2016 (7) TMI 124 - HC - Central Excise

Prosecution proceedings u/s 9/9AA of the Central Excise Act 1944 - it was argued that the criminal prosecution in the present matter could also not go on for the reason that the departmental proceeding started against the revisionists to realize the fine/tax has been quashed. - Held that - it is evident that the revisionists have not been exonerated from the penalty/tax liability etc. but the case was remitted back for fresh decision for fixing liability of each and every individual separately after giving opportunity of hearing to the revisionists. The revisionists establishment/company have been registered as required under the Central Excise Act and they come under the purview of the said Act. In the present matter the adjudication proceeding has not been finally determined in favour of the revisionists criminal prosecution can go-on simultaneously with the adjudication proceeding. Thus from the evidence available on record no illegality infirmity or impropriety is found in the impugned order and it cannot be said that no prima facie case is made out against the revisionists. The findings recorded by the concerned Magistrate in the impugned order does not require interference by this Court. There is no violation of any law or rule. The revision lacks merits and is liable to be dismissed. - Decided against the petitioner.

Summary

Issues involved:
1. Quashing of order passed by Special Chief Judicial Magistrate under Central Excise Act
2. Validity of criminal prosecution and adjudication proceedings
3. Exoneration in adjudication proceedings affecting criminal prosecution
4. Prima facie case for summoning accused in criminal proceedings

Analysis:

1. The revisionists sought to quash the order passed by the Special Chief Judicial Magistrate under the Central Excise Act. They argued that the complaint could not proceed against them due to various legal grounds, including the seizure made in 2007 and subsequent legal actions. The revisionists contended that the criminal prosecution lacked merit and should be discontinued based on previous court orders and legal principles established in relevant case laws.

2. The opposing party, represented by the learned A.G.A. and senior standing counsel, argued that criminal and adjudication proceedings can run concurrently. They emphasized that the adjudication process had not concluded in favor of the revisionists, and the order for de-novo proceedings indicated a separate liability determination. The Court noted that the summoning order required only a prima facie case and found no basis to terminate the proceedings.

3. The Court referenced the Radheyshyam Kejriwal case to address the issue of exoneration in adjudication proceedings impacting criminal prosecution. It was highlighted that exoneration on merits in adjudication proceedings could influence the criminal case, especially if findings indicated innocence. The Court clarified that both proceedings can proceed independently, and prosecution can be initiated before adjudication concludes.

4. In evaluating the prima facie case for summoning the accused, the Court emphasized the need for sufficient evidence to proceed with the complaint. The Court upheld the decision of the Magistrate to reject the discharge application, as the revisionists had not been exonerated from tax liabilities. The Court found no legal infirmity in the order and concluded that the revision lacked merit, leading to the dismissal of the Criminal Revision.

Overall, the judgment delved into the complexities of criminal prosecution and adjudication proceedings, highlighting the interplay between exoneration in adjudication and its impact on criminal cases. The Court's analysis underscored the need for sufficient evidence to support a prima facie case in criminal proceedings, ultimately leading to the dismissal of the revision.