M.C.Agarwal, J. - (1.) By this petition under Article 226 of the Constitution of India, the petitioner prays for the following reliefs : "(i) to issue a writ, order or direction in the nature of certiorari quashing the Detention Memos, dated 30-12-1999 and 31-12-1999 (Annexures 19A, 19F and 20); (ii) issue a writ, order or direction in the nature of mandamus commanding the respondents to permit the petitioner to run the Unit forthwith."
(2.) The petitioner's case is that it has an industrial unit manufacturing excisable goods i.e. M.S. Ingots/Runner Riser. Under Section 3A of the Central Excise Act, the Central Government has notified the aforesaid commodity and, therefore...in respect of the goods manufactured by the petitioner...excise duty is payable on the basis of...capacity of production which is to be determined by the Commissioner of Central Excise in accordance with the Induction Furnace Annual Capacity Determination Rules, 1997. In pursuance of this power, the Commissioner of Central Excise determined the annual capacity of the production of the petitioner's factory that contains two furnaces at...metric tonnes by an order, dated 19-3-1996 which are difference from 1-9-1997. It is claimed that since the electric connection of the petitioner's unit was disconnected, the petitioner had to shut down the production in both the furnaces and information of the shut down was given to the authorities concerned by a letter, dated 27-5-1998. During the period of closure, the petitioner moved two applications, dated 29th of June, 1998 and 2nd of July, 1998 requesting them to permit the petitioner to reduce the size of both the furnaces which will result in the reduction of their capacity from 1 MTs to 3 MTs. The respondent No. 2 vide letter, dated 5-8-1998 is alleged to have granted permission to change the installed capacity. The petitioner accordingly changed one furnace and vide a letter, dated 28th of August, 1998, made a request to redetermine the annual capacity of production and to assess the duty liability afresh. Subsequently when the power connection was restored, the petitioner informed the authorities that he will be starting production from one furnace only from 30-8-1998. The electric connection was restored for ... furnace only and by a letter, dated ...the petitioner made a request to surrender the second furnace which could not be run for want of electricity. It is claimed that this contention of the petitioner was verified and a verification report, dated 26-11-1998 has already been submitted. By an order dated 24-3-1999, the Commissioner of Central Excise is said to have redetermined the actual capacity of production of one furnace from 13376 MTs. To 10567.52 MTs. but he made no order regarding the second furnace on the ground that the same was not got verified. It is claimed that the necessary papers for verification had already been submitted by the petitioner vide various letters. Against the order, dated 24-3-1999, the petitioner claims that it has filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi which is pending. Vide a letter, dated 1-4-1999 the petitioner informed the respondents that he would be starting production from the second furnace with a changed capacity from 8 AM on 1-4-1999. Regarding the period during which the petitioner's unit remained closed, the petitioner has preferred a claim for abatement of excise duty in terms of Section 3A(3) read with Rule 96ZO(2). It is claimed that the petitioner has paid the entire duty as per installed capacity...claimed that after the verification of...the furnace, the Commissioner of Central Excise...and to refix the annual production capacity as ...under Section 4 and also to decide the abatement claim preferred by the petitioner on 3-11-1999 but the same has not been done. However, on 30-12-1999 the respondent No. 3 i.e. the Superintendent, Central Excise visited the premises of the petitioner and started misbehaving with the staff of the petitioner and passed a detention memo whereby two furnaces, one diesel generating set, three overhead cranes and two electric transformers were detained under Rule 230 of the Central Excise Rules, 1944 on the ground that the central excise dues amounting to Rs. 98 lacs were due from the petitioner. A copy of the detention memo is Annexure 19A to the petition. The respondents also detained finished goods worth about Rs. 49,94,990/- vide another detention memo of the same date, a copy of which is Annexure 19B. Simultaneously on the same date, the respondents visited the residential premises of the Managing Director of the petitioner's Company and detained several household goods including jewellery, relief bonds, FDRs. and cash. The total value of those assets detained from the residence is stated to be more than Rs. 1.5 crores. It is claimed that the entire exercise is illegal. In addition, one of the employees of the petitioner was also taken into custody and was produced before the Chief Judicial Magistrate, Kanpur for remand. It is claimed that the detention of the various goods was made as a sequel to an first information report lodged by the respondents against the Managing Director of the Company on 30-12-1999 in which many baseless allegations were made against him. It is claimed that no demand what-so-ever was pending against the petitioner because the various claims, as mentioned above, were yet to be adjudicated and the duty liability cannot be determined without adjudicating the claims and refixing the capacity of the second furnace. It is claimed that no notice of demand was issued before embarking upon the detention. It is claimed . that the petitioner is paying excise duty of Rs. 10 lacs per month and the action of the respondents in detaining the various properties is resulting in the stop-* page of production and revenue loss.
(3.) The respondents have filed a counter affidavit and also supplementary affidavit. It is claimed that in terms of Section 3A of the Central Excise Act, 1944, excise duty is fixed with respect to the installed capacity of furnaces in the factory and is not dependent on the actual production and clearance of the finished goods and in accordance with the determined annual capacity of production, more than Rs. 98 lacs are in arrears as excise duty from the petitioner. It is claimed that though the abatement claim pertains to the periods 28-5-1998 to 29-8-1998 and 30-8-1998 to 31-3-1999, the application for abatement was made as late as 3-11-1999. It is claimed that during the raid conducted on the premises of the petitioner, it was found that the actual capacity of both the furnaces was more than what was declared and the parameters of the crucible governing the capacity of the furnace were found changed resulting in the evasion of excise duty of more than Rs. 3 lacs per month. It is claimed that the demand of the excise duty was made through various letters, dated 21-4-1998, 29-4-1998, 8-6-1998, 2-6-1999 and 16-7-1999, copies of which have been annexed to the counter affidavit as Annexure 3 and, therefore, it is wrong to allege that no notice of demand was served before the action of detention of the goods. It is claimed that inspite of the said letters, the petitioner had failed to pay excise duty in accordance with the annual production capacity determined by the Commissioner vide orders, dated 19-3-1998 and 24-3-1999 and that under Rule 230 of the Central Excise Rules, the respondents were entitled to detain the goods. It is admitted that by letter, dated 3-11-1999, the petitioners submitted an abatement claim for the periods 28-5-1998 to 29-8-1998 and 30-8-1998 to 31-3-1999. It is claimed that the abatement claim is not admissible as the petitioner had failed to follow the specific and mandatory procedure as laid down under Section 96ZO(2) of the Central Excise Rules, 1944 read with Trade Notice No. 121/97, dated 7-10-1997 etc. A show cause notice to this effect has been issued to the petitioner vide a letter, dated 7-1-2000 and the matter is posted for personal hearing on 24-1-2000. Regarding the reduction of the capacity of the second furnace, it is stated that the parameters thereof have been verified on 17-11-1999 and the matter is under process.;