AI Drafter 
TaxTMI 
TaxTMI 
2019 (4) TMI 113
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....ble Instruments Act (in short 'NI Act'). 2. Facts as are relevant for the present purpose may be noted in brief. Respondent herein/ complainant Central Excise Commissionerate had filed a complaint against the petitioner / accused Vimal Kumar, proprietor of M/s Jaikara Apparels, in respect of offence punishable u/s 138 of NI Act. The basis thereof is of the three cheques issued by the accused towards the discharge of his legally enforceable liability, returning unpaid when presented by the complainant with the banker for encashment. It is averred that these cheques were tendered voluntarily by the accused and on the basis of his statement u/s 14 of the Central Excise Act, 1944 as tendered on 08.11.2012. The statement came in co....
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.... petition, it has been averred that the Ld. MM had failed to appreciate that a necessary ingredient to constitute an offence u/s 138 of NI Act that the cheque should have been drawn for the discharge of any pre-existing debt or liability, was missing in the complaint. It was very much apparent from the record of the complaint preferred by the complainant/ respondent that on the date when the cheques were drawn, there was no debt or liability payable by the accused. It is averred that in support of the claim of demand of Central Excise Duty payable by accused, complainant had relied upon a show cause notice dated 08.05.2013. A bare perusal of the show cause notice would show that the accused was called upon to show cause why the amount of Ce....
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....e appeal. It is averred that initially when the accused had failed to report compliance, his appeal was rejected vide order dated 16.06.2014 which was challenged before the Appellate Tribunal and the order of the Appellate forum was set aside vide order dated 11.07.2017 and the matter was remanded back to be decided afresh. It is averred that the Hon'ble High Courts have come down heavily on the Revenue Authorities in their practice of collecting cheques at the time of search itself. It is on the grounds as above taken, that the petitioner had made a prayer to set aside the impugned order dated 04.05.2018. 6. Notice of the petition was issued to the respondent/ Customs and reply came to be filed wherein it was averred that the che....
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....rried out a raid / search of his premises. It is when his statement u/s 14 of the Central Excise Act, 1944 was recorded, that the complainant alleges in the complaint that the accused had admitted his liability to pay the Central Excise Duty evaded by him on the pretext of his entitled to exemption under some notification. As such, reference to Sec. 14 of the Central Excise Act, 1944 becomes necessary. Sec. 14 which falls under Chapter III of the Act provides for the power of the Central Excise Officer to summon persons to give evidence and produce documents in inquiry under the Act. Sub-section (2) of Sec. 14 lays down that all persons so summoned shall be bound to attend, either in person or by an authorized agent as such officer may d....
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....ken to be the basis of final determination of his liability to pay the central excise duty, the subsequent proceedings of the nature of issuance of show cause, passing of proper orders and of the appeal there against as provided under the law would then become redundant which admittedly is not the intent and purpose of the law. The complainant by making the statement of the accused as the basis of determination of his liability had in fact bypassed the entire proceedings as provided under the Central Excise Act of recovery of evaded central excise duty alongwith interest and penalty as applicable. In this regard, the judgment of Hon'ble High Court of Delhi in Digipro Import & Export Pvt. Ltd. vs Union of India, 2017 (350) ELT 145 (Del) ....
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.... makes it inexcusable". 9. From the above, it is apparent that the record of the complaint before the Ld. MM was absolutely insufficient to form the opinion that the cheques were issued by the accused/ petitioner towards the discharge, in whole or in part, of the legally enforceable debt or liability. As per the record available before the Ld. MM, the show cause proceedings of the demand and recovery of the Central Excise duty alleged to have been evaded by the accused had been initiated and there was nothing in the complaint that any order in consequence thereof, of the determination of the evaded central excise duty had been passed by the proper officer / competent authority under the Central Excise Act. Instead, the accused petitioner....