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TMI Blog2010 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... int, from which prima-facie opinion can be formulated that conviction of the petitioners can be secured. – criminal prosecution to continue. - 56542-M of 2004 - - - Dated:- 28-5-2010 - CORAM: HON'BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: Mr. O.P. Goyal, Senior Advocate with Ms. Kanwaljeet Kaur, Advocate for the petitioners. Mr. H.P.S. Ghumman, Advocate for the respondent. KANWALJIT SINGH AHLUWALIA, J. Shorn off all minute details, suffice it to say M/s Ludhiana Steel Limited - petitioner No.1 and its Directors - petitioners No.2 to 4, were sought to be prosecuted by Assistant Collector, Central Excise Division, Ludhiana on the allegation that during the period October, 1989 to 20.7.1991, M/s Ludhiana Steel Ltd., Ludhiana had willfully suppressed production of 683.045 M.T. steel ingots with an intent to evade payment of central excise duty thereon. It removed a quantity of 666.400 M.T. clandestinely in violation of rule 9(1), 52A, 173F, 173G and 226 of the Central Excise Rules, 1944 evading central excise duty amounting to Rs.4,05,264.30 (Rs.3,85,966/- BED and Rs.19,298.30 as SED). Thus, for intentional evasion of excise duty to the tune of Rs.4,05,264 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the matter has become final and it has been conclusively held against the accused that they have not committed any offence and as such the present proceedings cannot be maintained against the accused and are liable to be dropped immediately." Another plea raised, during the course of arguments, before the Chief Judicial Magistrate, Ludhiana was that the Government had issued a notification on 31st December, 1997, whereby it decided to enhance the monetary limit for launching prosecution from Rs.1.00 lac to Rs.5.00 lacs. Therefore, the prosecution of the petitioners is bad and contrary to the notification. Both these arguments were negated by the Chief Judicial Magistrate, Ludhiana in the impugned order (Annexure P-10) dated 25th September, 2004 by observing as under: "4. … … … But this is a criminal complaint filed by the Asstt. Collector of Cen. Excise Division, Ludhiana. Therefore, this Court is to decide independently on the evidence to be adduced by both the parties. So, decision of the tribunal is not binding on this Court. So far as notification dt. 31.12.97 is concerned whereby it is alleged that the Board has decided to further enhance the monetary limit for launchin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellate Authority had quashed the order of the Collector Annexure P.2, the net result of the order was that the plea of the department that the petitioners had indulged in clandestine removal of the sodium silicate was not accepted and thus, no default had been committed by the petitioner in payment of the excise duty. In this situation, the matter having been finally settled by the Appellate Authority, no prosecution on the same facts was legally competent, and the complaint cannot terminate in an order of conviction, the continuation of such a complaint is thus abuse of process of Court." To similar effect, the judgment cited before this Court is 'M/s Ajay Tent House and others v. Income Tax Officer, Gurgaon' 2003(2) RCR (Criminal) 49, the relevant portion of which reads as under: "11. It is not in dispute that the order imposing the penalty has been set aside by the Income Tax Appellate Tribunal vide order dated April 4, 1991 Annexure P-2. The relevant findings given by the Tribunal have been reproduced by me above. It is apparent that the Tribunal has not quashed the order of penalty merely on some technicality but on firm finding of fact recording that there was no con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we see no reason to restrict the scope of any of the provisions of the Act, especially in the context of the presence of the "without prejudice" clause in Section 56 of the Act dealing with offences and prosecutions. We find substance in the contention of the learned Additional Solicitor General that the Act subserves a twin purpose. One, to ensure that no economic loss is caused by the alleged contravention by the imposition of an appropriate penalty after an adjudication under Section 51 of the Act and two, to ensure that the tendency to violate is curbed by imposing an appropriate punishment after a due prosecution in terms of Section 56 of the Act. The contention that as a matter of construction - since the provisions could not be attacked as violative of the rights under Part III of the Constitution - we should interpret the provisions of the Act and hold that an adjudication has to precede a prosecution cannot be accepted as we see nothing in the provisions of the Act justifying such a construction. On the scheme of the Act, the two proceedings are seen to be independent and the launching of the one or the other or both is seen to be controlled by the respective provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old has been placed on record. We do not see any evidence has been produced by the department to show that excess raw material was procured for the manufacture of 653.945 MT of ingots and the same was clandestinely removed. Admittedly the appellants had 8 trucks with them but these trucks were used by the appellants for carrying steel ingots and disputed slag. A lot of controversy arose about the disposal of slag. Slag was generated in the manufacture of steel ingots. What percentage of slag in the manufacture of steel ingots is generated depends on a number of factors namely quality, standard and type of raw material used is the determinative of generation of slag. A reference to the balance sheet of the appellants company was made. In the balance sheet an amount of expenditure was shown as outward freight. The adjudicating authority had held that it cannot be the amount spent on disposal of slag and also that the trade practice was that slag was not weighed. However, the appellants submitted that they were selling slag at very nominal cost to their employees; that employees were using their trucks while trucks were being taken out they were being weighed. Thus, there is probabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neously. For initiating criminal proceedings one does not have to wait for the outcome of the adjudication proceedings as the two proceedings are independent in nature. 2. The findings in the departmental proceedings would not amount to res judicata and initiation of criminal proceedings in these circumstances can be treated as double jeopardy as they are not in the nature of 'prosecution'. 3. In case adjudication proceedings are decided against a person who is facing prosecution as well and the Tribunal has also upheld the findings of the adjudicators/assessing authority, that would have no bearing on the criminal proceedings and the criminal proceedings are to be determined on its own merits in accordance with law, uninhibited by the findings of the Tribunal. It is because of the reason that in so far as criminal action is concerned, it has to be proved as per the strict standards fixed for criminal cases before the criminal Court by producing necessary evidence. 4. In case of converse situation namely where the accused persons are exonerated by the competent authorities/ Tribunal in adjudication proceedings, one will have to see the reasons for such exoneration to determin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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