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2021 (6) TMI 677 - HC - Central ExciseClandestine removal - cut tobacco - evidence to establish the guilt of the petitioners regarding evasion of excise duty or clandestine removal of goods, present or not - criminal proceedings ended in acquittal but simultaneous departmental proceedings continued - HELD THAT - On a perusal of the complaint, it is to be noted that the averments therein are verbatim repetition of the averments in the show cause notice dated 05.12.1995. There cannot be any doubt that departmental proceedings and criminal prosecution can be initiated simultaneously. It is settled law that there cannot be any hard and fast rule as to whether the criminal proceedings have to be quashed after departmental proceedings are concluded in favour of the accused. It depends upon the fact situation arising in each case. The appeal has been allowed vide order dated 26.12.2013 by the CESTAT giving a clean chit to the accused - it was categorically held that the lower authority has not given any reasons to impose penalty on the accused and there is no evidence to that effect. The order of the appellate authority has attained finality. Thus, continuance of prosecution against the petitioners under self-same allegations contained in the departmental proceedings is an exercise in futility. In view of the fact that the Commissioner (Adjudication), directed the department to initiate further proceedings in law for time being in force, as the accused company was found to have evaded payment of duty under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11-A of the Act and confiscation was ordered and penalty was levied under the relevant Rules - It is settled law that the standard of proof in criminal proceedings is higher than the standard of proof in civil/departmental proceedings. In a reverse case, where criminal proceedings ended in acquittal but simultaneous departmental proceedings continued, the result of the criminal proceedings will not have any bearing on the departmental proceedings, as judgment of the criminal Court is not binding in civil or departmental proceedings. However, in the instant case, when the departmental proceedings ended in favour of the accused and moreover, when the prosecution launched is on the same set of facts and allegations, the continuance of prosecution would be gross abuse of process of law. The criminal petition is allowed.
Issues Involved:
1. Whether the criminal proceedings against the petitioners should be quashed. 2. Whether the findings of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) affect the criminal prosecution. 3. Jurisdiction of the Economic Offences Court, Hyderabad. 4. Delay in filing the complaint by the respondent. 5. Applicability of Article 20(2) of the Constitution of India (Double Jeopardy). Issue-wise Detailed Analysis: 1. Whether the criminal proceedings against the petitioners should be quashed: The petitioners filed a criminal petition to quash the proceedings in CC.No.170 of 2005. The case was based on allegations of evasion of excise duty and clandestine removal of cut tobacco. The petitioners argued that the departmental proceedings had already concluded in their favor by the CESTAT, which found no evidence of their guilt. It was contended that continuing the criminal prosecution on the same set of facts would be arbitrary and amount to double jeopardy. The court observed that the standard of proof in criminal proceedings is higher than in departmental proceedings and that the CESTAT had given a clean chit to the petitioners. Therefore, the continuance of prosecution would be a gross abuse of the process of law. 2. Whether the findings of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) affect the criminal prosecution: The CESTAT, in its order dated 26.12.2003, allowed the appeal of the petitioners and found no evidence to support the allegations of evasion of excise duty. The court noted that the allegations in the criminal complaint were based on the same facts and evidence as the departmental proceedings. The Supreme Court's decisions in K.C. Builders v. Assistant Commissioner of Income Tax and Radheshyam Kejriwal v. State of West Bengal were cited, which held that if a person is exonerated on merits in adjudication proceedings, criminal prosecution on the same facts cannot continue. The court concluded that since the CESTAT had exonerated the petitioners on merits, the criminal prosecution could not be sustained. 3. Jurisdiction of the Economic Offences Court, Hyderabad: The petitioners argued that the Economic Offences Court in Hyderabad did not have jurisdiction as the alleged offences were committed in Varanasi, Uttar Pradesh. However, the court did not delve deeply into this issue, as it quashed the proceedings on other grounds. 4. Delay in filing the complaint by the respondent: The petitioners contended that there was an unexplained delay in filing the complaint, as the CESTAT's order was passed on 26.12.2003, and the complaint was filed on 29.09.2005. The court noted that the delay and the fact that the allegations dated back to June 1995 contributed to the arbitrariness of the prosecution. 5. Applicability of Article 20(2) of the Constitution of India (Double Jeopardy): The petitioners argued that the criminal prosecution violated Article 20(2) of the Constitution, which prohibits double jeopardy. The court agreed that the prosecution on the same set of facts, after the petitioners had been exonerated by the CESTAT, amounted to double jeopardy. Conclusion: The court allowed the criminal petition and quashed the proceedings in CC.No.170 of 2005 against the petitioners, stating that the continuance of the prosecution would be a gross abuse of the process of law. The court emphasized that the findings of the CESTAT, which had exonerated the petitioners on merits, were binding and that the criminal prosecution on the same facts could not be sustained. Pending miscellaneous petitions, if any, were also closed.
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