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Judgment
Heard Mr. R.L. Yadav, learned counsel for the petitioners. Also heard Mr. S.C. Keyal, learned Asstt. SGI for the respondents.
In this petition the petitioner has challenged the impugned Demand Notice dated 21.05.2019 by which it was held that the arrear revenue amounting
to Rs.19,75,352/- is still pending from the petitioners’ Firm i.e. M/s. Plast India Ltd., Seujpur, Dibrugarh and sought to be realized vide three
adjudicating orders passed by the Department against the petitioners.
Learned counsel for the petitioners submits that the aforesaid Demand Notice is per se illegal for the reason that the authorities had already issued
a Demand Notice as early back on 20.07.1994 in connection with which the authorities also detained a number of goods produced by the
petitioners’ firm of the value of the demand notice i.e. Rs.18,92,585.29. Because of the initial demand notice dated 20.07.1994 and
attachment/detention of the goods of the said value, the petitioners also could not sell or do any transaction. In the meantime, the petitioners’ Firm
was closed because of various problems and as such, it would not be possible at this point of time to meet the demand.
It has been further submitted that as per the initial Demand Notice dated 20.07.1994, the authorities had made it very clear that incase the dues
amounting to Rs.18,92,585.29 were not paid by the petitioners’ within the 15 days of service of the order, steps shall be taken to sell by auction or
otherwise the detained goods and recover the dues without prejudice to any other action that may be taken under the relevant law.
The simple case of the petitioner is that on failure of the petitioner to meet the aforesaid demand of Rs.18,92,585.29/- vide Demand Notice dated
20.07.1994, if the authorities had auctioned the said seized properties, they would have recovered the said due amount, in which event the petitioner
would not be liable to pay any due to the respondent-authorities. However, the authorities instead of auctioning of the said detained goods after 15
days, as mentioned in the demand notice, waited for several years and auctioned the same only in the year 2002 by which time there has been
enormous depreciation of the value of the goods detained/sized by the respondents and resulting in fetching only an amount of Rs.4,56,019/- which
have been already realised by the authorities in the year 2002.
Under such circumstances, it has been submitted that the petitioners’ have no liability to pay any due as demanded by the interim order dated
21.05.2019.
Mr. S. C. Keyal, learned Asst. SGI has produced the original records as called for.
The stand of the respondent nos. 1 to 3 is to be found in the affidavit-in-opposition filed in Para-10, 12, 14, 16 & 18, which are reproduced herein
below:
“10. That with regard to the statements made in paragraph-11 of the writ petition the answering Respondents beg to state that although it
was mentioned in the letter dated 20.07.1994 that in case the dues would nto be paid by the assessee within 15 days steps would be taken to
sell goods by auction or otherwise and recovered the dues without prejudiced to any other action that might be taken under Central Excise
& Salt Act, 1944 and Rules framed there-under, yet the assessee had been asked to deposit the outstanding amount of Rs.18,92,585.29 vide
letters C.No.V(15)46/Acd/Tech/92/664 dated 16.02.1995. Even No.1571 dated 05.05.1995. However, the department had initiated auction
of dtained goods which is very much evident from the letter C. No.V( 15)46/Acd/Tech/92/2735 dated 03.01.1996 issued by the
Superintendent Technical, Dibrugarh. Advertisement was also published in several New papers during the month of July, 1998.
.......
That with regard to the statements made in paragraph-17 of the writ petition, the answering Respondents beg to state that in response to
assessee’s letters regarding vacation of Goods, the department initiated action for withdrawal of custody of attached PVC insulated GI
Wires vide letter C.No.IV(16)1/AE/DIB/97 dated 27.08.2002 and accordingly, the goods was taken in possession by the department.
....
That with regard to the statements made in paragraph-19 of the writ petition, the answering Respondents beg to state that under the
provisions of Hand Book on Recovery of Arrears of revenue of Customs, Central Excise & Service Tax, read with CBEC Circular No.56/96-
cus., dated14.11.1996, it is observed that there is no such provisions for issuing a fresh notice to the assessee regarding the outcome of
bid/auction as once intimidated about the Auction Notice.
.....
