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2015 (5) TMI 912 - HC - Central ExciseRequest for quashing of criminal complaint - Carrying on the business without obtaining central excise registration - manufacturing of liner fabric/nylon duck of polyprolene/nylone/polyster fabrics - Held that - unless there is an actual evasion of excise duty, there is no offence attracting the aforesaid provisions made out against any person and as such, obviously not by the petitioners also as per the law laid down, in the Simplex-II case 2005 (3) TMI 117 - SUPREME COURT OF INDIA - Of course, if registration is compulsory under any Rule, not brought to the notice of this Court even where the goods manufactured/produced/dealt in by a person are not subject to excise duty, then, at best, non-registration can be termed an irregularity, which fact has also not been pointed out by the learned counsel for the respondent, who was assisted by the 2nd respondent herself, as she had been summoned to Court, vide order dated 02.05.2014. - Obviously, if at all there is such an irregularity, and there is any fine imponable for the same, the respondents would be at liberty to impose the same, after following due procedure. Revenue could not refute that with the basis for the criminal complaint having been actually removed, with the Apex Court having held that the goods manufactured by the firm of the petitioners are not exigible to Central Excise, the criminal complaint would no longer be maintainable. - complaint filed by the respondent before the learned Chief Judicial Magistrate, Amritsar, is quashed, along with all proceedings arising therefrom, including the orders of the learned trial Court, impugned in the present petition - Decided in favour of appellant.
Issues Involved:
1. Quashing of the criminal complaint and orders. 2. Classification and excise duty applicability on the manufactured goods. 3. Independence of criminal proceedings and penalty proceedings. 4. The impact of Supreme Court judgments on the case. Detailed Analysis: 1. Quashing of the Criminal Complaint and Orders: The petitioners sought the quashing of complaint No.151 dated 20.04.2000, and the orders dated 17.08.2006 and 27.10.2009, passed by the Chief Judicial Magistrate, Amritsar. They invoked the jurisdiction under Section 482 Cr. P.C. to achieve this. The complaint was filed under Section 99-AA of the Central Excise (& Salt) Act, 1944, and various rules of the Central Excise Rules, 1944. 2. Classification and Excise Duty Applicability on the Manufactured Goods: The petitioners, partners in M/s H. L. Textile Mills, were accused of manufacturing liner fabric/nylon duck without proper registration and without paying the required Central Excise Duty. The complaint alleged that their products fell under Sub-Heading 5911.90 of the Schedule to the Central Excise Rules, 1985, attracting a duty of 15% ad valorem. However, the petitioners contended that their product was meant for non-apparel industrial/technical use and did not fall under the specified sub-heading, thus not attracting the excise duty. 3. Independence of Criminal Proceedings and Penalty Proceedings: The petitioners were also issued a show cause notice for penalty, which was set aside by the Customs Excise and Gold (Control) Appellate Tribunal (CEGAT). The Tribunal's decision, which was upheld by the Supreme Court, concluded that the product did not qualify for the excise duty as it was not used for industrial purposes but merely for protecting layers of rubber. Despite this, the respondent argued that under Section 34-A of the Central Excise Act, 1944, criminal prosecution and departmental action are independent and can proceed simultaneously. They cited the Supreme Court judgment in Assistant Collector of Customs, Bombay vs. L. R. Melwani to support this stance. 4. The Impact of Supreme Court Judgments on the Case: The Supreme Court, in Commissioner of Central Excise, Nagpur vs. Simplex Mills Co. Ltd. (2005), ruled against the Revenue, leading to the dismissal of their appeal against the petitioners. This judgment, along with the Tribunal's decision, negated the Revenue's contention that the goods fell under Sub-Heading 5911.90. Consequently, the High Court found no basis for the criminal proceedings since the Supreme Court had already established that the goods were not subject to excise duty. Conclusion: The High Court concluded that the criminal complaint and subsequent orders should be quashed. The court reasoned that continuing the criminal proceedings would be a misuse of the process of law since the Supreme Court had already ruled that the goods were not subject to excise duty. The court emphasized that without an actual evasion of excise duty, no offence under the Central Excise Act was made out against the petitioners. Thus, the petition was allowed, and the complaint and all proceedings arising from it were quashed.
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