REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURI SDICTION

CIVIL APPEAL NO.       2894              OF 2009 (Arising out of SLP (C) No. 30427 of 2008)

Union of India & Ors.  ..Appellants

Versus

M/s. Green Alloys P. Ltd.  ..Respondent

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the order passed by a Division Bench of  

the Punjab and Haryana High Court directing release of the goods seized  

from the respondent on furnishing undertaking to pay the duty or other dues  

which  may  be  found  due  without  furnishing  any  cash  security  or  bank  

guarantee for the value of the goods.  Certain other directions were given  

which we are not primarily concerned with.  By the Writ Petition (CWP No.  

17287 of 2008) the respondent had sought for a direction for release of raw  

material seized by the Anti Evasion Branch of the Central Excise, Faridabad  

on 15.9.2008 and also  to  quash  letter  of  seizure  on 24.9.2008 alongwith  

Panchnama.

3. Stand of the present  respondents  was that  under the Cenvat  Credit  

Rules, 2004, only the finished goods are excisable and there could be no  

evasion of duty unless the goods are manufactured and cleared.  Condition  

of executing Bond in form B-11 or giving of cash security for releasing the  

goods was not justified.  Bond B-11 was applicable for release of finished  

goods only.

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4. In the reply filed on behalf of the present appellant stand taken is that  

the present  respondent  had shown low value addition  and paid very less  

amount of duty from the cash account.  The imported scrap was of the value  

of Rs.70-80 per kg. while finished goods were of the value of Rs.120-130  

per  kg.  They  also  found  that  against  the  declared  stock  of  453326  kg.  

aluminium scrap  entered  in  the  stock  RG-23A Pt-I  register,  the  balance  

shown was nil. In the table reproduced in para 3 of the written statement, it  

is mentioned that though there was entry of goods received in register RG-

23A, in the register  maintained in computer  in  Excel  Sheet,  the  entry of  

7.9.2008 and 8.9.2008 was nil. It is thus pointed out that under Rule 15 of  

the Cenvat Credit  Rules, 2004, the goods were liable to confiscation and  

penalty.”

5. Though  the  High  Court  observed  that  it  was  not  expressing  any  

opinion on the merits  yet it  went into  various  aspects  and ultimately the  

direction was given which is impugned in the present appeal.

6. Learned counsel for the appellants submitted that the approach of the  

High Court is clearly erroneous.

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7. Learned counsel for the respondent on the other hand submitted that  

the order of the High Court does not suffer from any infirmity.  

8. Learned counsel for the respondent submitted that in a similar case  

this Court had declined to interfere in SLP (C) No. 30354 of 2008 by order  

dated 5.1.2009.  The order reads as follows:

“Subject  to  granting  liberty  to  the  petitioners  to  issue  additional  show  cause  notice,  the  special  leave  petition is dismissed.”

9. It is pointed out by learned counsel for the appellant that in the instant  

case two show-cause notices have been issued. We find that while passing  

an interim order the High Court had given certain categorical findings on  

merits.  It  has held that it  cannot be held that there was a clear case for  

confiscation only on the ground that in the computerised excel sheet some  

of the goods were not entered.

10. The  High  Court  appears  to  have  decided  that  aspect  finally  even  

though that was not the stage for doing so and that was beyond the scope for  

adjudication of the writ petition.   In the circumstances we direct that the  

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respondent shall be permitted to release goods on furnishing cash security  

or bank guarantee for 25% of the value of goods.  The same shall be done  

within a period of four weeks.  The appeal is allowed to the aforesaid extent.

….……....................................J. (Dr. ARIJIT PASAYAT)

……………….…… …...............J.

(ASOK KUMAR GANGULY) New Delhi, April 28, 2009                                                            

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