Harish Tandon, J. - (1.) Assailing the order of the Director General of Central Excise Intelligence, Zonal Unit by which the operation of the bank account of the petitioners is temporarily suspended, the petitioners have come up before this Court by filing the instant writ petition. Although the petitioners claim to be engaged in import and export of steel, ferro alloys, welding electrodes, agricultural equipments with spares and for their manufacturing activities, but on surprise visit the respondent No. 2 found that there is manufacturing activities of production of chewing tobacco through four numbers of FFS machines. The said authorities further found that the said machines are in running condition and the petitioners did not declare those machines to the Central Excise Department meaning thereby no registration was taken. The plant and machines were seized by the respondent authorities. Subsequently, an order was passed by the respondent authorities to the concerned banks of the petitioners not to allow any operation through the said accounts. While assailing the aforesaid action learned advocate appearing for the petitioners, submits that there is no power conferred upon the authorities to pass an interim order of attachment of the bank accounts pending investigation. In support of the aforesaid contention, the reliance is placed upon the unreported judgment of this Court in case of Shakuntala Singh v/s. Additional Director of Revenue Intelligence, Kolkata Zonal Unit & Ors. [W.P. No. 677 of 2012] [ : 2016 (332) E.L.T. 77 (Cal.)] and the judgment of the Allahabad High Court in the case of Raghuram Grah Private Limited v/s. Commissioner of Central Excise & Service Tax; reported in : 2005 (186) E.L.T. 50 (All.). According to the petitioners, no show cause notice is issued by the respondent authorities before passing an order for suspension of the operation of the bank accounts, even temporarily and, therefore, such action is violative of principles of natural justice.
(2.) Mr. Bharadwaj, learned advocate, appearing for the respondent authorities, submits that Sec. 121 of the Customs Act of 1962 empowers the authorities to confiscate the sale proceeds if the excisable goods are sold by a person having knowledge or reasons to believe that the goods are excisable goods. According to him, such power brings within itself the power to pass an interim order of attachment of the bank accounts in respect of the excisable goods having sold in the market. Mr. Bharadwaj vehemently submits that the unreported judgment relied upon by the petitioners cannot come into aid because of the distinguishing features as in the said case the goods were confiscated and further action was required to be taken under Sec. 124 of the Customs Act, 1962.
(3.) It is not in dispute that Sec. 121 of the Customs Act provides for confiscation of the sale proceeds of the excisable goods sold by a person having knowledge or reasons to believe that such goods are excisable goods. It has further come from the submission of the respondents that the goods manufactured by the petitioners attracts the fixed amount of excise duty on each machine per month and, therefore, to safeguard the interest of the revenue, the sale proceeds can be confiscated by invocation of the provisions contained in Sec. 121 of the Customs Act of 1962. Although the words 'smuggled goods' are used in Sec. 121 of the Central Excise Act of 1944 and the Rules made thereunder, the provision relating to the smuggled goods shall be deemed to be in reference to the excisable goods and, therefore, there is no ambiguity in interpreting Sec. 121 that it applies also in case of excisable goods. Ss. 122 and 122A of the Customs Act require the adjudication and the procedure for the adjudication relating to the confiscations and the penalties. Admittedly, the adjudication has not been done but the authorities have proceeded to prevent the operation of the bank account, in this regard. The reliance can safely be made on the observation of this Court in an unreported judgment which reads thus; "Section 142A which provides that notwithstanding anything to the contrary contained in any Central Act or State Act, any amount of duty, interest or any other sum payable by an assessee or any person under the Customs Act save as otherwise provided in Sec. 529A of the Companies Act, 1956, the Recovery of Debts Due to Banks and the Financial Institutions Act, 1991 and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 shall be the first charge on the property of the assessee or the person as the case may be, has no application. In this case no duty, penalty or interest has been adjudicated and/or even assessed as payable by the petitioner. There is no provision in the Customs Act for interim attachment of bank account pending investigation." (emphasis supplied);