The main legal point established in the judgment is the applicability of the provisions of the Customs Act to the matters specified under the Central Excise Act, and the necessity of issuing notice within the prescribed period for confiscation of goods and sale proceeds under the Central Excise Act.

1. The petition is filed for relief of declaration that the arrest of the petitioner was illegal, the seizure of amount of Rs. 45 lakh from possession of the petitioner was illegal and the proceeding like adjudication under the Central Excise Act cannot be held against the petitioner. Relief of return of the aforesaid amount seized by the officers of the Central Excise is also claimed. Both the sides are heard.

2. The petitioner is share holder of majority shares of one private company by name “M/s Rutuja Ispat Private Limited Company situated at Jalna, Maharashtra". Shri. Shailesh Badjate and Shri. Sushil Badjate, two sons of the present petitioner, are the Directors of the company and on the record they are conducting the business of this company. The petitioner and his two sons are living in the same premises situated in Jalna where the office of the company is also situated.

3. There was specific information to the officers of the Directorate General of Central Excise (Intelligence) Regional Unit Pune that aforesaid company was evading Central Excise Duty by not maintaining account of manufacturing of MS/TNT Bars and it was involved in clandestine removal of this product from the factory premises without payment of Central Excise duty. There was also information that this company was purchasing unaccounted MS ingots and billets for manufacturing of the aforesaid product. There was information that though this activity was not accounted in the returns, a separate record was prepared about the unaccounted manufacture, sale etc. of the aforesaid product and that record was available in the pen-drive and in the computer of the petitioner and his sons.

4. The officers of the Directorate General of the Central Excise and also the officers of Pune and Nasik Commissionorates took action and search of the premises by name “Shreyas”, Ahimsa Marg, near Jain Temple Jalna was taken. The premises was being used by the petitioner and his aforesaid two sons and all of them were living together. The officers recovered incriminating electronic data in the form of pen-drive, computer and laptop. Unaccounted amount of Rs.45 lakh was also recovered from this premises, particularly from the bedroom of the petitioner. From the factory premises situated at MIDC Jalna also incriminating material came to be recovered. The officers conducted search of the premises of few employees of this factory and from them also incriminating material came to be recovered.

5. It revealed during investigation that during the period 1-1-2009 to 7-3-2011 this company had manufacture MS/TNT bars valued more than Rs.140 crore but this company had submitted returns to the Central Excise Department of the goods manufactured worth Rs.26.16 crore. Meagre amount of Excise duty on this quantity of goods is paid. The record with regard to raw material purchased by the company, which was also unaccounted, was also found and it came to be seized.

6. As cash amount of Rs.45 lakh was found from the bed room of the petitioner, the petitioner and his two sons were asked to explain about possession of this amount. No satisfactory explanation was given by these persons. The petitioner tried to say that it was his own income and it was his income from profession as Tax Consultant. There were no income tax returns in respect of such huge amount. This amount is kept by the Excise Department in fixed deposit in a bank.

7. During investigation, the statements of employees of the factory are recorded. There is statement of person like Accountant, Prashant Jadhav and the statement shows that as per the instructions given by Sushil, he had maintained separate record of unaccounted purchase of raw material and unaccounted manufacture and sale of finished material. The statement reveals that separate electronic record was created in respect of these concealed transactions. Statement of Prashant shows that no Central Excise duty was paid in respect of this unaccounted manufacture and sal