1986 (12) TMI 46 - HC - Central Excise

Issues Involved:
1. Legality of removal of tobacco consignments without payment of excise duty.
2. Alleged criminal conspiracy to cheat the revenue.
3. Fabrication of documents and evidence.
4. Failure of prosecution to produce primary evidence.
5. Validity of acquittal of co-accused.
6. Propriety of the trial court's judgment.

Issue-wise Detailed Analysis:

1. Legality of Removal of Tobacco Consignments Without Payment of Excise Duty:
The judgment discusses the provisions under Section 3 of the Central Excises and Salt Act, 1944, which is the charging section for levying and collecting duties of excise on all excisable goods. The consignments of tobacco were allegedly removed from Lalgidi to Solapur without payment of excise duty. The prosecution's case was that except for the first consignment, none of the other 13 consignments reached Solapur, and documents were fabricated to show their arrival.

2. Alleged Criminal Conspiracy to Cheat the Revenue:
The accused, including K.S. Deshmukh, were charged under Section 120B read with Sections 420 and 471 of the Indian Penal Code, and Sections 5(1)(d) and 5(2) of the Prevention of Corruption Act. The prosecution alleged that the accused conspired to evade excise duty by falsely documenting the movement and re-warehousing of tobacco consignments. However, the court found that the evidence did not sufficiently establish a conspiracy between the accused and the consignor.

3. Fabrication of Documents and Evidence:
The prosecution argued that documents were fabricated to show the arrival and storage of tobacco consignments in Solapur. The trial court found discrepancies in the documents, such as over-writing of dates and the landlord's denial of consent for storage. However, the appellate court noted that the alleged over-writing did not constitute fabrication, as it did not serve any purpose, and the presence of tobacco smell and leaves in the Neelanagar godown indicated recent use for storage.

4. Failure of Prosecution to Produce Primary Evidence:
The court criticized the prosecution for failing to produce primary evidence, such as the complete records of the octroi Nakas. The negative evidence presented by the prosecution was deemed insufficient to prove that the consignments did not arrive in Solapur. The court emphasized the importance of producing primary evidence, especially when proving a negative fact.

5. Validity of Acquittal of Co-accused:
The trial court had acquitted Accused No. 2 S.L. Deshpande and Accused No. 3 R.A. Manoki. The appellate court noted that the State's appeal against their acquittal was not admitted, and therefore, their acquittal stood valid. The court also mentioned that the evidence related to these accused could not be re-agitated in the present appeal.

6. Propriety of the Trial Court's Judgment:
The appellate court found that the trial court had approached the case with a bias regarding the guilt of the accused. The trial court's findings were based on assumptions and did not consider the possibility of the accused disposing of the tobacco clandestinely. The appellate court dismantled the prosecution's theory and found that the evidence did not support the conviction of K.S. Deshmukh.

Conclusion:
The appeal succeeded, and the order of conviction and sentence passed by the lower court was set aside. The appellate court ordered that the Appellant K.S. Deshmukh be set at liberty forthwith, and the bail bond was canceled. The notices issued to the acquitted co-accused were discharged.

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