2022 (2) TMI 557 - HC - Central Excise

Clandestine removal - vanaspati - Seeking for keeping in abeyance the further proceeding pending in the court of the learned Addl. Chief Judicial Magistrate (Special Court), Cuttack till disposal of the Adjudication Proceedings under the Central Excise Act, 1944, in an another case - Whether the allegation in the adjudication proceeding and the proceeding for prosecution is identical? - HELD THAT - There appears to be no dispute before this Court that the facts giving rise to the allegations are identical in both the proceedings and the documents / materials relied on by the Department / Complainant are also the same. The learned counsel for the opposite party has placed reliance on a decision of the Apex Court in the case of ADALAT PRASAD VERSUS ROOPLAL JINDAL OTHERS 2004 (8) TMI 647 - SUPREME COURT reported in (2004) 29 OCR (SC) 264 which does not apply to the fact situation of the present case. Similarly, the case of STATE OF KARNATAKA VERSUS SIR JANAKUSA JEEVANSA BAKALE 1999 (4) TMI 85 - SC ORDER cited by the opposite party which affirms the legality of institution of a criminal proceeding during pendency of confiscation proceeding, is not applicable to the case at hand, inasmuch as here the challenge is not to the launching of the criminal prosecution. Regard being had to the position of law and in the facts and circumstances involved in the case at hand, this Court finds merit in the CRLMC. Decisions in the case of VIDEOCON INDUSTRIES LTD. 2016 (6) TMI 341 - SUPREME COURT and RADHESHYAM KEJRIWAL 2011 (2) TMI 154 - SUPREME COURT followed. The CRLMC stands allowed directing the further proceeding of the Complaint Case No.2(C) C.C. 57 of 2003 to be kept in abeyance pending disposal of the Department adjudication proceedings started under the Central Excise Act, 1944 and the Rules thereunder - Application allowed.

Summary

Issues:
Application under Section 482 of Cr.P.C. seeking to keep criminal proceeding in abeyance pending adjudication proceedings under Central Excise Act, 1944.

Analysis:
1. The petitioners filed an application under Section 482 of Cr.P.C. seeking to halt the criminal proceeding pending in the court of the learned Addl. Chief Judicial Magistrate (Special Court), Cuttack until the adjudication proceedings under the Central Excise Act, 1944 are concluded.

2. The complaint against the petitioners alleges offenses under various sections of the Central Excise Act, 1944 related to the suppression of manufacture and removal of Vanaspati in contravention of the Act to evade payment of Central Excise duty. The complaint was based on an order by the Commissioner of Central Excise & Customs, which was challenged and remanded by the Customs, Excise and Service Tax Appellate Tribunal, Kolkata in 2007.

3. The petitioners argued that continuation of the criminal proceeding alongside the adjudication proceedings, which involve the same set of facts, would be an abuse of court process if they are exonerated in the adjudication proceedings. They highlighted the potential for unjust results if the departmental proceedings result in exoneration after the criminal prosecution has proceeded.

4. The opposite party contended that since the adjudication and criminal proceedings are independent of each other, there is no legal bar to their simultaneous continuation. Reference was made to Section 34-A of the Central Excise Act, 1944, emphasizing that other punishments can be imposed even if goods are confiscated or penalties are imposed.

5. The court referred to the case law, including Radheshyam Kejriwal v. State of West Bengal, which established principles such as the independence of adjudication and criminal proceedings, the non-binding nature of findings in adjudication on criminal prosecution, and the importance of exoneration on merits to halt criminal prosecution based on the same facts.

6. Considering the settled legal principles and the identical nature of the allegations in both proceedings, the court found merit in the petition and allowed the application under Section 482 of Cr.P.C. The court directed the criminal proceeding to be kept in abeyance pending the conclusion of the adjudication proceedings under the Central Excise Act, 1944 and its rules.

7. Additionally, due to COVID-19 restrictions, the court allowed the parties to use a printout copy of the order available on the High Court's website, subject to attestation by the concerned advocate, in line with the prescribed procedures.

This detailed analysis of the judgment outlines the legal arguments presented by both parties, the relevant case law, and the court's decision based on established legal principles and the specific circumstances of the case.