1979 (1) TMI 107 - SC - Central Excise

Whether the prosecution had made out its case? Held that - On a consideration of the evidence against the second accused we have no hesitation in agreeing with the trial Court that the prosecution has failed to prove any of the charges against him. So far as the first accused is concerned when the case for the prosecution is that the first accused used to give false T.P.I. numbers in his sale notes, the prosecution cannot rely on the No. in T.P.I. form for showing that the quality of the tobacco transported was the first quality. It may be that the first accused gave a wrong No. but that would not prove that he transported the first quality tobacco on which higher duty is payable under the guise of the second quality. Even taking into account this circumstance we are not satisfied that the case against the first accused has been proved beyond all reasonable doubt. Unable to confirm the conviction and sentence imposed upon the two accused. We set aside the judgment of the High Court and restore the order of acquittal of both the accused passed by the trial Court

Issues Involved:
1. Conspiracy under Section 120-B, Indian Penal Code (IPC).
2. Forgery under Section 465, IPC.
3. Using forged documents under Section 471, IPC.
4. Offenses under Section 9A and Section 9B of the Central Excises and Salt Act, 1944.

Issue-wise Detailed Analysis:

1. Conspiracy under Section 120-B, IPC:
The prosecution alleged that the first and second accused conspired to evade excise duty by transporting high-quality tobacco as low-quality tobacco. However, the court found "very little material" to support this charge. The High Court's inference that both accused acted in concert was deemed "unsupportable" because it was based on an incorrect assumption about the market price of the tobacco. The court noted that there was no evidence showing a "common interest" or any benefit derived by the second accused from the alleged conspiracy. Consequently, the charge of conspiracy was not established.

2. Forgery under Section 465, IPC:
The prosecution's case depended on sale notes Nos. 71, 9, and 26 (Exhibits DA, DB, and DC). The original sale notes recovered from the second accused showed erasures, but the court found that these erasures did not by themselves indicate forgery or fraud. The duplicate sale notes found with the first accused did not correspond to the originals, but this discrepancy alone was insufficient to prove forgery. The court concluded that there was no evidence of forgery or fraud from the documents relied upon by the prosecution.

3. Using Forged Documents under Section 471, IPC:
The prosecution claimed that the accused used forged sale notes to transport high-quality tobacco as low-quality tobacco to evade higher excise duty. However, the court found that the entries in the original sale notes recovered from the second accused did not support this claim. The entries showed the correct classification and duty paid, which would not result in any loss of revenue. Therefore, the charge of using forged documents was not proven.

4. Offenses under Section 9A and Section 9B of the Central Excises and Salt Act, 1944:
The prosecution alleged that the first accused used incorrect transport permit numbers (T.P.I.) and manipulated sale notes to evade excise duty. However, the court noted that the High Court itself had observed that the first accused had a practice of incorrectly filling the T.P.I. numbers. This inconsistency in the prosecution's case weakened the argument that the first accused transported first-quality tobacco under the guise of second-quality tobacco. The court found no evidence proving beyond reasonable doubt that the first accused committed offenses under Sections 9A and 9B of the Central Excises and Salt Act.

Conclusion:
The court set aside the judgment of the High Court and restored the order of acquittal of both the accused passed by the trial court. The prosecution failed to prove the charges of conspiracy, forgery, using forged documents, and offenses under the Central Excises and Salt Act beyond a reasonable doubt.

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