2013 (9) TMI 723 - HC - Central Excise

Criminal proceedings - Complaint u/s 9 and 9A of CE Act - Application for Quashing the Complaint u/s 9 and 9-A of the Central Excise Act, 1944 r.w. Sections 420, 467, 468 and 34 of the Indian Penal Code, 1860 Held that - Once, the department accepts that the sales were at the factory gate and the price for sale at the factory gate was available, there would be no justification to reject the same and take recourse to Central Excise Valuation Rules and add the differential between the freight amount charged at equalised rate and actual frieght expenses to the factory gate price would be applicable - The order which formed basis of the complaint in question had been set aside by the Appellate Tribunal, therefore, continuation of criminal proceedings against the petitioner would be nothing but an abuse of process of law Order set aside - Complaint u/s 9, 9-A of the Central Excise Act, 1944 read with Sections 420, 467, 468 and 34 IPC and all the subsequent proceedings arising therefrom were quashed.

Summary

Issues:
Quashing of criminal complaint under Central Excise Act, 1944 and IPC Sections 420, 467, 468, and 34 based on appeal outcome and setting aside of the order by the Appellate Tribunal.

Analysis:

The petitioner filed a petition under Section 482 of the Code of Criminal Procedure, 1973 seeking the quashing of Complaint No.186/2 dated 26.04.2000 under Sections 9, 9-A of the Central Excise Act, 1944 read with Sections 420, 467, 468, and 34 of the Indian Penal Code, 1860. The petitioner argued that they were not initially accused in the complaint and that the summoning order was without proper application of mind. Additionally, an appeal was filed against an assessment order, and until the appeal was disposed of, it was contended that the company could not be said to have evaded tax as required for initiating proceedings under the Central Excise Act. The petitioner also highlighted that the order forming the basis of the complaint had been set aside by the Appellate Tribunal, making the continuation of criminal proceedings an abuse of process of law.

The Court noted that the Commissioner of Central Excise had issued an order demanding duty, dropping another demand, directing payment of interest, and imposing a personal penalty on the company. During trial, the petitioner was summoned despite not being initially accused in the complaint. The Appellate Tribunal's order dated 11.12.2012 set aside the order of the Commissioner of Central Excise dated 01.02.1999, which formed the basis of the complaint. The Tribunal's judgment highlighted discrepancies in the valuation of sales and ruled in favor of the company, leading to the appeal being allowed and the impugned order being set aside.

Based on the outcome of the appeal and the setting aside of the order by the Appellate Tribunal, the Court allowed the petition and quashed Complaint No.186/2 dated 26.04.2000 under Sections 9, 9-A of the Central Excise Act, 1944 read with Sections 420, 467, 468, and 34 of the IPC, along with all subsequent proceedings arising from it. The Court found that continuing criminal proceedings against the petitioner would amount to an abuse of the legal process, given the Tribunal's decision setting aside the order that formed the basis of the complaint.