That with regard to the statements made in paragraph-21 of the writ petition, the answering Respondents beg to state that on 27.08.2002
auction was held and t he amount of bid for a bidder was accepted who was agreed to purchase the goods at the highest rate amounting to
Rs.4,56,019.00 and the same was received vide T.R.-6 No.02 & 03 both dated 28.08.2002. Hence their outstanding dues in accordance with
Adjudication Order No.DIB/DIV/17/ACD/TECH/93 dated 08.10.1993 had been reduced from Rs.18,92,585.29 to Rs.14,36,566.29
[Rs.18,92,585.29-Rs.4,56,019.00=Rs.14,36,566/29]. Moreover, it was also observed that the assessee had to pay arrear amount of
Rs.3,60,627.95 & Rs.1,78,157.58 as per Adjudication Order No.12/Addl.Collr/Ch.85/CE/91 dated 2904.1991 & DIB/DIV/Tech/Acd/96
dated 04.12.1995 respectively. Therefore, total arrear dues became Rs.19,75,351.82
[Rs.3,60,627.95+Rs.1,78,157.58+Rs.14,36,566.29=19,75,351.82] which was demanded vide letter C.No.IV (16) 1/AE/DIB/97/3564-65
dated 15.12.2008. Thereafter, several letters had also been issued to recover their outstanding dues.
........
That with regard to the statements made in Paragraph-23 of the writ petition, the answering Respondents beg to state that all the events
had been described above and done as per law. So, there should not be any question of illegal action by the department.â€
After hearing the learned counsel for the parties and on perusal of the materials available on record, the only issue is to be decided in this case is
whether the revenue authorities were justified in issuing the impugned demand notice on 21.05.2019 under the circumstances narrated above.
In the opinion of this Court, they are not entitled to issue the said impugned Notice dated 21.05.2019 as because when the first Demand Notice
was issued on 20.07.1994, there was a condition specifically mentioned that in the event the petitioner fails to pay the aforesaid demand amount within
a period of 15 days, steps would be taken to sell attached/detained/seized goods by way of auction.
It is not the case of the respondent-authorities that the petitioners had challenged the Demand Notice or obtained any stay order which prevented
the authorities from implementing upon the said Demand Notice by way of auctioning the seized goods. The affidavit-in-opposition filed by the
respondent-authorities also does not explain the reason why there has been an enoromous delay in conducting the auction in the year 2002 after the
goods were seized in the year 1994.
It cannot be denied that values of these seized goods made of PVC and G.I. wire obviously in course of passage of time would be reduced and as
such, the authorities themselves have to be blamed for reduction of the value at the time of auctioning in the year 2002, as there was no role on the
part of the petitioners to stall any such auction by the authorities in terms of the initial Demand Notice.
If the authorities had auctioned the seized goods within a reasonable time after issuance of the Demand Notice dated 20.07.1994, perhaps they
would have realized the entire due amount from the petitioners. Since, that had not been done, the petitioners are not in any way responsible for the
delay in auctioning the goods, resulting in the reduction of the value of the goods and as such, the petitioners cannot be made to suffer for the lapses
on the part of the authorities.
Be that as it may, as mentioned by the authorities themselves in Para No.14 that there is no provision for issuance of fresh notice to the assessee
regarding the outcome of bid/auction as once intimated about the auction notice, the authorities have to blame only themselves for the delay in
auctioning the goods. As mentioned in the initial order of the demand notice dated 20.07.1994, the liability of the petitioner was Rs.18,92,585.29 and
the authorities detained/seized goods worth of the said amount and as such, this Court is of the opinion that the petitioners having already made to
suffer by the seizure of the goods amounting to Rs.18,92,585.29 cannot be made to undergo any further loss again by way of second Demand Notice
dated 21.05.2019. As mentioned above, if the authorities had auctioned off the seized goods within a reasonable time, the question of any due liability
of the petitioners to be discharged would not have arisen.
Accordingly, this Court is of the opinion that there is merit in the petition. The impugned second Demand Notice issued on 21.05.2019 is held illegal
and not warranted under the facts and circumstances of the case. The petition is allowed. Accordingly, as far as the initial demand of Rs.18,92,585.29
vide Demand Notice dated 20.07.1994 is concerned, any such liability shall be deemed to have been discharged.
Learned counsel for the petitioners further submits that since the seized goods were in a rental premise, the petitioners had to incur certain rental
amount and submits that the revenue authorities be directed to pay the rent. As far this issue is concerned, this issue is purely a question of fact as to
whether the petitioners had paid the said rent and also about the duration and other terms and agreement of the rental, for which the petitioners would
be at liberty to approach the competent forum for recovery of the said amount as per law.