LOK NATH PRASAD GUPTA Vs. UOI

JUDGEMENT

(1.) THIS is a petition filed by Loknath Prasad Gupta under article 226 of the Constitution of India praying for the issue of an appropriate writ, order or direction to the Customs and Central Excise Settlement Commission (hereinafter referred to as ,,CCESC) quashing their order passed on 29.02.2008 in so far as it relates to the duty/ liability of ` 38,82,97,992/- and in so far as it rejects the claim of the petitioner for (a) immunity from penalty of ` 40,00,00,000/- and (b) immunity from interest payable by the petitioner.

(2.) THE petitioner is the proprietor of M/s. Loknath Prasad Gupta carrying on business in the manufacture of "Khaini" (chewing tobacco) under the brand name "Raja" and "Champion". He owns two factories, one at Delhi and another at Kolkata. THE business is being carried on by him since 1987. THE factories are registered under the relevant provisions of the Central Excise Act, 1944 (hereinafter referred to as ,,Act).

(3.) THE officers of the Directorate General of Central Excise Intelligence searched the factories of the petitioner located both in Delhi and Kolkata on 31.05.2005. Searches were also conducted at the residence of the petitioner. On the basis of the materials collected during the search, several queries were raised and put to the petitioner. After examining the explanation and replies of the petitioner, and after considering the material gathered during the search, the Additional Director General of the Directorate of Central Excise Intelligence, who is respondent No.2 in the petition, issued a showcause notice seeking the explanation of the petitioner regarding the clandestine clearance of "Raja" brand Khaini amounting to ` 105,37,71,452/- for the period from 01.05.2001 to 31.03.2006. THE petitioner was called upon to show-cause why excise duty should not be paid by him on the above and also why no penal action shall be taken against him. THE petitioner was also asked to showcause why the seized Khaini should not be confiscated. THEre were two parts to the show-cause notice which were as under: -