Bombay High Court
Amit Anand Jamkhindikar vs The Union Of India Through The Ministry ... on 12 December, 2023
Author: Mangesh S. Patil
Bench: Mangesh S. Patil
2023:BHC-AUG:26311-DB
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD.
WRIT PETITION NO.11651 OF 2023
Amit Anand Jamkhindikar
Age : 42 years, Occu : Service,
Resident at : Chakala road,
Andheri (East), Mumbai .. Petitioner
Versus
1. The Union of India
Through the Ministry of Finance,
Department of Revenue,
Government of India,
Address at : Room No. 48C, North Block,
New Delhi
2. The Central Board of Excise and Customs
Government of India
Address at : 815, Nehru Place Market Road,
Nehru Place, New Delhi
3. The Commissioner
Goods and Service Tax (GST),
Address at : GST Bhavan, N5,
Town Center, CIDCO Cannought,
Aurangabad, Maharashtra
4. The Director General of Vigilance
Customs & Central Excise,
Address at : 2nd Floor, Hotel Samrat,
Chanakyapuri, New Delhi
5. The Chief Commissioner,
GST and Central Excise (Nagpur Zone),
Address at : GST Bhavan, Post Box No. 81,
Telangkhedi Road, Civil Lines,
Nagpur
6. Endress + Hauser Wetzer (India) Pvt Ltd.,
A Private Limited Company
incorporated and registered under the provisions
of the Companies Act, 1956
2
Having its Registered Address at :
Plot No. 171 - 173, MIDC Waluj,
Aurangabad, Maharashtra ..Respondents
...
Mr. Amit Anand Jamkhindikar, Petitioner - In Person
Mr. Ajay G. Talhar, DSGI for the Respondent - UOI
...
AND
WRIT PETITION NO. 11660 OF 2023
Amit Anand Jamkhindikar
Age : 42 years, Occu : Service,
Resident at : Chakala road,
Andheri (East), Mumbai .. Petitioner
Versus
1. The Union of India
Through the Ministry of Finance,
Department of Revenue,
Government of India,
Address at : Room No. 48C, North Block,
New Delhi
2. The Central Board of Excise and Customs
Government of India
Address at : 815, Nehru Place Market Road,
Nehru Place, New Delhi
3. The Commissioner
Goods and Service Tax (GST),
Address at : GST Bhavan, N5,
Town Center, CIDCO Cannought,
Aurangabad, Maharashtra
4. The Director General of Vigilance
Customs & Central Excise,
Address at : 2nd Floor, Hotel Samrat,
Chanakyapuri, New Delhi
5. The Chief Commissioner,
GST and Central Excise (Nagpur Zone),
Address at : GST Bhavan, Post Box No. 81,
Telangkhedi Road, Civil Lines,
Nagpur
3
6. Endress + Hauser Flowtec (India) Pvt Ltd.,
A Private Limited Company
incorporated and registered under the provisions
of the Companies Act, 1956
Having its Registered Address at :
M - 171 to 176, MIDC Waluj,
Aurangabad, Maharashtra ..Respondents
...
Mr. Amit Anand Jamkhindikar, Petitioner - In Person
Mr. Ajay G. Talhar, DSGI for the Respondent - UOI
...
CORAM : MANGESH S. PATIL
AND
NEERAJ P. DHOTE, JJ.
DATED : DECEMBER 12, 2023
ORAL JUDGMENT :
. In spite of the petitioner having been permitted to conduct
the matters in-person, the cause list shows the names of his erstwhile
advocates. The learned advocates stand discharged.
2. Heard the petitioner in-person in both the matters and also
Mr. Talhar, learned DSGI.
3. The petitioner is aggrieved by the fact that in spite of the
information furnished by him regarding the respondent establishments
having illegally derived the benefits of CENVAT credit, the revenue
department having issued the show cause notices pursuant thereto, still
those were ultimately dropped by passing appropriate orders.
4. The issue essentially is as to if the petitioner who is merely
an informant and who would have been entitled to fetch some reward
under the guidelines can question the legality and sustainability of the
orders passed by the authorities dropping the proceedings pursuant to
the replies given to the show cause notices. As a corollary the issue
would be, whether such an informant without there being any recovery
of revenue, imposition of any penalty or interest, would be entitled to
claim the reward.
5. The petitioner in-person made a vehement attempt to
demonstrate as to how the orders were passed without being sufficient
and cogent reasons to drop the show cause notices. He would submit
that though the establishments had undeservedly derived the benefits of
CENVAT credit, the authorities have ignored it. He would further submit
that since ultimately he would be the beneficiary of the reward, he has
every right to assail the orders passed by the authorities dropping the
show cause notices.
