2015 (9) TMI 570 - HC - Central Excise

Request for quashing of complaint - petitioner has not complied with the order of the Commissioner of Central Excise - Held that - Though the judgment in Anil Gupta v. Star India Pvt. Ltd. & Another 2014 (7) TMI 545 - SUPREME COURT was delivered on 07.07.2014, the Hon ble Supreme Court only laid down the law and did not state in the order that the order will have only prospective operation. Therefore, having regard to the provisions of Section 9AA of the Central Excise Act, 1944, which is in parimateria with Section 141 of the Negotiable Instruments Act, without impleading the partnership firm, prosecution initiated against the partners is not maintainable and on that ground, these petitions may be allowed. - Decided in favour of assessee.

Summary

Issues:
Seeking to quash proceedings in E.O.C.C.Nos.102, 99, 98, 100, 101 of 2009 on the file of the learned Additional Chief Metropolitan Magistrate for Economic Offences (E.O.II), Egmore, Chennai.

Analysis:
The petitioner filed petitions to quash the complaint pending before the Additional Chief Metropolitan Magistrate, citing non-compliance with the order of the Commissioner of Central Excise. The petitioner argued that the order of the Commissioner was set aside by the CESTAT in Appeal Nos. E/337 & E/338. Referring to the judgment in Anil Gupta v. Star India Pvt. Ltd., the petitioner contended that prosecution without impleading the partnership firm is not maintainable. The petitioner, being only a partner, asserted that the partnership firm, M/s. Urbane Industries, should have been included as an accused.

The Special Public Prosecutor acknowledged the relevance of the Supreme Court judgment regarding the necessity of impleading the partnership firm. However, he argued that since the prosecution was initiated in 2009 and the judgment was delivered in 2014, the petitioner cannot benefit from the later ruling. He suggested granting liberty to initiate proceedings against the partnership firm along with the petitioner.

The court rejected the Special Public Prosecutor's contention, emphasizing that the Supreme Court's decision did not specify prospective application. Citing Section 9AA of the Central Excise Act, akin to Section 141 of the Negotiable Instruments Act, the court held that prosecution without impleading the partnership firm is not sustainable. Consequently, the petitions were allowed, quashing the proceedings and granting liberty to the respondent to take further action against the partnership firm if legally permissible.

In conclusion, the Criminal Original Petitions were allowed, leading to the quashing of proceedings in E.O.C.C.Nos.102, 99, 98, 100, 101 of 2009. The respondent was given liberty to initiate fresh action against the partnership firm alongside the partners, subject to legal provisions.