1989 (4) TMI 89 - HC - Central Excise

Summary

Issues:
Prosecution of company directors under Central Excises and Salt Act, 1944 without specific allegations of overt acts against them.

Detailed Analysis:

Issue 1: Prosecution of Company Directors
The case involved the prosecution of the petitioners, who were directors of a company manufacturing excisable goods, for alleged violations under Sections 9(l)(b), 9(l)(bb), 9(l)(bbb), 9(l)(c), 9(l)(d), and Section 17 of the Central Excises and Salt Act, 1944. The complaint alleged that the accused had cleared excisable goods without paying the required Central Excise duty and without following the prescribed procedures. The petitioners contended that they could not be prosecuted without specific allegations of overt acts against them. The defense cited legal precedents to argue that directors could only be prosecuted if they were responsible for the conduct of the company's business. The court noted that the complaint contained allegations against all accused, stating that they were responsible for the company's acts and had removed goods without payment of duty. The court emphasized that the complainant needed to establish the case through evidence, leaving room for the accused to challenge liability if evidence did not support the allegations.

Issue 2: Lack of Mala Fide Intention
The defense argued that since the Collector of Central Excise and Customs found no mala fide intention to evade payment, there was no purpose in prosecuting the petitioners. However, the court examined the Collector's order and found no explicit finding that there was no intentional evasion of duty. The order indicated that even without mala fide intention, the petitioners had removed goods without paying duty, leading to evasion. Therefore, the argument that lack of mens rea should prevent prosecution was dismissed by the court.

Conclusion:
The court dismissed the petition, ruling that the prosecution of the company directors could proceed based on the allegations in the complaint. The lack of a clear finding of no mala fide intention by the Collector meant that the argument for non-prosecution based on lack of intent was not valid. The judgment highlighted the need for evidence to establish liability and allowed for challenges to prosecution if evidence did not support the allegations.