TaxTMI 
TaxTMI 
2023 (12) TMI 74
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....ENT 1. Since the issues and facts involved in all these applications are the same, at the request of learned advocates for the parties, they are heard and disposed of together by this common judgment. 2. These applications are filed under Section 482 of the Code of Criminal Procedure (`the Code' for short) praying to quash and set aside the Criminal Case Nos. 18 of 2011, 613 of 2012, 614 of 2012 and 615 of 2012, which are filed under the provisions of Section 138 of Negotiable Instruments Act, (`the Act' for short), pending in the Court of the learned Additional Chief Metropolitan Magistrate, Court No. 36, Ahmedabad and consequential proceedings pursuant thereto. 3. Heard learned advocates for the parties. 4. Learned advocates Mr. Thackar for the applicant submitted that the impugned complaints are filed for dishonour of the cheques, the details of which are mentioned as under: Sr.No. Application No. Cheque No. Date Amount 1. Criminal Miscellaneous Application No. 17170 of 2014 000260 11.10.2011 30,00,000/- 2 Criminal Miscellaneous Application No. 17171 of 2014 000267 01.01.2012 25,00,000/- 3 Criminal Miscellaneous Application No. 17172 of 2014 000257 22.11.....
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....ant but as such the cheques were obtained by the officers of the department under threat, pressure and duress. Thereafter, the demand raised by the department was challenged by way of statutory appeal, which was also allowed and such assessment was quashed and therefore, on date of issuance of cheque as well as on deposit of cheques, no legally enforceable debt was existing. 8. Learned advocate Mr. Thacker submitted that in cognate matters being Criminal Miscellaneous Application No. 11461 of 2015, 11467 of 2015 and 11468 of 2015, this Court (J.B. Pardiwala, J, as His Lordship then was) had considered identical set of facts and allowed the applications of the applicants therein and therefore, prayed to allow these applications. 9. Learned advocate Mr. Thackar further submitted that cheques cannot be collected by the authority without assessment and a show cause notice proposing to recover the amount towards the duty has to be issued in accordance with law. 10. Learned advocate Mr. Thackar for the applicant relied on the judgments of the Hon'ble Apex Court in the cases of (i) M/s Indus Airway Pvt.Ltd. V/s M/s Magnum Aviation Pvt.Ltd. Reported in 2014(12) SCC 539. (ii) Sampell....
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....to detect the evasion of Central Excise duty by the manufacturer and proceed against them. 2. That, the accused No. 1 M/s. Nandeshwari Steel Ltd. is a Public Limited Company and registered under the Indian Companies Act and engaged in manufacture of SS ingotes, SS Round Bars falling under chapter - 72 of The Central Excise Tariff Act, 1985. The accused No. 2 Shri Mitesh Patel is the director of the said Company and looking after day to day affairs of the said company and is responsible for the said company M/s. Nandeshwari Steel Ltd. falls within the Jurisdiction of the Commissioner of Central Excise Ahmedabad III and are registered with Central Excise Division Office, Gandhinagar. Directorate General of Central Excise Intelligence, (herein after refereed to as DGCEI) having jurisdiction over the entire state of Gujarat for detecting and investigation of the cases of Central Excise duty evasion. 3. That on behalf of DGCEI, Senior intelligence officer Shri M.K. Sharma, has been instructed and authorised to file this complaint by the order of the Additional Director General, DGCEI, Zonal Unit, Ahmedabad, Shri M.K. Sharma is an employee of the Central Government and a public serva....
