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Issues:
1. Whether the acquittal by a Criminal Court binds a statutory Tribunal. 2. Whether the imposition of penalties by an adjudicating authority can be set aside due to acquittal by a Criminal Court. 3. Whether continuation of departmental proceedings is permissible after acquittal by a Criminal Court. Analysis: 1. The case involved an application for reference under Section 130(1) of the Customs Act, 1962, regarding penalties imposed on the applicants for transporting wrist watches of foreign origin under false labels. The applicants were acquitted by the Criminal Court, and the question arose whether this acquittal binds the Tribunal. The applicants argued that the acquittal is binding on the Tribunal as a question of law. However, the Tribunal held that the Criminal Court and Tribunal considered different evidence, making the acquittal not automatically setting aside the penalties imposed. 2. The Departmental Representative contended that the Tribunal had relied on employee statements and applied evidentiary principles not considered by the Criminal Court. The Tribunal noted that the Criminal Court's acquittal was based on giving the benefit of doubt and did not nullify the penalties imposed by the adjudicating authority. The Tribunal emphasized that important evidence considered by the adjudicating authority and Tribunal was not addressed by the Criminal Court, making the plea of automatic nullification of penalties legally untenable. 3. The applicants cited a ruling related to departmental proceedings post-acquittal in a different context. The Tribunal differentiated the facts of that case from the present situation, where the Department initiated criminal prosecution after adjudication proceedings. The Tribunal referenced a Supreme Court case emphasizing that departmental proceedings can continue even after a criminal acquittal if based on different evidence or charges. The Tribunal concluded that the acquittal by the Criminal Court does not prevent continuation of departmental proceedings based on separate evidence. 4. The Tribunal also discussed a Madras High Court ruling regarding the effect of acquittal on confiscation orders. It highlighted the inconsistency of allowing confiscation orders to stand while nullifying personal penalties post-acquittal. The Tribunal found no legal basis for the applicants' arguments and dismissed the application for reference under Section 130(1) of the Act, stating that no questions of law arose from the Tribunal's order warranting a reference to the High Court.
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