S.C.Rahi vs Union Of India & Another
2010 Latest Caselaw 2168 Del

             THE HIGH COURT OF DELHI AT NEW DELHI
%                                        Judgment delivered on: 26.04.2010

+            W.P.(C) 1677/2010

S.C.RAHI                                                        ..... Petitioner

                                        - versus -

UNION OF INDIA & ANOTHER                                        ..... Respondents

Advocates who appeared in this case:-

For the Petitioner : Mr C. Hari Shankar with Mr S. Sunil For the Respondent No.1 : Mr Asit Tiwari For the Respondents 2 & 3 : Mr Mukesh Anand with Mr R. C. S. Bhadoria, Mr Shailesh Tiwari and Mr Sumit Batra

AND

+ WP(C) 1112/2010 & WP(C) 2303/2010

S. L. BANSAL ..... Petitioner

versus

UNION OF INDIA & OTHERS ..... Respondents

Advocates who appeared in this case:-

For the Petitioner : Mr Tarun Gulati with Mr Neil Hilderth For the Respondent No.1 : Mr Roshan Lal Goel For the Respondents 2 & 3 : Mr Mukesh Anand with Mr R. C. S. Bhadoria, Mr Shailesh Tiwari and Mr Sumit Batra CORAM:-

HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE V.K. JAIN

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

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in Digest ?

BADAR DURREZ AHMED, J (ORAL)

1. In these writ petitions, which raise common issues, the

petitioners seek the quashing of the orders-in-original dated 18.12.2009 and

29.12.2009 passed by the Commissioner of Central Excise (Adjudication)

WP(C) Nos.1677/2010, 1112/2010 & 2303/2010 Page No.1 of 5 insofar as it operates against them. A prayer has also been made seeking a

direction restraining the respondents from taking any coercive action against

the petitioners pursuant to the impugned orders-in-original dated

18.12.2009 and 29.12.2009.

2. The sequence of events leading up to the filing of the writ

petitions began with the issuance of show cause notices to several exporters

as well as to the present petitioners, who are officers of the Central Excise

and Customs Departments. Certain other officials of the said departments

were also issued show cause notices and they have also filed writ petitions

but their case is somewhat different and, therefore, we are only dealing with

the present two officials, namely, Mr S. C. Rahi and Mr S. L. Bansal. The

former has filed WP(C) No. 1677/2010 and the latter (Mr S. L. Bansal) has

filed WP(C) No. 1112/2010 and WP(C) No. 2303/2010. Both these

officials were alleged to be involved in the activities concerning two

exporters, namely, Buildex Metals and National Steel Products Company

Limited.

3. The said show cause notices were adjudicated by the

Commissioner of Central Excise (Adjudication) by separate orders-in-

original passed on 30.10.2006.

4. Thereafter, the exporters, namely, Buildex Metals and National

Steel Products Company Limited as well as several other exporters filed

appeals before the Central Excise and Service Tax Appellate Tribunal in

respect of the said orders-in-original. The revenue, however, did not file

WP(C) Nos.1677/2010, 1112/2010 & 2303/2010 Page No.2 of 5 any appeal in respect of the orders-in-original pertaining to Buildex Metals

and National Steel Products Company Limited. There were allegations

against both the officials, namely, Mr S. C. Rahi and Mr S. L. Bansal in the

show cause notices issued to them. However, in the orders-in-original

referred to above, both these officials have been exonerated and no penalty

was levied on them. Thus, the position is clear that insofar as the

petitioners-- Mr S. C. Rahi and Mr S. L. Bansal -- are concerned, no

appeal was filed by the revenue in respect of them nor was any appeal filed

by the revenue in respect of Buildex Metals or National Steel Products

Company Limited in connection with which, notices have been issued to the

petitioners. However, Buildex Metals and National Steel Products

Company Limited had preferred appeals against the orders-in-original of

2006 before the Tribunal. The present petitioners were, however, not made

parties to those appeals inasmuch as Buildex Metals and National Steel

Products Company Limited were not at all concerned with the order of

exoneration of the present petitioners, namely, Mr S. C. Rahi and Mr S. L.

Bansal. This is an admitted position.

5. However, in the appeals filed by the exporters including Buildex

Metals and National Steel Products Company Limited as well as some other

appeals filed by the revenue, the Tribunal, after hearing the parties thereto,

set aside all the orders-in-original dated 30.10.2006 and remanded the

matters for de novo consideration by the Commissioner of Central Excise

(Adjudication). Subsequent thereto, the Commissioner of Central Excise

(Adjudication) passed fresh orders-in-original on 18.12.2009 and

WP(C) Nos.1677/2010, 1112/2010 & 2303/2010 Page No.3 of 5 29.12.2009. This time, however, a penalty of Rs 1 lac was imposed on

Mr S. C. Rahi and a penalty of Rs 2 lacs, in two of the cases, was imposed

on Mr S. L. Bansal.

6. The grievance of the petitioners is that there was no matter

pending before the Tribunal pertaining to the present petitioners when the

order of remand was made. Therefore, there was no question of their case

being re-considered by the Commissioner of Central Excise (Adjudication),

when he conducted his de novo adjudication. Consequently, no penalty

could have been imposed on the petitioners. The learned counsel for the

petitioners also submit that the department had accepted the finding of the

Commissioner of Central Excise in the first round whereby both the

petitioners had been exonerated. The department had consciously decided

not to prefer any appeal and, therefore, no appeals were filed against the

first round of orders-in-original insofar as the present petitioners are

concerned.

7. We have heard the counsel for the parties and are of the view

that the submissions made by the petitioners ought to be accepted. The

reason for this is very simple. The petitioners were not parties before the

Tribunal when the order of remand was passed by the Tribunal. They were

neither made parties by the exporters nor by the revenue and there was no

question of the petitioners having filed any appeal because they had already

been exonerated by the Commissioner of Central Excise (Adjudication).

Therefore, the order passed by the Tribunal, whereby the matter was

WP(C) Nos.1677/2010, 1112/2010 & 2303/2010 Page No.4 of 5 remanded for de novo consideration, could not, in any event, affect the

petitioners in any way. The petitioners had specifically brought to the

notice of the Commissioner of Central Excise (Adjudication) in the course

of the de novo proceedings that no proceedings could be taken up against

the petitioners in view of the fact that they were not parties before the

Tribunal and that in any event, the earlier orders-in-original, insofar as the

petitioners were concerned, had already been accepted by the department.

Despite this, the Commissioner of Central Excise (Adjudication), in the

second round of adjudication, imposed penalties on both the petitioners.

We are of the view that this could not have been done in the facts and

circumstances of the case. The remand by the Tribunal did not relate to

these petitioners as they were not parties before the Tribunal.

8. As a consequence, the impugned orders-in-original dated

18.12.2009 and 29.12.2009 are set aside to the extent they relate to the

petitioners. The writ petitions are allowed to this extent. The parties shall

bear their own respective costs.

The writ petitions stand disposed of.

BADAR DURREZ AHMED, J

V.K. JAIN, J APRIL 26, 2010 SR

WP(C) Nos.1677/2010, 1112/2010 & 2303/2010 Page No.5 of 5