UNION OF INDIA AND ORS. versus M/S. GREEN ALLOYS P. LTD.

Citation: [2009] 7 S.C.R. 130 · Decided: 28-04-2009 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Case Partly allowed
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Judgment (excerpt)

[2009) 7 S.C.R. 130 
A 
UNION OF INDIA AND ORS. 
• 
V. 
MIS. GREEN ALLOYS P. LTD. 
Civil Appeal No. 2894 of 2009 
B 
APRIL 28, 2009 
[DR. ARIJIT PASAYAT AND ASOK KUMAR 
GANGULY, JJ.] 
• 
..
Cenvat Credit Rules, 2004 - r.15 - Confiscation of raw 
t 
materials - Writ petition seeking release of goods seized -
c Direction by High Court to release goods on furnishing 
undertaking to pay duty without furnishing cash security- Held: 
High Court held that it was not a clear case for confiscation 
only on the ground that in computerised excel sheet some of 
the goods were not entered - It finally decided the issue at the 
D interim stage - It was beyond the scope for adjudication in writ 
petition -· Thus, assessee permitted to release goods on 
furnishing cash security or bank guarantee for 25% of the value 
of goods - Constitution of India, 1950 - Article 226. 
The question which arose for consideration in this 
E appeal was whether the High Court was justified in 
directing release of the goods seized from the respondent 
on furnishing undertaking to pay the duty or other dues 
without furnishing any cash security or bank guarantee 
for the value of the goods. 
F 
Partly allowing the appeal, the Court 
HELD: In the instant case, two show-cause notices 
were issued. While passing an interim order the High 
Court gave certain categorical findings on merits. It held 
G 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. High 
.. 
Court appears to have decided that aspect finally even 
though that was not the stage for doing so and that was 
H 
130 
UNION OF INDIA AND ORS. V. 
131 
M/S. GREEN ALLOYS P. LTD. 
.) 
beyond the scope for adjudication of the writ petition. In A 
the circumstances the respondent shall be permitted to 
release goods on furnishing cash security or bank 
guarantee for 25% of the value of foods. [Paras 9 and 10] 
[132-G-H; 133-A-B] 
CIVIL APPELLATE JURI SDICTION : Civil Appeal No. 
B 
2894 of 2009 
1 
From the Judgement and Order dated 31.10.2008 of the 
Hon'ble High Court of Punjab & Haryana at Chandigarh in C.W.P. 
No. 17287 of 2008. 
C.V. Subrow, Rahul Kaushik,Anil Katiyar, for the Appellant. c 
Daffatray Vyas, Manish Sharmc::i, Chirag M. Shroff, for the 
Respondents. 
The Judgement of the Court was delivered by 
D 
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 
E 
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 
F 
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 G 
... 
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. 
H 
132 
SUPREME COURT REPORTS 
[2009) 7 S.C.R. 
A 
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 
B 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 
c 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 
D expressing any opinion on the merits yet it went in
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