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M/S CANNON INDUSTRIES PVT. LTD., MUMBAI versus THE CHIEF COMMISSIONER, CENTRAL EXCISE,

High Court of Punjab and Haryana, Chandigarh

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M/s Cannon Industries Pvt. Ltd., Mumbai v. The Chief Commissioner, Central Excise, - CWP-12277-2006 [2006] RD-P&H 7935 (27 September 2006)

C.W.P.No.12277 of 2006 [1]

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

C.W.P.No.12277 of 2006

Date of decision: September 27 , 2006

M/s Cannon Industries Pvt. Ltd., Mumbai

.. Petitioner

v.

The Chief Commissioner, Central Excise, Chandigarh and others .. Respondents

Present: Mr. Ashok Aggarwal, Senior Advocate with Mr. Alok Jain, Advocate for the petitioner.

Mr. Kamal Sehgal, Advocate for the respondents CORAM:
Hon'ble Mr.Justice Adarsh Kumar Goel

Hon'ble Mr. Justice Rajesh Bindal

1. Whether Reporters of local papers maybe allowed to see the judgment ?

2. To be referred to the Reporters or not ?

3. Whether the judgment should be reported in the Digest? Rajesh Bindal, J.

The petitioner has approached this Court by filing the present petition praying for the following substantive reliefs: "(i) a writ in the nature of Mandamus may kindly be issued calling for the complete record of the case and after perusal of the same; (ii) a Writ in the nature of Mandamus directing Respondent No.2 and 3 to supply the copies of the documents seized during the Search and Seizure on the premises bearing no. 863, Industrial Area "A", Ludhiana, conducted on 28.06.2006 (starting from 3.00 p.m.) and continuing till 29.06.2006 (upto 4.00 p.m.); (iii) a Writ in the nature of Mandamus directing respondent No.2 and 3 to permit making of the copies of the data contained in the hard disks of the computers seized during the Search and Seizure on the premises bearing no. 863, Industrial Area "A", Ludhiana, conducted on 28.06.2006 (starting from 3.00 p.m.) and continuing till 29.06.2006 (upto 4.00 p.m.);

C.W.P.No.12277 of 2006 [2]

(iv) a Writ in the nature of Mandamus directing respondent No.2 and 3 to return the record in original which does not pertain to the Central Excise and seized during the Search and Seizure on the premises bearing no. 863, Industrial Area "A", Ludhiana, conducted on 28.06.2006 (starting from 3.00 p.m.) and continuing till 29.06.2006 (upto 4.00 p.m.) and the Respondents, if required, may retain the photocopy thereof;

(v) a Writ in the nature of Mandamus directing Respondent No.2 and 3 to return the records in original seized during the Search and Seizure conducted in the aforesaid premises on 08.11.2004 and 09.11.2004, the photocopies of which were supplied at that point of time;

(vi) Issue a writ in the nature of certiorari quashing the preemptive action of the Respondent authorities in writing letters like letter (Annexure P-17) written to various Commissionerate of Customs (ICD) without application of mind and in undue haste which is maligning the reputation of the Petitioner company and adversely affecting the business of the Petitioner Company." Briefly, the facts, as pleaded in the petition are that the petitioner, who is engaged in the business of manufacturing of hosiery goods and textile items, is holder of one star status as Export House, granted under Exim Policy by the Regional Director of Foreign Trade, Mumbai. It is further alleged that annual turnover of the petitioner for the last two years is about Rs. 200 crores. A search and seizure operation was conducted in the premises of the petitioner-Company situated at 863, Industrial Area-A, Ludhiana from June 28, 2006 to June 29, 2006.

During the search, entire record including the computers along with monitors were seized. Despite requests, the respondents did not permit or supply the photo copies of the documents and the data contained in the hard disk of the computers. It is further pleaded that even on previous occasion, in November 2004, a similar search was carried out at the premises of the petitioner and the entire record along with computers were seized. It is further alleged that because of non-supply of seized record, the business of the petitioner has been affected adversely. The petitioner is not able to carry out the export as well as other statutory obligations, C.W.P.No.12277 of 2006 [3]

envisaged under various other statutes. The petitioner has further referred to and challenged communication dated June 29, 2006 from Joint Commissioner (Prevention) Central Excise, Ludhiana to the Commissioner of Customs (Export), Jawahar Customs House, Nhava Shieva and the Commissioner of Customs (ICD) ICD Tuglakabad, Patparganj, Sonepat, Kundli to the effect that preliminary investigation indicates bogus input invoices, non-existent manufacturing facility, seizure of very low value of goods, which were meant for export through scheduled ports. The request was made for immediate action for examination of the goods, drawl of samples and such other action as may be warranted based on examination. An intimation of the action taken was requested. The petitioner seeks return of the documents seized and quashing of the communication issued by the respondents which tarnish the image of the petitioner.

The provisions of the Central Excise Act, 1944 (for short, `the Excise Act'), relevant for determination of the point in issue, are extracted below: "12. Application of the provisions of Act 8 of 1878 to Central excise duties.- The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the [Customs Act, 1962 (52 of 1962)] relating to the levy of and exemption from customs duties, drawback of duty, warehousing, offences and penalties, confiscation, and procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by section 3."