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.... 15.12.12 Rs. 50,00,000/- 3. 000853 31.12.12 Rs. 50,00,000/- 4. 000854 15.01.13 Rs. 50,00,000/- 5. 000855 31.01.13 Rs. 50,00,000/- 6. 000856 15.02.13 Rs. 50,00,000/- 7. 000857 28.02.13 Rs. 50,00,000/- Total Rs. 3,50,00,000/- 7. That, out of the cheques mentioned in the table above three cheques mentioned at serial No. 04 and 05 above the cheque No. 000854, 000855 were deposited in the State Bank of India, Ashram Road Branch, Ahmedabad on 05.02.2013 for crediting the same in Government of India Account and the same were returned unpaid by their Bank of Baroda on 07.02.2013 with a remark of 'Payment Stopped by Drawer'. Therefore, the complainant could not recover their legal dues of Rs. 1,00,00,000/- (Rupees One Crore Only) from the accused. 8. That on 05.03.2013, the complainant through their advocate have served a legal notice U/s. 138 of the Negotiable Instrument Act to the accused to make the payment of the aforesaid returned and unpaid cheques by Regd. Post AD. The notice were served at the Registered office as well as factory premises of the accused No. 1. The notice has been received by the accused on or about 07.03.2013. However, the....
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....r the Central Excise Act have not been initiated till this date. A show-cause notice proposing to recover a particular amount towards the duty has to be issued in accordance with law. The adjudicating authority, thereafter, will have to consider the claim put forward by the department by giving the applicants opportunity of leading appropriate evidence. Mr. Trivedi submits that the exact amount of the alleged evasion of duty is yet to be determined in accordance with law, and on the date when the cheques were obtained by the officers under threat, pressure and duress, there was no legally enforceable debt payable by the applicants to the complainant. Mr. Trivedi submits that the applicants have been charged with the offence under Section 9 of the Central Excise Act, 1944, i.e. for wrongly availing the Cenvat Credit of Rs. 3.27 crore. Such allegations have been levelled merely on the ground of purchase of cenvatable invoices from the various ship breaking units without physically receiving the corresponding goods along with the Central Excise invoices during the period between 2009-10 and 2012-13. Mr. Trivedi invited the attention of the court to certain provisions of law. First, ....
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....ore service of notice under clause (a), pay on the basis of,- (i) his own ascertainment of such duty; or (ii)the duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under section 11AA. (iii) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that subsection in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder. (2) Where the Central Excise Officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that subsection in respect of such amount which falls short of the amount actually payable in the manner specified under that subsection and the period of one year shall be computed from the date of receipt of information under sub-section (2). (3) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refu....
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....considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice. (11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10)- (a) within six months from the date of notice in respect of cases falling under subsection (1); (b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under sub-section (4) (12) Where the appellate authority or tribunal or court modifies the amount of duty of excise determined by the Central Excise Officer under subsection (10), then the amount of penalties and interest under this section shall stand modified accordingly, taking into account the amount of duty of excise so modified. (13) Where the amount as modified by the appellate authority or tribunal or court is more than the amount determined under subsection (10) by the Central Excise Officer, the time within which the interest or penalty is payable under this Act shall be counted from the date of the order of the appellate authority or tribunal or court in respect of such increased amount. ....
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.... date on which the Finance Bill, 2015 receives the assent of the President, shall be governed by the provisions of section 11A as amended by the Finance Act, 2015." Thereafter, to Section 35 of the Act, which provides for appeals. It reads as under : "Section 35. Appeals to Commissioner (Appeals). - (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise , may appeal to the Commissioner of Central Excise (Appeals) hereafter in this Chapter referred to as the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order : Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days. (1A) The Commissioner (Appeals) may, if sufficient cause is shown at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such....
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.... India, Junagadh. The said applicant has also produced photocopy of cheque in support of his plea, by way of draft amendment on 17.04.2015 and in these circumstances, this Hon'ble Court by order dated 17.04.2015 has allowed the draft amendment and issued rule on the petition. The applicant herein has relied upon the said order dated 17.04.2015, which is produced by him at PP-134. It is respectfully submitted that no such plea is available to the applicant in support of prayer for quashing the complaint filed against him by the answering respondent. A copy of draft amendment submitted in Criminal Misc. Application No. 17170 of 2014 is annexed hereto and marked as ANNEXURE R-1 to this affidavit. Therefore, the application requires to be dismissed at the threshold and ex-parte ad-interim relief obtained by the applicant may also be vacated. 4. Without prejudice to the preliminary objection as to the maintainability and entertainability of the captioned application, the answering respondent respectfully submit that the facts stated by the applicant in paras 2 to 9 of the application does not reflect true, complete and correct facts. The relevant facts taken out from the record mainta....
