2019 (1) TMI 1871 - HC - Central Excise

Stay on recovery proceedings - Section 35A of Central Excise Act - HELD THAT - Having regard to the fact that the recovery proceedings are seized of by the Appellate Tribunal, it is necessary that the criminal prosecution against the petitioners are initiated depending upon the decision of the Appellate Tribunal. Petition allowed.

Summary

Issues:
Setting aside an order passed by the Special Court for Economic Offences in a case involving Sections 9 and 9AA of the Central Excise Act, 1944; Contention regarding the stay of recovery proceedings by the Appellate Tribunal and its impact on the ongoing prosecution; Dispute over the continuation of criminal prosecution against the petitioners.

Analysis:
The judgment pertains to a case where the petitioners sought to challenge an order passed by the Special Court for Economic Offences, Bengaluru, in a matter concerning Sections 9 and 9AA of the Central Excise Act, 1944. The contention raised by the learned counsel for the petitioners centered around the fact that an appeal had been filed before the Customs, Excise and Service Tax Appellate Tribunal, Bengaluru, against the adjudication order issued by the Commissioner of Central Excise. It was highlighted that the Appellate Tribunal had stayed the impugned recovery, leading to the argument that the ongoing prosecution against the petitioners should be halted as well.

The judgment notes that the learned counsel representing the respondent did not contest the factual submission made by the petitioners. Considering the situation where the recovery proceedings were under the jurisdiction of the Appellate Tribunal, the court emphasized the importance of aligning the criminal prosecution with the Appellate Tribunal's decision. Consequently, the court allowed the petition, setting aside the order dated 9-11-2011 in C.C. No. 332/2011 and quashing the proceedings against the petitioners in the same case. The judgment reserved the liberty for the respondent to take appropriate action based on the outcome of the proceedings before the Customs, Excise and Service Tax Appellate Tribunal, Bengaluru, in the mentioned appeal numbers. Ultimately, the petition was disposed of in accordance with the above considerations.