6. Though the party in-person fairly conceded that there was
no recoveries made pursuant to the information given by him, according
to him, he is entitled to derive the benefit of observations of the
Supreme Court in the matter of Union of India vs. R. Padmanabhan,
Appeal (Civil) No.2769 of 1999 decided on 13.08.2003.
7. The learned DSGI Mr. Talhar strongly opposes the locus
standi of the petitioner for raising question in respect of legality of the
orders passed by the authorities dropping the proceedings whereby
notices to show cause issued to the establishments have been recalled.
He would then submit that without there being any recovery at the
instance of the petitioner, the guidelines of the scheme do not permit
any reward.
8. Having considered both the sides, at the outset it is
necessary to note that the petitioner is an informant who is seeking to
derive the benefit of a scheme viz. Guidelines for grant of Reward to
Informers and Government Servants, 2015 (hereinafter referred to as
the 'Guidelines') whereby he would have been entitled to have some
reward, having informed authorities about the circumstances under
which the establishments had illegally derived the CENVAT credit.
9. In our considered view, when the Central Excise Act, 1944
and CENVAT Credit Rules, 2004 provide for the mechanism for even
recovery of the CENVAT credit illegally obtained, this cannot happen at
the instance of the third party or a stranger. Permitting an informant to
indirectly put up a challenge to the orders would lead to catastrophic
circumstances. It is not that the authorities have not taken cognizance of
the information furnished by the petitioner. Pursuant to his information,
show cause notices were issued to the establishments in both these
matters, reply was solicited and by reasoned orders, the notices have
been dropped. In our considered view, neither this Court in the present
proceedings can indirectly examine sustainability of both these orders,
nor can the petitioner be permitted to do it. To put it shortly, the
petitioner who is merely an informant and should be interested in the
reward if and when some recovery is made by the revenue, has no locus
standi to challenge the basic order whereby the show cause notices
issued have been dropped by reasoned orders.
10. Admittedly, no recovery has been made pursuant to the
information furnished by the petitioner. If that be so, that being a sine
qua non for any reward particularly when it is proportionate to the
recoveries being made, the petitioner without there being any recovery
of the revenue is not entitled to call upon us in exercise of the powers
under Article 226 of the Constitution of India to examine the legality
and sustainability of the orders dropping the recovery proceedings.
11. In both these matters, the petitioner was expressly informed
as under:
(i) Reply in Writ Petition No.11651 of 2023:
"The complainant has raised the grievance for processing
reward as per Reward Guidelines. In this regard, on the basis
of information given by the complainant, searches were
conducted at the factory of M/s. Endress & Hauser Flowtec
(India) Pvt. Ltd. and M/s. Endress & Hauser Wetzer (India)
Pvt. Ltd., Aurangabad. After investigation, SCN No. 69/CEX/
Commr/2016-17 dated 08.02.2017 for demand of duty of
Rs.38,66,84,429/- was issued to M/s Endress & Hauser
Flowtec (India) Pvt. Ltd and SCN No.09/CEX/Commr/2018
dated 12.04.2018 for demand of duty of Rs.4,57,47,242/- was
issued to M/s. Endress & Hauser Wetzer (India) Pvt Ltd.
These two SCNs were adjudicated vide OIO
No.01/CEX/Commr/2018-19 dated 24.04.2018 and OIO No.
16/CEX/Commr/2018-19 dated 24.11.2018 respectively and
the demands were dropped in both the OIOs. As per Para
5.1.1 of the Reward Guideline issued vide Circular No.
20/2015 dated 31.07.2015, Informers and Government
Servants will be eligible for reward up to 20 percent of the net
sale proceeds of the contraband good seized (except items
listed in Para 5.2) and / or amount of duty / service tax
evaded plus amount of fine and penalty levied / imposed and
recovered in these two cases, Central Excise duty, interest and
penalty has not been recovered as both the SCNs have been
dropped by the adjudicating authority and also both the OIOs
have been accepted by the Review Committee. Hence, as per
Reward Guidelines, no reward can be sanctioned in these two
cases. Accordingly, the grievance is disposed of."
(ii) Reply in Writ Petition No.11660 of 2023 :
"The complainant has raised the grievance for processing
reward as per Reward Guidelines. In this regard, on the basis
of information given by the complainant, searches were
conducted at the factory of M/s. Endress & Hauser Flowtec
(India) Pvt. Ltd. and M/s. Endress & Hauser Wetzer (India)
Pvt. Ltd., Aurangabad. After investigation, SCN No. 69/CEX/
Commr/2016-17 dated 08.02.2017 for demand of duty of
Rs.38,66,84,429/- was issued to M/s Endress & Hauser
Flowtec (India) Pvt. Ltd and SCN No.09/CEX/Commr/2018
dated 12.04.2018 for demand of duty of Rs.4,57,47,242/- was
issued to M/s. Endress & Hauser Wetzer (India) Pvt Ltd.
