1993 (2) TMI 186 - AT - Central Excise

Issues Involved:

1. Demand of duty and imposition of penalties by the Collector, Central Excise.
2. Stay of the operation of the Order-in-Original.
3. Sanction and initiation of prosecution by the Central Excise authorities.
4. Tribunal's inherent powers under Section 35C of the Central Excises and Salt Act, 1944 and Rule 41 of the CEGAT rules.
5. Adjudication proceedings versus prosecution in criminal courts.

Issue-wise Detailed Analysis:

1. Demand of Duty and Imposition of Penalties:

The Collector, Central Excise, Chandigarh, through Order-in-Original No. 29/CE/91 dated 28-10-1991, demanded a duty of Rs. 60,52,808.37 under Section 11A of the Act from the appellants for clearances of excisable goods at a lower assessable value. Additionally, a penalty of Rs. 4,00,000/- was imposed under Rule 173Q of the Central Excise Rules, 1944, and a penalty of Rs. 2000/- under Rule 226 read with Rule 227 of the rules.

2. Stay of the Operation of the Order-in-Original:

Under Stay Order No. 212/92-A, dated 18-5-1992, the Tribunal observed that the merits of the case were contentious and arguable. It dispensed with the pre-deposit of the penalty amount of Rs. 4,02,000/- and ordered the appellants to pay the balance duty amount of Rs. 10,10,870/- within six weeks. During the pendency of the appeal, the Revenue authorities were directed not to pursue recovery proceedings.

3. Sanction and Initiation of Prosecution by the Central Excise Authorities:

The appellants, in their Misc. Application dated 11-1-1993, stated that the Collector, Central Excise, Chandigarh, had sanctioned prosecution of the Chairman/Directors/Officers of the appellant company based on the impugned Order-in-Original. They argued that if the prosecution was based on the adjudication order under appeal, it would prejudice the pending appeal.

4. Tribunal's Inherent Powers under Section 35C of the Central Excises and Salt Act, 1944 and Rule 41 of the CEGAT Rules:

The Tribunal considered the submissions regarding its inherent powers. Under Section 35B of the Act, any person aggrieved by a decision or Order passed by the Collector, Central Excise, as an Adjudicating Authority may appeal to the Tribunal. Section 35C allows the Tribunal to pass orders confirming, modifying, or annulling the decision or Order appealed against. However, the Tribunal concluded that it had no powers to intervene in matters relating to sanctioning or launching prosecution, as these are administrative acts and not judicial orders.

5. Adjudication Proceedings versus Prosecution in Criminal Courts:

The Tribunal emphasized that adjudication proceedings before departmental authorities are independent of prosecution in criminal courts. It cited various judgments, including those of the Supreme Court and High Courts, to support the view that criminal proceedings and adjudication proceedings are distinct and can proceed independently. The Tribunal noted that there was no statutory provision regarding the sanctioning or approving the launching of prosecution in Central Excise cases, unlike in customs cases.

Conclusion:

The Tribunal rejected the Misc. Application No. E/Misc. 31/93-A, dated 11-1-1993, stating that it had no jurisdiction to intervene in the prosecution matters, which are administrative acts. The Tribunal's powers under Rule 41 of the CEGAT rules are limited to orders passed by the Tribunal and do not extend to preventing prosecution based on adjudication orders under appeal.

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