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....owing sale of old & used MS Plates, without receipt of goods mentioned therein; that they were not having facility/shredding machine for cutting, shredding & using said old & used MS Plates in manufacture of finished excisable goods at their factory premises; that they shared duty of such phony invoices in 50:50 ratio; that he was also indulging into clandestine removal of excisable goods i.e. SS Rounds on cash basis without issuance of invoices & without payment of Central Excise duty leviable thereon. He has also admitted the modus operandi adopted by him for evading Central Excise duty by aforesaid manners. Duty evasion on aforesaid counts approx. comes to Rs. 4.00 Crores. Admitting the above offence, M /s. NSL has on spot voluntarily paid an amount of Rs. 75,00,000/- in aggregate vide GAR-7 Challan No. 00181 dated 07.11.2012 for Rs. 50,00,000/- and GAR-7 Challan No. 00182 dated 07.11.2012 for Rs. 25,00,000/- by e- payment to Govt. Exchequer. Also, they, vide their letter dated 08.11.2012, have willingly tendered below mentioned 07 post dated cheques, each of Rs.50 lakhs, totally amounting to Rs. 3,50,00,000/-, all drawn on Bank of Baroda, Naroda Road Branch, Ahmedabad: Sr.No. ....
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....ntarily but it was rather issued under threat and coercion. Therefore, the answering respondent has filed Criminal Case No. 746 of 2013 on 01.04.2013 for the offence punishable under Section 138 of the Negotiable Instrument Act, 1881 by the applicant, which is sought to be quashed by the applicant under the captioned application. The learned Metropolitan Magistrate (NIA), Court No. 36, Ahmedabad is hearing the above criminal case and evidence of the complainant is recorded. 5. With reference to the grounds set out by the applicant in the memo of application, seeking quashment of the complaint filed by the answering respondent against him for the offence punishable under section 138 of the Negotiable Instrument Act, 1881, are not germane to the jurisdictional facts of the case and the applicant is not entitled for the relief, as prayed in the captioned application. The points of contentions raised by the applicant in the form of grounds in terms of para 10 are responded as under: 5.1 It is respectfully submitted that the answering respondents does not admit the contention of the applicant that the complainant does not disclose any criminal offence against him. It is respectfully....
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....remises and removed the excisable goods manufactured by him clandestinely and without making payment of excise duty during the period from FY. 2010-11 to F.Y. 2012-13 and, therefore, in the present case as on the date of issue of the cheque by the applicant there existed legally enforceable debt within the meaning of section 138 of the Negotiable Instruments Act, 1881. In the premises, it is also not correct to contend by the applicant that, there was no legally enforceable debt during the deposition of the said cheques, as prescribed under the provisions of the Negotiable Instruments Act, 1881, is not capable of being accepted by this Hon'ble High Court. 5.3 The answering respondent do not admit the contention of the applicant that in the present facts and circumstances, the amount of evasion of duty is yet to be determined and, therefore, even today there is no legally enforceable debt payable by the applicant to the complainant. It is submitted that as on the date of draw of the cheque, statutory liability of the applicant to make payment of excise duty to the Government was subsisting. In the circumstance, reliance placed by the applicant on the ratio laid down by the Hon'ble S....
