DEVRAJ TOBACCO COMPANY Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition under Article 226 of the Constitution of India, the petitioner seeks a direction to the respondent authorities to immediately de-seal the two machineries sealed by them from the premises of the petitioner, as reflected in the panchnama dated 29-6-2016 (Annexure "A" to the petition). The petitioner also seeks a direction to the respondent authorities to immediately release the raw materials and other materials seized by them, as reflected in the panchnama dated 29-6-2016 (Annexure "A" to the petition), on the petitioner executing necessary bond for this purpose.

(2.) The petitioner, a partnership firm, is engaged in the business of manufacturing of filtered cigarettes. It is the case of the petitioner that it has been issued excise registration certificate in Form RC-2 for manufacture of cigarettes. A seizure operation was conducted on the unit of the petitioner firm on 29-6-2016, whereby the officers of the Central Excise department seized various raw materials and packaging material from the premises of the petitioner firm. The materials included tobacco, silver foil, plastic sheet outside cigarette cover, carbon box, outer box, etc., total value whereof was assessed at Rs. 37,23,103/-. Two machines which were lying in the premises of the petitioner also came to be sealed by the excise officers. Thereafter, a complaint being Investigation No. INV/DGCEI/VRU/33/2016-17 came to be registered with the Gorva Police Station, District Vadodara for the offences punishable under Sections 9(1), (b), (bb) and 9(1)(c) of the Central Excise Act, 1994, pursuant to which the deponent of the petition (hereinafter referred to as the "deponent") who is a partner of the petitioner firm came to be arrested and was subsequently granted regular bail by an order dated 17-10-2016 passed in Criminal Miscellaneous Application No. 19605 of 2016, subject to certain terms and conditions. Pursuant thereto, the deponent has deposited an amount of Rs. 10,00,000/- within a week from the date of release and it appears that subsequently, an application has been moved for modification of the said order.

(3.) Mr. S.P. Majmudar, learned advocate for the petitioner submitted that at the time of search and seizure on 29-6-2016, both the machines came to be sealed with a direction to the petitioner not to tamper with or remove the seals without written permission and supervision of the Central Excise Officers. The attention of the court was invited to the show cause notice dated 7-8-2016 issued by the Additional Director General, Directorate General of Central Excise Intelligence, to point out that the same does not contemplate confiscation of the machinery which has been sealed by the authorities. It was pointed out that the scheme of seizure and confiscation, etc., even in relation to the Central Excise Act, 1944 is contained in Sections 100 to 110A of the Customs Act, 1962, however, there are no specific provisions vis- -vis sealing of goods. It was pointed out that under sub-section (2) of Section 110 of the Customs Act, where any goods are seized under sub-section (1) thereof, and no notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of goods, the goods shall be returned to the person from whose possession they were seized. It was submitted that in the present case, despite the fact that no show cause notice has been issued qua the sealed machineries, the same have not been de-sealed though a period of more than six months has elapsed. Moreover, no order has been passed as contemplated under the proviso to sub-section (2) of Section 110 of the Customs Act, extending the period of seizure for any further period. Therefore, continuation of the seizure is not legal. The attention of the court was invited to the averments made in paragraph 6 of the affidavit-in-reply filed on behalf of the fourth respondent to submit that the said respondent has vide letter dated 4-1-2017 imposed conditions for de-sealing the two machines, to submit that when there is no power to seal or continue with the seizure of the machines, the question of imposing any conditions would not arise. It was, accordingly, urged that the respondents be directed to forthwith de-seal the two machines unconditionally and to release the raw materials seized, upon the petitioner executing appropriate bond in that regard.