2015 (10) TMI 672 - HC - Central Excise

Evasion of duty - Imposition of penalty - Held that - Subsequent reduction of duty payable below ₹ 25 lac apparently renders continuance of proceedings arising out of complaint in question futile but since there is a reference to Central Board s earlier circular of 4th April, 1994 in respect of which, no submissions were advanced during the course of hearing and the said Circular is also not placed on record. Therefore, it would be appropriate not to quash the proceedings arising out of complaint in question by referring to Board s circular of 12th December, 1997 as Board s earlier circular of 4th April, 1994 has reference to in reply/response, which is neither on record nor any meaningful arguments were advanced in respect of Central Excise Board s earlier Circular of 4th April, 1994 during the course of hearing - Petition disposed of.

Summary

Issues:
Quashing of impugned order seeking dropping of proceedings under Section 9 of Central Excise and Salt Act, 1944 due to reduction of duty payable below the prescribed monetary limit for prosecution.

Analysis:
The petitioners sought to quash the order of 3rd November, 2006, which was related to their application for dropping proceedings arising from a complaint under Section 9 of the Central Excise and Salt Act, 1944. The petitioners argued that the continuation of the proceedings was an abuse of court process as the penalty amount had been reduced to an amount below the monetary limit of Rs. 25 lac for launching prosecution. They relied on a previous decision and highlighted the reduction in the duty imposable to Rs. 11,71,343, which was less than the prescribed limit. The respondent contended that the reduction in duty was a matter to be considered during trial and not under the court's inherent jurisdiction. The respondent referred to circulars from the Central Excise Board regarding the monetary limit for prosecution.

The Court noted the reduction in duty payable below Rs. 25 lac, which seemingly made the continuation of proceedings futile. However, the Court refrained from quashing the proceedings based on the circular of 12th December, 1997, as there was a reference to an earlier circular from 4th April, 1994, which was not on record or discussed during the hearing. The Court decided not to make a decision on the merits of the case but allowed the petitioners to raise their arguments before the trial court at the stage of hearing on the point of charge. The interim order was vacated, and the trial court was instructed to proceed with the case in accordance with the law promptly.

In conclusion, the petition was disposed of without making any comments on the case's merits to avoid prejudicing the petitioners before the trial court. The decision allowed the petitioners to present their arguments during the trial court proceedings regarding the reduction in duty payable and the monetary limit for prosecution.