2012 (1) TMI 394 - HC - Central Excise

Summary

Issues Involved:
1. Quashing of the entire proceeding including the order taking cognizance.
2. Stay of further proceedings of Complaint case no. 378C/2008 till the final disposal of the reference case pending in the Hon'ble High Court, Calcutta.

Summary:

Issue 1: Quashing of the entire proceeding including the order taking cognizance

The petitioners invoked the extra-ordinary jurisdiction of the High Court u/s 482 of the Cr. P.C, seeking to quash the entire proceeding including the order taking cognizance dated 18.11.2008 in Complaint case no. 378C/2008 by the Special Judge, Economic Offences, Patna. The Union of India, through the Assistant Commissioner, Central Excise Division, Bhagalpur, filed the complaint against the petitioners for offences u/s 9(i)(b), 9(i)(c), and 9(AA) of the Central Excise and Salt Act, 1944, alleging clandestine removal of branded chewing tobacco and evasion of central excise duty amounting to Rs. 69,81,987.84/-. The Chief Commissioner of Central Excise, Ranchi Zone, Patna, granted sanction for prosecution.

Issue 2: Stay of further proceedings of Complaint case no. 378C/2008

The petitioners, during the hearing, pressed for a stay of further proceedings of Complaint case no. 378C/2008 until the final disposal of the reference case pending in the Hon'ble High Court, Calcutta. They argued that the Hon'ble Tribunal had already stayed the recovery of central excise duty and penalty till the final disposal of the reference application by the Hon'ble High Court, Calcutta. The reference application raised significant legal questions, including whether the extension of the period of limitation beyond six months was justified in the absence of specific allegations of fraud or collusion, and whether the conclusion of clandestine removal of goods was based on suspicion and surmises.

The petitioners cited the decision in Commissioner of Income Tax, Mumbai vs Bhupen Champak Lal Dalal and another, where the Hon'ble Supreme Court held that criminal proceedings could be stayed if the conclusions of appellate authorities had a bearing on the criminal case. The petitioners argued that similar principles should apply to their case under the Central Excise Act, 1944.

The opposite party contended that the petition was not maintainable and that the petitioners should have filed a writ petition. However, the court held that it had ample power u/s 482 of the Cr.P.C to do complete justice between the parties.

Conclusion:

The court concluded that to avoid contradictory decisions, further proceedings of Complaint case no. 378C/2008 should be stayed until the final decision of the reference application pending before the Hon'ble High Court, Calcutta. The petition was disposed of with the direction that the learned Special Judge, Economic Offences, Patna, shall not pronounce judgment in Complaint case no. 378C/2008 until the final decision of the reference pending before the Hon'ble High Court, Calcutta in CEXA 3 of 2001.