Court quashes order, directs de-sealing. Upholds appointment authority, dismisses lack of jurisdiction.

The court allowed W.P. No.23618/2021, quashing the impugned order and directing the de-sealing of machines and DG sets. The court dismissed W.P. No.23624/2021, upholding the respondents' authority to appoint chartered engineers. The court emphasized the respondents' lack of jurisdiction in indefinitely sealing the machines and highlighted the resultant business and revenue losses.

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Issues Involved:
1. Legality of the respondents' refusal to de-seal cigarette manufacturing machines and DG sets.
2. Validity of Trade Notice dated 18.01.2021.
3. Authority of respondents to appoint a panel of chartered engineers for verification of production capacity.
4. Alleged violation of Articles 14, 19(1)(g), and 21 of the Constitution of India.

Detailed Analysis:

1. Legality of the Respondents' Refusal to De-seal Cigarette Manufacturing Machines and DG Sets:

The petitioner challenged the order dated 27.05.2021, where respondents refused to de-seal cigarette manufacturing machines and DG sets. The petitioner argued that there is no provision under the Central Excise Act or GST Act for keeping the machines sealed indefinitely. The respondents justified their action based on Trade Notice No.02/2015, which mandates sealing machines operating below 50% capacity. However, the court found that the Trade Notice only allows sealing between production shifts and does not authorize indefinite sealing. The court concluded that the respondents' action was illegal and beyond their jurisdiction, directing the immediate de-sealing of the machines and DG sets.

2. Validity of Trade Notice Dated 18.01.2021:

The petitioner contended that Clause 6.3 of the Trade Notice dated 18.01.2021, which requires machines to operate at least 50% of their capacity, is unreasonable and inconsistent with the Central Excise Act and Rules. The court agreed, stating that production depends on market demand and other factors, and there is no statutory provision compelling manufacturers to operate machines at a specific capacity. The court struck down Clause 6.3, deeming it inconsistent with the Central Excise Act and Rules.

3. Authority of Respondents to Appoint a Panel of Chartered Engineers for Verification of Production Capacity:

The petitioner also challenged the respondents' action of appointing chartered engineers to verify the production capacity of machines. The court noted that Section 145 of the GST Act allows authorities to seek expert opinions. Therefore, the court dismissed the petition challenging the appointment of chartered engineers, finding it within the respondents' authority.

4. Alleged Violation of Articles 14, 19(1)(g), and 21 of the Constitution of India:

The petitioner argued that the respondents' actions violated their fundamental rights under Articles 14, 19(1)(g), and 21 of the Constitution. The court acknowledged that the indefinite sealing of machines deprived the petitioner of their right to conduct business, causing significant business loss and loss of revenue to the government. The court directed the respondents to de-seal the machines and DG sets and awarded costs of Rs. 50,000 to the petitioner, emphasizing the need for appropriate action against responsible officers for the loss of revenue to the government.

Conclusion:

The court allowed W.P. No.23618/2021, quashing the impugned order and directing the de-sealing of machines and DG sets. The court dismissed W.P. No.23624/2021, upholding the respondents' authority to appoint chartered engineers. The court emphasized the respondents' lack of jurisdiction in indefinitely sealing the machines and highlighted the resultant business and revenue losses.

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