TaxTMI 
TaxTMI 
2015 (6) TMI 620
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....y and on the record they are conducting the business of this company. The petitioner and his two sons are living in the same premises situated in Jalna where the office of the company is also situated. 3. There was specific information to the officers of the Directorate General of Central Excise (Intelligence) Regional Unit Pune that aforesaid company was evading Central Excise Duty by not maintaining account of manufacturing of MS/TNT Bars and it was involved in clandestine removal of this product from the factory premises without payment of Central Excise duty. There was also information that this company was purchasing unaccounted MS ingots and billets for manufacturing of the aforesaid product. There was information that though this activity was not accounted in the returns, a separate record was prepared about the unaccounted manufacture, sale etc. of the aforesaid product and that record was available in the pen-drive and in the computer of the petitioner and his sons. 4. The officers of the Directorate General of the Central Excise and also the officers of Pune and Nasik Commissionorates took action and search of the premises by name "Shreyas", Ahimsa Marg, near Jain Templ....
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....ate paper record in respect of those transactions and those transactions were entered only in electronic record. There are statements of employees to the effect that they used to hand over cash directly to the present petitioner also. 9. Shailesh, aforesaid Director contended that Sushil was maintaining record. He showed readiness to pay Excise Duty if there was short payment. The company was formed in the year 2004 and Shailesh was Director of this company right from beginning. Sushil became Director from 2005-06. 10. The officers drew panchanama in presence of panch witnesses and the aforesaid material came to be seized. This panchanama is signed by Sushil as it was prepared in his presence. It was confirmed that the aforesaid transactions recorded in the computer and the pen drive were not shown in the returns submitted to the Excise Department. 11. It is the case of the officers of the Department that these two brothers did not cooperate during investigation and as they are not cooperating the statements of the employees of the factory were again recorded. The statements of persons from whom raw material was collected are recorded and the statements of the persons, concerns ....
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....f the duty. Similar undertaking is obtained from the petitioner. 15. The show cause notice issued by the Department against the petitioner and his sons, the purchasers of the finished material, persons who had sold the raw material without maintaining the account of raw material etc. show that the aforesaid material and other relevant material is mentioned in the show cause notice. There are allegations that this illegal activity was going on from 1-1-2009 to 7-3-2011. In the initial inquiry the value of the manufactured goods was shown as Rs. 132.71 crores but after making further inquiry it was ascertained that the value of manufactures goods was Rs. 143 crores and most of the goods were cleared without making payment of Duty. There is allegation that the Duty of more than Rs. 15.75 crore is not paid. In respect of shortage of the goods there will be charge of Excuse Duty of more than Rs. 11 lakh, there will be penalty which can be recovered under Rules 25 and 26. In the show cause notice it is mentioned that amount of Rs. 45 lakh is liable for confiscation under sections 121 and 124 of the Customs Act. 16. The record shows that search was made on 3-6-2011. As per the record, o....
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.... of Excise Act, one needs to keep in mind the provisions of the Customs Act mentioned in the Notification. Provision of section 105(1) of the Customs Act is with regard to the powers of search given to the officers specially empowered. This provision shows that the officer who is authorized and who has reason to believe that any goods, are liable to confiscation, due to contravention of the provisions of the Act (in the present case Central Excise Act) or any document or thing which in the opinion of such officer is relevant and can be used in any proceeding under the Act, he can search any place where such goods or things can be found. Provision of Section 110 gives power of seizure to the authorized officers or the officers mentioned in the section and those powers relate to the case of aforesaid nature and the documents and things of the nature mentioned in section 105. 20. The provision of section 110(2) of the Customs Act shows that when the goods are seized under sub section (1) of section 110 and notice in respect of such goods is not given, under clause (a) of section 124 of Customs Act within six months from the date of seizure, the goods shall be returned to the person f....
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....section 2(22) of the Customs Act. the definition is as under:- "(22) "goods" includes - (a) vessels, aircraft and vehicles; (b) stores; (c) baggage; (d) currency and negotiable instruments; and (e) any other kind of movable property. 27. On the basis of the aforesaid definition, the learned counsel for the petitioner submitted that, period of six months given in section 110(2) of the Customs Act is applicable to the sale proceed of excisable goods in respect of which there is evasion of estate duty. He submitted that in view of this definition and provisions of Section 121 of the Customs Act read with sections 110 and 124 of the Customs Act, it was necessary for the Department to give notice within prescribed period of intention of confiscation if the Department has formed opinion that the cash amount can be confiscated as provided in the aforesaid provisions. He drew attention of this Court to relevant portion of the show cause notice which is already quoted. This proposition needs to be accepted for many reasons as under:- (i) "goods" includes currency, vessels etc. and even other movable property under the definition of "goods" given in Customs Act. When section 110 of t....
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....case cannot be ignored. The relevant material is already discussed and it shows that present petitioner was involved in running of the business and he was collecting sale proceeds. Thus, the proceeding can go on against him. There is no plausible explanation with the petitioner and there is nothing with him to show that he got such income from which he could have accumulated cash amount of Rs. 45 lakh. He is a Tax Consultant. He has given undertaking to the High Court not to dispose of the property and this undertaking was given to see that his sons get bail. Liability of payment of duty, penalty and also interest is to be fixed. There are more provisions in the Central Excise Act like provisions of sections 110 and 110-A. While considering the claim of the petitioner in such a case these provisions need to be kept in mind. Circumstance of fraud mentioned in section 11-A (4) of the Central Excise Act is prima facie made out in the present matter. There is prima facie case for evasion of estate duty and also non payment of income tax on the income made by utilizing aforesaid modus operandi. Thus not only the duty payable is to be ascertained under the present Act but the Income Tax ....
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.... is filed in Criminal Court, the Court has also power to forfeit such amount and that can be seen in the provisions of the Code of Criminal Procedure and also section 110 of the Central Excise Act. The learned counsel for the Department has placed reliance on a case of Rajasthan High Court reported as (2006) 202 CTR Raj 231 (Harvest Gold Food (India) Pvt. v. Union of India). 31. The provision of Section 13 of the Central Excise Act shows that there is a power to Excise Officer not below the rank of Inspector to arrest the person like present petitioner involved in such offence if he has authorization as provided in section 13 of the Act. The provision of section 14 of the Act shows that there is power to the empowered officer to issue summons to a person like present petitioner and call him to the office. Section 14(2) of the Act shows that persons so summoned is bound to comply with the summons and the conditions of the summons. Provision of Section 18 gives procedure for such an arrest. Provision of Section 19 of this Act runs as under:- "19. Disposal of persons arrested.-- Every person arrested under this Act shall be forwarded without delay to the nearest Central Excise Offic....