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Issues Involved:
1. Quashing of criminal proceedings based on findings of the Appellate Tribunal. 2. Liability of the petitioner as the Chairman of the Board of Directors. Detailed Analysis: Issue 1: Quashing of Criminal Proceedings Based on Findings of the Appellate Tribunal The petitioner sought to quash the criminal proceedings pending against him in the court of Chief Judicial Magistrate (Economic Offences) on the grounds that the Appellate Tribunal had found no evasion of duty. The facts of the case reveal that Central Excise, Anti-Evasion Staff conducted a stock verification on 27-11-1982 at the factory premises of M/s. Modern Syntex (India) Limited, resulting in the seizure of 131 cases of yarn found in excess of the balance in the statutory RG-I register. The Collector, Central Excise, Jaipur, imposed penalties and ordered confiscation of goods, which was later contested in the Appellate Tribunal. The petitioner argued that the Tribunal's finding, which stated that the 131 cases of yarn were cleared on payment of duty and returned by customers for defects, should lead to the quashing of criminal proceedings. However, it was noted that the departmental proceedings were based on correspondence without recording evidence. The Court examined precedents, including the Supreme Court's judgment in Uttam Chand v. I.T.O., where criminal prosecution was quashed based on the Appellate Tribunal's findings. However, the Court distinguished the present case, noting that the prosecution was based on physical verification of goods, not merely on the findings of the Collector. The Supreme Court's decision in P. Jayappan v. S.K. Perumal was cited, emphasizing that criminal courts must independently judge cases based on evidence presented before them, irrespective of departmental findings. The Court concluded that the criminal proceedings could not be quashed solely based on the Tribunal's findings, as the prosecution was initiated on the basis of a search and physical verification of goods in the factory premises. Issue 2: Liability of the Petitioner as the Chairman of the Board of Directors The second argument by the petitioner was that he, as the Chairman of the Board of Directors, was not responsible for the company's affairs and there was no evidence or allegation against him in this regard. The Court referred to Section 9(1) of the Central Excises and Salt Act, 1944, which holds individuals personally liable for offences under the Act, and noted that liability cannot be extended to others merely by virtue of their position. The Court cited the Supreme Court's judgment in Municipal Corporation of Delhi v. Ram Kishan Rohtagi, where proceedings against company directors were quashed due to the absence of specific allegations or evidence of their involvement in the offence. Similarly, the Court found no allegations or evidence against the petitioner that he was in charge of or responsible for the company's conduct at the time of the offence. The Court also noted that Section 9AA, which could impose liability on company officials, was introduced in 1985 and was not applicable to the offence committed in 1982. Consequently, the Court quashed the criminal proceedings against the petitioner on this ground. Conclusion The petition was partially allowed. The criminal proceedings against the petitioner were quashed based on the lack of specific allegations or evidence of his involvement in the offence, while the argument to quash the proceedings based on the Appellate Tribunal's findings was rejected.
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