Credit Rules, only finished goods are excisable, and no duty evasion occurs until goods are manufactured and cleared. The appellant contended that the respondent showed low value addition, paid minimal duty, and discrepancies existed in stock registers, justifying confiscation under Rule 15 of the Cenvat Credit Rules.

The High Court, while not expressing an opinion on merits, directed the release of goods, prompting this appeal. The appellant argued that the High Court's approach was erroneous, while the respondent defended the order's validity. Reference was made to a previous case where the Court declined interference, but the appellant highlighted the issuance of two show-cause notices in the present matter. The High Court, in an interim order, made findings on merits, stating that the absence of goods in the computerized excel sheet did not warrant confiscation. However, the Court noted that the High Court exceeded its scope by making a final decision at that stage.

The Supreme Court directed the respondent to release goods upon furnishing cash security or bank guarantee for 25% of the value within four weeks, allowing the appeal to that extent. The Court found the High Court's premature final decision on the matter improper and beyond the writ petition's scope.

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