2001 (11) TMI 97 - HC - Central Excise

Issues Involved:
1. Whether the complaint filed by the respondent against the petitioners suffers from any legal infirmities.
2. Whether the complaint is liable to be quashed based on the monetary limit for prosecution set by the Central Board of Excise and Customs.
3. Whether the circular dated 12-12-1997 is applicable to the facts of the case.
4. Whether the court taking cognizance of the complaint is bound by such circulars.

Issue-Wise Detailed Analysis:

1. Legal Infirmities in the Complaint:
The primary issue is whether the complaint filed by the respondent against the petitioners suffers from any legal infirmities. The petitioners are accused of unauthorizedly and clandestinely clearing Sodium Azide into the Domestic Tariff Area (DTA) without payment of Central Excise Duty, violating various provisions of the Central Excise Act, 1944, and the Central Excise Rules, 1944. The complaint alleges that the petitioners cleared 5078 Kgs. of Sodium Azide valued at Rs. 14,70,999.68 without following the prescribed procedures and without payment of duty amounting to Rs. 22,24,958.69. The allegations are based on searches conducted and documents recovered, which purportedly show unauthorized clearances and evasion of duty.

2. Monetary Limit for Prosecution:
The petitioners argue that the complaint should be quashed based on the monetary limit for prosecution set by the Central Board of Excise and Customs. They contend that the circular dated 12-12-1997 enhanced the monetary limit for prosecution from Rs. 5 lakhs to Rs. 25 lakhs, and since the amount involved in their case is only Rs. 14,16,910/-, no prosecution should have been launched. The court, however, notes that the circular dated 9-8-1990, which was not altered by the subsequent circular, states that in cases of habitual offenders, prosecution should be considered irrespective of the monetary limit if there is evidence of systematic evasion over a period of time.

3. Applicability of the Circular Dated 12-12-1997:
The court examines whether the circular dated 12-12-1997 is applicable to the facts of the case. It is observed that the alleged evasion and contravention relate to the period from 7-12-1990 to 14-7-1992, which is prior to the issuance of the circular dated 12-12-1997. The court concludes that the circular is prospective in nature and applies only to cases where the evasion of excise duty occurred after 12-12-1997. Therefore, the specified limit of Rs. 25 lakhs would not be applicable to the present case.

4. Binding Nature of Circulars on the Court:
The court addresses whether it is bound by the circulars issued by the Central Board of Excise and Customs. It refers to the Supreme Court's decision in Bengal Iron Corporation v. Commercial Tax Officer, which held that clarifications and circulars issued by the government represent their understanding of statutory provisions and are not binding on the courts. The court emphasizes that while administrative instructions may guide authorities, the ultimate question of contravention of the Act and Rules is for the court to decide. The court asserts that even if the prosecution is launched contrary to the circulars, the complaint itself is not liable to be quashed, and the proceedings must be allowed to continue.

Conclusion:
The court concludes that the complaint does not suffer from any legal infirmities and is not liable to be quashed based on the monetary limit set by the circular dated 12-12-1997. The allegations in the complaint indicate systematic evasion over a period of two years, making the earlier circular dated 9-8-1990 applicable. The court also clarifies that it is not bound by administrative circulars when acting in a quasi-judicial capacity. Consequently, the batch of criminal petitions is dismissed, and the trial court is directed to proceed with the enquiry and trial in accordance with the law, un-influenced by any observations made in this order. The trial judge may consider requests for dispensing with the personal attendance of the petitioners on certain conditions.

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