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2019 (1) TMI 708 - HC - Central ExciseRecovery of Central Excise Duty short paid - imposition of penalty - allegations against the company in the complaint was that it had contravened the provisions of Rules 9(1), 52, 52A of the Central Excise Rules, 1944, inasmuch as, the company had falsely and fraudulently declared to the proper officer and on the cigarette packets, lower sale price with clear intent to evade payment of appropriate excise duty and availed exempted rates as applicable to cigarettes with lower sale price by concealment of correct price - Held that - The criminal complaint dated 31.8.1998 is based on the findings of the Commissioner of Central Excise, Delhi about the liability of the company to pay the excise duty which it had allegedly evaded. The basis of the said complaint itself goes with the judgment and order dated 10th September, 2004 passed by the Apex Court and, therefore, this Court is of the considered view that the proceedings of Criminal Case No. 875 of 1998 (Shailendra Sharma vs. ITC and others) cannot continue to prosecute the company and its directors. The proceedings of the Criminal Case No. 875 of 1998 (Shailendra Sharma vs. ITC and others) pending before the Court of Special Chief Judicial Magistrate, Meerut are hereby quashed.
Issues:
Two connected criminal applications under Section 482 of the Criminal Procedure Code - Quashing of proceedings of Criminal Case No. 875 of 1998 (Shailendra Sharma vs. ITC and others) - Allegations of evasion of Central Excise Duty - Interpretation of Notification regarding assessable value and excise duty rates. Analysis: The judgment pertains to two criminal applications filed under Section 482 of the Criminal Procedure Code seeking to quash the proceedings of Criminal Case No. 875 of 1998, involving allegations of evasion of Central Excise Duty. The case involved ITC Limited and its Directors, where the Commissioner of Central Excise, Delhi imposed significant penalties on the company and its Directors for evasion of excise duty. The complaint was based on alleged contraventions of Central Excise Rules regarding declaration of lower sale prices on cigarette packets to evade excise duty. The matter was under appeal before the Customs, Excise and Gold (control) Appellate Tribunal (CEGAT), now known as CESTAT. The CEGAT partially allowed the appeal, setting aside penalties but remanding the matter for fresh quantification of duty demand. Subsequently, the matter reached the Supreme Court, which in a joint judgment in Civil Appeal No. 70 of 1999 and Civil Appeal No. 6101 of 1998, set aside the demand raised against the appellant company, ITC Limited. The Apex Court observed that the notification aimed to establish specific rates for excise duty, and any deviation from this would lead to impractical and illogical outcomes, emphasizing the need for certainty in excise duty rates. Based on the Supreme Court's findings, the High Court quashed the criminal proceedings against ITC Limited and its Directors, citing the Apex Court's decision as a basis for setting aside the demands raised by the department. The judgment highlighted the importance of upholding the principles of justice and preventing the abuse of legal processes. The Court also referred to a relevant Supreme Court case to support its decision to quash the criminal proceedings in light of the absence of contraventions found in the adjudication proceedings. In conclusion, the High Court allowed both applications under Section 482 of the Criminal Procedure Code, thereby quashing the proceedings of Criminal Case No. 875 of 1998 pending before the Special Chief Judicial Magistrate, Meerut, in line with the Supreme Court's decision setting aside the demands of excise duty evasion against ITC Limited and its Directors.
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