These two SCNs were adjudicated vide OIO
No.01/CEX/Commr/2018-19 dated 24.04.2018 and OIO No.
16/CEX/Commr/2018-19 dated 24.11.2018 respectively and
the demands were dropped in both the OIOs. As per Para
5.1.1 of the Reward Guideline issued vide Circular No.
20/2015 dated 31.07.2015, Informers and Government
Servants will be eligible for reward up to 20 percent of the net
sale-proceeds of the contraband good seized (except items
listed in Para 5.2) and / or amount of duty / service tax
evaded plus amount of fine and penalty levied / imposed and
recovered. In these two cases, Central Excise duty, interest and
penalty has not been recovered as both the SCNs have been
dropped by the adjudicating authority and also both the OIOs
have been accepted by the Review Committee. Hence, as per
Reward Guidelines, no reward can be sanctioned in these two
cases. Accordingly, the grievance is disposed of."
12. We see no arbitrariness or illegality in these replies.
13. The petitioner is seeking to rely upon the guidelines,
therefore, it is also imperative to refer to the relevant provisions. PART I
of the guidelines lays down provisions regarding principles, eligibility,
quantum of reward, undertaking etc., and PART II provides for scheme
for grant of Reward to Informers and Government Servants. The
following clauses would be relevant.
"PART (I)
3. PRINCIPLES GOVERNING GRANT OF REWARD :-
3.1 Reward should not be granted as a matter of routine: -
Reward is purely an ex-gratia payment which, subject to guidelines,
may be granted based on the judgment of the authority competent
to grant rewards and taking into account facts and circumstances of
each case and cannot be claimed by anyone as a matter of right.
3.2 .......
3.3 Criteria for grant of reward :- In determining the reward
which may be granted, the authority competent to grant reward
will keep in mind the following:-
3.3.1 In cases of collection of information / intelligence, in respect
of cases of seizure made out / or infringements/ evasion of duty /
service tax etc.
3.3.2 In cases of successful investigation.
3.3.3 In cases of post investigation work.
3.3.4 In cases of Audit / special Audit in Central Excise and
Post Clearance Audit in Customs.
5. QUANTUM AND CEILING OF REWARDS :-
5.1.1 Informers and Government Servants will be eligible
for reward upto 20% of the net sale-proceeds of the contraband
goods seized (except items listed in Para 5.2 below) and / or
amount of duty / Service Tax evaded plus amount of fine and
penalty levied / imposed and recovered.
5.1.2 In respect of cases of detection of Drawback frauds or
abuse of duty exemption schemes under various Export Promotion
Schemes announced by the Government from time to time
unearthed on the basis of specific prior information, provided by
the informer or prior intelligence developed by the Government
Servants, the informers and Government Servants will be eligible
for reward upto 20% of recovery of drawback claimed fraudulently
and / or recovery of duties evaded under various Export Promotion
Schemes announced by the Government from time to time, plus
amount of fine / penalty levied / imposed and recovered.
PART (II) :
SCHEME OF GRANT OF REWARD TO INFORMERS AND
GOVERNMENT SERVANTS IN CASES OF RECOVERY FROM TAX
DEFAULTERS
(i) The reward scheme shall be extended to grant of
suitable reward to an informer who gives information regarding the
whereabouts, assets, immovable properties etc., of persons from
whom arrears of duty, tax, fine, penalty etc. (under the provisions
of the Customs Act, 1962, the Central Excise Act, 1944 and the
Chapter V of Finance Act, 1994 in so far as the said Act contains
provisions relating to Service Tax) are recoverable and the
information results in recovery of arrears.
(ii) The grant of reward shall be considered only in those
cases where the Chief Commissioner is satisfied that: -
a) All possible efforts have been made by the
Departmental officers to trace the defaulter /
details of defaulter's property; and
b) Information provided by the informer has been
instrumental in the recovery of arrears."
14. Aforementioned provisions from the guidelines would
clearly indicate that grant of reward is not expected to be a routine
matter and is subject to the guidelines. Grant of rewards taking into
account the facts and circumstances of each case has been left to the
judgment of the authority. More importantly, it has been expressly
mentioned that reward cannot be claimed as a matter of right. Again,
these guidelines explicitly make it clear that it is only awardable
where pursuant to the information, which has to be instrumental, results
in some recovery of arrears. Again, the quantum of reward has been
made proportionate to the recoveries. All these guidelines would clearly
demonstrate that any claim for reward even if it is to be considered
could be entertained only in case some recovery is made pursuant to the
information provided by the informant.
