2021 (9) TMI 1105 - HC - Central Excise

Levy of penalty u/r 26 of CER - Validity of summon order and non-bailable order - evasion of Central Excise Duty - case of the department is entirely based upon statements obtained under official pressure and duress - cross-examination of various persons whose statements are being relied upon - HELD THAT - Notice on behalf of opposite party-1 has been accepted by learned Additional Solicitor General of India. Sri Ramesh Chandra Shukla has accepted notice on behalf of opposite party no.2. List /put up this case as fresh in the week commencing 22.11.2021.

Summary

Issues:
Challenge to summoning order and non-bailable warrant, Violation of principles of natural justice, Prosecution sanction and criminal complaint under Sections 9 and 9AA of the Act, Pending cross-examination of witnesses, Abuse of process of law.

Analysis:
The judgment involves a challenge to the summoning order and non-bailable warrant issued against the applicant, who is the Director of a company engaged in the manufacture of Pan Masala and Gutkha. The applicant contests the imposition of penalties for alleged evasion of Central Excise Duty, arguing that the case is based on statements obtained under duress and official pressure. Despite previous court orders directing reconsideration of decisions and providing cross-examination opportunities, the Commissioner confirmed the demand against the company, leading to the filing of a criminal complaint under Sections 9 and 9AA of the Act, along with IPC sections. The applicant alleges an abuse of process of law due to the continuation of proceedings without finalizing the demand and cross-examining all witnesses.

The judgment also addresses the issue of violation of principles of natural justice, emphasizing the importance of providing opportunities for cross-examination and following judicial precedents. The applicant highlights the necessity of fair procedures in adjudication proceedings and raises concerns regarding the reliance on witness statements without granting cross-examination opportunities. The court acknowledges the significance of adhering to principles of natural justice and directs that proceedings continue without passing final orders until uncertainties regarding witness statements are resolved.

Furthermore, the judgment discusses the prosecution sanction accorded by the Commissioner and the subsequent filing of a criminal complaint. The applicant challenges the legality of the prosecution sanction and argues for quashing the proceedings, citing delays in finalizing the demand and incomplete cross-examination of witnesses. The court is urged to consider the circumstances of the case and intervene to prevent an abuse of the legal process.

In conclusion, the judgment reflects a complex legal battle involving issues of procedural fairness, prosecution sanction, and the abuse of legal processes. The court is tasked with evaluating the validity of the summoning order, addressing concerns of natural justice, and determining the appropriateness of the criminal complaint in light of the applicant's contentions. The case underscores the importance of upholding procedural safeguards and ensuring a fair and transparent legal process for all parties involved.