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....anation to Section 138 of the Negotiable Instruments Act defines the expression "debt or other liability" as a legally enforceable debt or other liability. Unless the two conditions set out in Section 138 of the Act are satisfied, no criminal liability can be fastened. This is also in accordance with the general scheme as laid down in Section 118(a) of the Negotiable Instruments Act. It also enforces the doctrine of consideration as laid down in Section 2(d) of the Indian Contract Act, 1872. Too many definitions of the word debt have been given though the word debt is not defined in the Act. 'Debt' is defined in the Stroud's Judicial Dictionary, (4th edition, volume 2) as a sum payable in respect of a liquidated money demand recoverable by action (Rawley v Rawley, 1 QBD 460). In Dictionary of Banking by F.E.Perry (1979 edition, page 64), debt is mentioned as something owed to another, a liability, an obligation, a chose in action which is capable of being assigned by the creditor to some other person. Shri K.J.Aiyar's Judicial Dictionary (page 314) mentions debt as under : "Debt is a pecuniary liability. A sum payable or recoverable by action in respect of money demand. It ref....
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....rs of Maruti cars. They have been filing returns under the Value Added Tax Act, 2003 (hereinafter referred to as 'the Act') regularly. It is the contention of the petitioners that they recover certain handling charges from the customers, which are in the nature of post sales services. On such handling charges, according to them, they are not required to pay the Value Added Tax (hereinafter referred to as VAT), since such handling charges cannot form a part of sale value of the car. The respondents carried out search operations in the premises of the petitioners on December 25, 2013 and raised the issue of non-payment of VAT on handling charges. 2. The learned counsel for the petitioner submitted that under coercion the petitioners were made to make the payment of Rs. 15,28,972/= and Rs. 24,323/= in two separate payments. Over and above this, the respondents have also under duress taken three cheques from the petitioners. Total amount of such cheques is to the tune of Rs. 1,86,12,518/-. The learned counsel for the petitioner further submitted that so far there has been no adjudication on this issue and no assessment orders have been passed by the authorities. He submitted ....
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....the Act, 1944 as a confession on the part of the applicants of indulging into fraudulent availment of the Cenvat Credit of Rs.3.27 crore on the basis of phony convertible invoices issued by the various ship breaking units of Bhavnagar. Let me assume for the moment that at the end of the search operation the officials were able to collect something incriminating against the applicants as regards the evasion of the excise duty. However, it cannot be said that the cheques which were obtained by the department were towards the discharge of the existing enforceable debt or liability. The liability was yet to be determined by the competent authority under the provisions of the Act. In such circumstances, the decision of the Supreme Court in the case of Sampelly Satyanarayana Rao (supra) is very relevant. The Supreme Court, in the case of Sampelly Satyanarayana Rao (supra), considered the earlier decision in the case of M/s. Indus Airways Pvt. Ltd. and others v. M/s.Magnum Aviation Pvt. Ltd. and another, (2014)12 SCC 539, on which strong reliance has been placed by the learned counsel appearing for the applicants. In para 11, the Supreme Court distinguished Indus Airways (supra). I may ....
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....nt becomes due under the agreement, the moment the loan is advanced and the installment falls due. It is undisputed that the loan was duly disbursed on 28th February, 2002 which was prior to the date of the cheques. Once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act. The cheques undoubtedly represent the outstanding liability. 11. The judgment in Indus Airways (supra) is clearly distinguishable. As already noted, it was held therein that liability arising out of claim for breach of contract under Section 138, which arises on account of dishonour of cheque issued was not by itself at par with criminal liability towards discharge of acknowledged and admitted debt under a loan transaction. Dishonour of cheque issued for discharge of later liability is clearly covered by the statute in question. Admittedly, on the date of the cheque there was a debt/liability in presenti in terms of the loan agreement, as against the case of Indus Airways (supra) where the purchase order had been cancelled and cheque issued towards advance payment for the purchase order was dish....
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....es. In our opinion, the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of the NI Act stood uncomplied with, even though Respondent 1 (accused) had admitted that he replied to the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorised by the complainant company or not, could not have been examined by the High Court in its jurisdiction under Section 482 of the Code of Criminal Procedure when such plea was controverted by the complainant before it. 11. In Suryalakshmi Cotton Mills Ltd. v. Rajvir Industries Ltd. [(2008) 13 SCC 678], this Court has made the following observations explaining the parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure: (SCC pp. 685-87, paras 17 & 22) "17. The parameters of jurisdiction of....