2018 (8) TMI 95 - HC - Central Excise

Commission of offence under Section 9 and 9AA of the Central Excise Act 1944 - evasion of payment of duty - removal of excisable goods in contravention of the provision of the Act and the Rules made thereunder - failure to supply the information as required by the Rules and giving false information. Held that - It is admitted position in this case that genesis of the present complaint is the order in Original Case No.3/95 passed by the Commissioner of Central Excise New Delhi dated 29.12.1995 which confirmed demands for differential excise duty made on the Petitioner-Company vide show cause notice dated 27.03.1987 and levied penalty on the Petitioner-Company and the individual accused. The said order in original dated 29.12.1995 stood set aside by the CEGAT vide its judgment dated 04.09.1998 - In the instant case Union of India was asked to seek instructions as to whether any such withdrawal petition has been filed on behalf of the Department in terms of the aforesaid circular but no instruction has been received by the Union of India. Continuance of the criminal proceeding against the Petitioner in terms of order passed in Original Case No.03/95 dated 29.12.1995 will amount to abuse of process of the Court and mere harassment to the petitioner - application allowed.

Summary

Issues Involved:
1. Quashing of criminal proceedings under Section 482 of the Code of Criminal Procedure for alleged offences under Section 9 and 9AA of the Central Excise Act, 1944.
2. Interpretation of the judgment and order dated 10.09.2004 of the Hon'ble Supreme Court in ITC Limited Vs CCE, New Delhi and its impact on the present case.
3. Application of legal principles regarding quashing of criminal complaints based on exoneration in adjudication proceedings.
4. Examination of circular No.998/5/2015-CX dated 28.02.2015 issued by the Central Board of Excise and Customs regarding withdrawal of prosecutions in certain circumstances.

Analysis:
1. The petitioners sought the quashing of criminal proceedings under Section 482 of the Code of Criminal Procedure, challenging the complaint case pending before the Special Judge (Economic Offences), Patna, for alleged offences under Section 9 and 9AA of the Central Excise Act, 1944. The basis of the complaint was the demand of central excise duty confirmed by the Adjudicating Authority, leading to penalties imposed on the accused Company and its Directors.

2. The petitioners argued that the judgment and order dated 10.09.2004 of the Hon'ble Supreme Court in ITC Limited Vs CCE, New Delhi, which set aside demands raised against the petitioner by the department, eroded the basis of the present case. Similar complaints in other jurisdictions were quashed based on this judgment. The petitioners relied on legal precedents to support their claim for quashing the criminal proceedings due to the exoneration in adjudication proceedings.

3. The Court examined the history of the case, including the original order confirming demands and penalties, subsequent appeals, and the final judgment of the Hon'ble Supreme Court setting aside all demands against the petitioner. The Court noted the circular issued by the Central Board of Excise and Customs directing the withdrawal of prosecutions in cases where the assessee had been exonerated in adjudication proceedings. The Court emphasized that continuing the criminal proceedings in light of the Supreme Court's judgment would amount to an abuse of the court's process and harassment to the petitioner.

4. Despite seeking instructions from the Union of India regarding any withdrawal petition filed as per the circular, no such communication was received. The Court, after thorough analysis, quashed the entire proceeding of Complaint Case No.303-C of 1998, citing the authoritative pronouncement of the Hon'ble Supreme Court and the absence of any surviving demand against the petitioner. The application under Section 482 was allowed, bringing an end to the criminal proceedings against the petitioners.