15. If such is the scheme, when in the matter in hand,
admittedly, no recoveries could be made pursuant to the information
provided by the petitioner, he is not entitled to claim reward much less
has any locus standi to question the orders whereby the show cause
notices issued to the establishments have been recalled by speaking
orders.
16. Reliance of the petitioner in the observations in
R. Padmanabhan (supra) is misplaced. He is reading only few sentences
therefrom out of context. The entire paragraph and the portion being
relied upon by the petitioner which we have underlined is as under:
"It is not in controversy that an amendment came to
be issued vide P. No. R-13011/5/89.Ad.v. of the department
of revenue in April 1989 limiting the total reward to Rs. 1
lakh for seizure and to a total limit of Rs.10 lakhs in ones
career, though there was dispute about its relevance and
applicability to the claim of the respondent on the ground
that it had no retrospective application to the seizure effected
on 24.2.1989, in this case. The decision of the Division Bench
rendered in affirmance of the one rendered by the Single
Bench suffer from a serious infirmity in not adverting
properly to the basics and fundamentals of the Scheme for
Rewards and in assuming to the contra that when an
informer could be given liberally, the Government servant
also, must be shown the same consideration, whereas a
careful scanning through may go to show that an Informant is
placed on a different pedestal than a Government servant.
The rewards are also to be and can be "upto 20%" or as the
case may be and not that invariably it must be as a rule 20%
of the estimated market value. Reward is purely an ex gratia
payment, subject to the Guidelines on the discretion of the
competent authority, though it cannot arbitrarily be denied or
refused at whim or fancy and it should specifically conform to
and must be shown to fall or claimed within the four corners
of the Scheme and not by any deviation or modulation of the
Scheme, as the Courts think it should be and if it cannot
come strictly within the four corners of it, such claim may
have to be dealt with only under the residuary powers
enabling the grant of reward. That part, being ex gratia, no
right accrues to any sum as such till it is determined and
awarded and, in such cases, normally it should not only be in
terms of the Guidelines and Policy, in force, as on the date of
consideration and actual grant but has to be necessarily with
reference to any indications contained in this regard in the
Scheme itself. The line of decisions relation to vested rights
accrued being protected from any subsequent amendments
may not be relevant for such a situation and it would be
apposite to advert to the decision of this Court reported in
State of Tamil Nadu Vs. M/s. Hind Stone & Ors [(1981) 2
SCC 205]. That was a case wherein this Court had to
consider the claims of lessees for renewal of their leases or for
grant of fresh leases under the Tamil Nadu Minor Mineral
Concession Rules, 1959. The High Court was of the view that
it was not open to the State Government to keep the
applications filed for lease or renewal for a long time and
then dispose them of on the basis of a rule which had come
into force later. This Court, while reversing such view taken
by the High Court, held that in the absence of any vested
rights in anyone, an application for a lease has necessarily to
be dealt with according to the rules in force on the date of the
disposal of the application, despite the delay, if any, involved
although it is desirable to dispose of the applications,
expeditiously. Therefore, the reward could not have been
allowed in this case completely ignoring the amendments,
which came into force in April 1989, merely because the
seizure was in February 1989. That apart, under the Scheme
final reward is postulated only on adjudication of the case
resulting in confiscation of the goods as found stated in
clause 6 of the Guidelines and that should, therefore, be
crucial and relevant date for consideration of award and,
therefore, the Guidelines, as are in force on that date, will be
really applicable and would relevant. Consequently, the
exclusion of the amendment, which was made in April 1989,
from consideration in this case, may not be proper, and the
conclusion to the contrary by the High Court, cannot be
sustained. The interpretation placed as though the restrictions
in clause 7 will have no relevance to the officers other than
the officers specified of the Department of Central Excise /
Customs cannot be justified, either on the language of the
Guidelines or on the conspectus of the Scheme for rewards.
The classification made is between informers on the one hand
and Government servants on the other - and not with
reference to any particular class of category of Government
servants alone. The specification of certain officers are meant
to illustrate the level and standard of their category / class
with particular reference to the gradation of offices they hold
and the granting authority or courts, if a need be, have to
necessarily arrive at the equivalence in other Departments as
well - from among the other class of Government servants, as
a whole, serving either under the State or Central
Government - and the Scheme cannot be mutilated otherwise
or moulded to suit the consideration of a particular or given
case, favourably. Clause 8.1.3 provides the necessary clue in
this regard and the consideration, if at all, has to be with
reference to the provisions contained in clause 4 and the
various Guidelines contained therein."
17. There is no substance in the petitions and the petitions are
liable to be dismissed.
18. Both the petitions are dismissed.
[NEERAJ P. DHOTE] [MANGESH S. PATIL]
JUDGE JUDGE
GGP
Signed by: Gajanan G. Punde
Designation: PA To Honourable Judge
Date: 18/12/2023 17:32:00
