2022 (11) TMI 436 - HC - Central Excise

Clandestine removal - suppression of acquisition - acquittal of the accused - Sections 9(1)(b) and 9(1)(bb) read with Section 9-AA of Central Excise Act and also violation of Central Excise Rules, 1944 - HELD THAT - CESTAT had decided the issue, ultimately it has reduced the penalties and when the amounts payable are concerned, Accused No.1-Company is liable to pay Rs. 17,74,021/- towards BED and Rs.1,98,848/- towards AED totaling to Rs. 19,72,869/-. Ex.D6 which is a confidential circular enhancing the monetary limit for launching prosecutions to Rs.25 lakhs is not disputed. The said enhancement of monetary limit was prospective in nature and squarely applicable to the benefit of the appellant in the present facts and circumstances. The Hon ble Supreme Court in the case of Radhakrishna Nagesh v. State of Andhra Pradesh 2012 (12) TMI 1232 - SUPREME COURT held that under the Indian criminal jurisprudence, the accused has two fundamental protections available to him in a criminal trial or investigation. Firstly, he is presumed to be innocent till proved guilty and secondly that he is entitled to a fair trial and investigation. Both these facets attain even greater significance where the accused has a judgment of acquittal in his favour. A judgment of acquittal enhances the presumption of innocence of the accused and in some cases, it may even indicate a false implication. But then, this has to be established on record of the Court. This Court does not find any illegality in the orders of the learned Sessions Judge for relying upon Exs.D6, D7 and also D8 and finding that the benefit ought to have been extended to the appellants, the same cannot be held to be improper or not based on record - Appeal dismissed.

Summary

Issues:
Violation of Sections 9(1)(b) and 9(1)(bb) of Central Excise Act - Acquittal by Sessions Judge - Interpretation of circulars Ex.D6, D7, and D8 - Monetary limit for launching prosecution - Benefit of CENVAT credit - Applicability of judgments on fair trial and investigation.

Analysis:
The Criminal Appeal involved the appellant/complainant challenging the acquittal of the respondents by the Sessions Judge in a case concerning violations of Sections 9(1)(b) and 9(1)(bb) of the Central Excise Act. The appellant, Deputy Commissioner of Customs and Central Excise, alleged that the respondents evaded Central Excise Duty by procuring raw materials under fictitious names and using them for manufacturing finished goods. The Central Excise Officers found discrepancies during verification, leading to the issuance of show cause notices for payment of differential duty. The Commissioner confirmed the duty and confiscated the goods, accusing the respondents of deliberate suppression and evasion of duty, punishable under the Act.

The Special Judge initially convicted the respondents, but the Sessions Judge, on appeal, referenced circulars Ex.D6 and D7, which set guidelines for launching prosecution under the Central Excise Act. The Sessions Judge found that the prosecution proceedings were improper based on the monetary limit mentioned in Ex.D6, leading to the acquittal of the respondents. The Special Public Prosecutor argued that the duty imposed exceeded Rs.25 lakhs, contrary to the Sessions Judge's interpretation, citing the CESTAT order upholding the demand but allowing adjustment of CENVAT credit. The Supreme Court's precedent emphasized the presumption of innocence and fair trial, especially after an acquittal.

The Court upheld the Sessions Judge's reliance on circulars Ex.D6, D7, and D8, concluding that the benefit should have been extended to the appellants based on the monetary limit for prosecution. The judgment highlighted the importance of establishing any false implication on record, ultimately leading to the dismissal of the Criminal Appeal. The decision reinforced the significance of following legal guidelines and ensuring fair trial procedures, ultimately upholding the acquittal of the respondents based on the interpretation of relevant circulars and legal principles.