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2004 DIGILAW 271 (PNJ)

S. S. Textiles v. Commissioner Of Central Excise

2004-03-08

HEMANT GUPTA, N.K.SUD

body2004
Judgment Hemant Gupta, J. 1. The petitioner has claimed a writ in the nature of certiorari for quashing of the order dated 21-9-2001. Annexure P-15, and order dated 4-3-2002, Annexure P-19, and for issuance of a direction to the respondent to open the seals on the Stenter machine of the petitioner 2. Vide licence deed dated 2-10-1998, respondent No. 3 took on licence the factory premises of the petitioner and to use the plant, machinery, land and building for a period of two years. On expiry of the licence period, respondent No. 3 shifted his manufacturing activities on 22-10-2000 in the same very area and shifted his stock of colours and chemicals, accessories and designs to the new premises without clearing the due Excise duty The action of respondent No. 3 was brought to the notice of the Central Excise Authorities on 26-10-2000 vide communication, Annexure P-3, by the petitioner wherein the petitioner has sought a certificate "that the factory is no more working or workable and excisable since 22-10-2000". In pursuance of such communication, Stenter machine was sealed on 27-10-2000 by the respondents in exercise of the powers conferred under Rule 96ZQ(7) of the Central Excise Rules, 1944 . As per respondents, the machine was sealed to give relief to the concerned parties so that the duty may not keep accruing thereafter. The sealing was not meant to seize, attach or in any way take possession of Stenter machine. 3. There was a dispute regarding ownership of Stenter machine between the petitioner and respondent No. 3. The said dispute was referred to Arbitrator who vide his award dated 15-5-2001, Annexure P-11, held that such Stenter machine is owned by the petitioner. The department had sought a copy of the lease deed, copy of purchase invoices of machinery detained along with proof of payment, copy of final Arbitral Award and other documentary evidence from the petitioner. On receipt of information, vide the impugned letter dated 21-9-2001 the petitioner was informed that there is no legal embargo and the petitioner can start manufacturing activities as and when it liked. Notice was served upon respondent No. 3 as per provisions of Rule 230 of the Central Excise Rules, 1944. It is the stand of the respondents that the officers of the department acted within the legal framework for recovery of pending dues. Notice was served upon respondent No. 3 as per provisions of Rule 230 of the Central Excise Rules, 1944. It is the stand of the respondents that the officers of the department acted within the legal framework for recovery of pending dues. Against the communication dated 21-9-2001, the petitioner has submitted a representation to the Commissioner, Central Excise Commissionerate-II, Chandigarh, which was declined vide communication dated 4-3-2002, Annexure P-19. 4. Learned Counsel for the petitioner has vehemently argued that Stenter machine owned by the petitioner and installed in its factory premises was sealed on 27-10-2000. The machinery was illegally sealed as there were no pending dues of the petitioner in respect of which the respondents were competent to seize or attach the machinery of the petitioner. Still further, the seals have not been opened by the respondents and, therefore, the petitioner has been deprived of the right to use the machinery which has affected the civil rights of the petitioner. 5. On behalf of the respondents it was submitted that Stenter machine was not seized or attached in pursuance of any recovery against the petitioner. Such machine was detained in pursuance of the powers conferred under Rule 230 read with Rule 96ZQ(7) of the Central Excise Rules, 1944 (for short "the Rules"). Since the issue of ownership of the Stenter machine has been decided in favour of the petitioner, the petitioner has been informed that he is at liberty to start manufacturing process as and when it liked and there is no legal embargo. It has been categorically stated in Para No. 3 (Preliminary Submissions) of the written statement that the petitioner is at liberty to break open the seals or do whatever with the Stenter and operate the machine accordingly. 6. After hearing learned counsel for the parties and going through the record of the case, we do not find any merit in the present writ petition. 7. There was a dispute regarding the ownership of Stenter machine. Such dispute was referred to the Arbitrator who vide his award dated 15-5-2001, Annexure P-11, has decided the issue of ownership of the machine in favour of the petitioner. Consequent to such decision of ownership of machine, the respondents have communicated to the petitioner on 21/24-9-2001 that there is no legal embargo and the petitioner could have started manufacturing activities as and when it liked. Consequent to such decision of ownership of machine, the respondents have communicated to the petitioner on 21/24-9-2001 that there is no legal embargo and the petitioner could have started manufacturing activities as and when it liked. It has been further mentioned that the department is in no way a hurdle in starting of the unit of the petitioner. 8. The machine was detained on 27-10-2000 by the respondents in exercise of the powers conferred under Rule 230 read with Rule 96ZQ(7) of the Rules as respondent No. 3 has failed to make payment of Rs. 22 Lacs and interest payable thereon demanded by way of duty determined under Rule 3 of Hot Air Stenter Independent Textile Processor Annual Capacity Determination Rules, 2000 read with Rule 96ZQ of Central Excise Rules, 1944 . The said machine was detained as it was alleged to be that of respondent No. 3. Once the issue of ownership of the said machine was decided, the petitioner has been informed that it is at liberty to deal with the machine as it liked. 9. The machine was sealed on 27-10-2000 by the respondent-department in view of the communication of the petitioner wherein it has sought a certificate that the factory is no more working or workable and excisable since 22-10-2000. Under the Hot Air Stenter Independent Textile Processor Annual Capacity Determination Rules, 2000, the licencee is required to pay the annual duty in terms thereof. The seal was effected on the representation of the petitioner itself that the factory is no more working or workable and excisable since 22-10-2000. 10. In view of the above, we do not find any illegality in the communication dated 21/24-9-2001, Annexure P-15, and order dated 14-3-2002, Annexure P-19, passed on the representation filed by the petitioner. The petitioner is at liberty to make use of the machinery in accordance with Hot Air Stenter Independent Textile Processor Annual Capacity Determination Rules, 2000. 11. No case for interference in exercise of the extraordinary jurisdiction of this Court is made out. Dismissed.