2012 (9) TMI 450 - HC - Central Excise

Demand of duty and penalty - Punishable offense - trial court discharged the accused from prosecution - Complaint under Section 9 of the Central Excises and Salt Act - assessee company manufactured and cleared eight varieties of such papers for which classification was claimed by the respondents under sub-heading 4805.90 of Central Excise Tariff Act, 1985 - It appears that with such characteristics such varieties of paper attracted classification under heading No. 48.06 of the said schedule instead of heading No. 4805.90 and said varieties were not entitled to concessional rate of duty as envisaged in Notification No. 25/84-C.E., - Held that - Complainant examined, Superintendent of Central Excise Department - He admitted in cross-examination that he had not visited the factory premises with the preventive staff. He is also not aware who took the sample which was sent for chemical examination - there is no evidence on record to prove the charge against the accused persons for commission of offence punishable under the Act - Magistrate has not exercised jurisdiction properly in closing the evidence of the complainant - complainant was not given reasonable time to adduce evidence - order is not sustainable and is accordingly set aside

Issues:
1. Revision against the order dated 31-3-2011 passed by the Judicial Magistrate, 1st Class, Kandaghat in Criminal Case No. 38/3/07/94.
2. Allegations under Section 9 of the Central Excises and Salt Act, 1944 against the respondents and S.S. Khaitan.
3. Classification of paper varieties under the Central Excise Tariff Act, 1985.
4. Proceedings against the respondents and S.S. Khaitan.
5. Pre-charge evidence and examination of witnesses.
6. Discharge of respondents by the learned Magistrate.
7. Lack of evidence and procedural errors in the trial court.
8. Requirement of sanction for prosecuting the accused.
9. Setting aside the order dated 31-3-2011 and directions for further proceedings.

Analysis:
1. The revision was filed against the order passed by the Judicial Magistrate, 1st Class, Kandaghat in a criminal case. The petitioner had filed a complaint under Section 9 of the Central Excises and Salt Act, 1944 against the respondents and S.S. Khaitan, alleging misclassification of paper varieties under the Central Excise Tariff Act, 1985.

2. The complaint involved allegations related to the manufacturing and classification of paper varieties by the respondent company. The samples were tested, and it was found that certain varieties were misclassified, leading to duty demand under Section 11A of the Act. The proceedings were initiated against the respondents and S.S. Khaitan, who was later dropped due to his demise.

3. The pre-charge evidence included the examination of witnesses, where the complainant's witness supported the prosecution case. However, procedural issues arose regarding the lack of direct involvement of the witness in sample collection and the absence of proof for sanction of prosecution against the accused persons.

4. The learned Magistrate discharged the respondents citing lack of evidence to prove the charges against them. However, concerns were raised regarding the closure of evidence after only two opportunities for the complainant to present pre-charge evidence, especially considering the seriousness of the allegations.

5. The judgment highlighted the requirement of sanction for prosecuting the accused, emphasizing that internal circulars do not mandate explicit sanction before filing a complaint. The order dated 31-3-2011 was set aside, directing further proceedings with only one opportunity for the complainant to produce evidence, ensuring a fair trial and adherence to legal procedures.

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