Vide Notification No. 68/1963-CE Dated May 4th , 1963, as amended

up to date, issued under Section 12 of the Excise Act, various provisions of Customs Act, 1962 (for short, `the Customs Act') have been adopted which include Section 110 of the Customs Act. The relevant provisions of Section 110 of the Customs Act are extracted below:

"110. Seizure of goods, documents and things-- (1) If the proper officer has reason to believe that any goods are liable to confiscation C.W.P.No.12277 of 2006 [4]

under this Act, he may seize such goods; Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.

[(1-A) The Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification in the Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub- section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified.

(1-B) Where any goods, being goods specified under sub- section (1-A), have been seized by a proper officer under sub-section (1), he shall prepare an inventory of such goods containing such details relating to their description, quality, quantity, mark, numbers, country of origin and other particulars as the proper officer may consider relevant to the identity of the goods in any proceedings under this Act and shall make an application to a Magistrate for the purpose of -

(a) certifying the correctness of the inventory so prepared; or (b) taking, in the presence of the Magistrate, photographs of such goods, and certifying such photographs as true; or (c)allowing to draw representative samples of such goods, in the presence of the Magistrate and certifying the correctness of any list of samples so drawn.

(1-C) Where an application is made under sub-section (1-B), the Magistrate shall, as soon as may be, allow the application.] (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized; Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the [Commissioner of Customs] for a period not exceeding six months.

(3) The proper officer may seize any documents or things C.W.P.No.12277 of 2006 [5]

which, in his opinion, will be useful for, or relevant to, any proceeding under this Act.

(4) The person from whose custody any documents are seized under sub-section (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of an officer of customs." The dispute in the present case falls in a very narrow compass. The petitioner is seeking copies of the documents seized during search and seizure operation and also seeking copies of data contained in the hard disks of the computers, which were also seized. Further prayer is for return of original documents not seized by the Department and also for quashing of Annexure P-17, a letter written to various Commissionerates of Customs which, according to the petitioner, is adversely affecting its business.

As far as return of documents, seized during search and seizure operation, is concerned, learned counsel for the respondents does not dispute the right of the petitioner to get copies thereof. The only contention raised by him is that in spite of number of notices issued, the petitioner is not presenting himself for investigation. As far as making of copies from the data contained in the hard disks seized is concerned, the contention of the learned counsel for the respondents is that the petitioner had never sent a duly authorised person to make a statement and take the copies, in the absence of which the same could not be provided to the petitioner. As regards return of documents in original is concerned, according to him, the same are required for further investigation of the allegations levelled against the petitioner which is still continuing and cannot be returned at this stage.

However, in case the petitioner so desires, it can get the copies thereof. As regards quashing of letter (Annexure P-17) is concerned, contention of learned counsel for the respondents is that the same is nothing but a request made to different Commissionerates of Customs for examination of the goods and drawl of samples out of the export consignment sent by the petitioner.

Having heard learned counsel for the parties and finding that they are C.W.P.No.12277 of 2006 [6]

ad idem, as regards the right of the petitioner to get the copies of the documents seized, we need not dilate much on this issue and accordingly direct as under: (i) As regards the documents seized from the premises of the petitioner is concerned, it would be entitled to get the copies made thereof at its own cost by sending a duly authorised representative before the authority.

The originals thereof will be retained by the respondents.

(ii) As regards the making of copies of the data contained in the hard disks of the computers seized during search and seizure operation is concerned, it is directed that the petitioner will send an authorised person for the purpose to be present before the authority on the appointed date and time. The authorised person will verify that the seals contained on the package containing hard disks were intact and record his statement to that effect. Thereafter, in the presence of representatives of both the parties, three sets of print outs of the data contained in the hard disks shall be taken out at the cost of the petitioner. All the three copies, so printed, shall be signed by representatives of both the parties. One copy each shall be kept by both the parties for their use and one copy shall be retained in a sealed cover under the signatures of representatives of both the parties. The authorised representative of the petitioner, in whose presence the data from the hard disks shall be printed, will verify that the documents, the print out of which had been taken out, were contained in the hard disks seized.

(iii) As regards return of original documents seized during search and seizure operation is concerned, it is directed that the same shall be retained by the respondents till the investigation is complete. However, the petitioner shall be entitled to get the copies thereof at its expenses.

(iv) As regards the prayer for quashing of letter Annexure P.17 is concerned, from a perusal thereof, we find that the same is a kind of C.W.P.No.12277 of 2006 [7]

request for examination of the goods and drawl of samples because on preliminary investigation, some incriminating evidence was found against the petitioner. The letter may not be so happily worded, but still in substance, there is nothing against the petitioner, of which it can seek quashing of. Accordingly, we decline this prayer of the petitioner.

As far as apprehension of the respondents to the effect that the petitioner is not cooperating in the investigation is concerned, it is made clear that in case the petitioner does not respond to the notices or does not cooperate in the investigation, the respondents are at liberty to take whatever view they are entitled to in law.

The writ petition is disposed of in the manner indicated above.

(Rajesh Bindal)

Judge

(Adarsh Kumar Goel)

Judge

September 27 , 2006

mk


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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