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TMI Blog2018 (1) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... peal came to be preferred by the Company before the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as CESTAT). By an order dated 08.12.2011, CESTAT had directed the petitioner to pay a sum of Rs. 4.5 Crores towards the duty and had stayed the appeal. The order of CESTAT was unsuccessfully appealed up to the Hon'ble Supreme Court of India. It is in this background that the impugned complaint came to be filed against the order-in-original dated 06.05.2009 inspite of the interim order of stay for alleged offences under Section 9 and 9(AA) of the said Act r/w. Section 120(B) IPC. 3.Heard Mr.A.L.Somayaji, learned Senior counsel for the petitioner and Mr.V.Sundareswaran, learned Senior Standing Counsel for the respondent. 4.Mr.A.L.Somayaji, learned Senior counsel appearing for the petitioner submitted that the impugned complaint itself is not maintainable since the order-in-original dated 06.05.2009 has been stayed by the CESTAT. According to the learned Senior counsel, the petitioner herein was not the Managing Director of M/s.Visaka Industries Limited during the years 2003-04 and 2004-05 and was not in-charge of the affairs of the Company and its day- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2004-05. This position is ratified from Form 32 of the Companies Act which evidences that the petitioner became the Managing Director of the Company with effect from 26.10.2009. In the impugned complaint, the petitioner, who has been alleged as a second accused, has been described as a Managing Director of the said company. The cause of action in the impugned complaint pertains to evasion of payment of Central Excise duty towards the period 2003-04 and 2004-05. There is a specific statement made in the complaint that as M/s.Visaka Industries Limited, as a private limited company, the person in-charge of or is responsible for the affairs of the company is the Managing Director is deemed to be guilty. In the present case in hand, Mrs.Saroja Vivekananda, Managing Director of M/s.Visaka Industries Limited, Paramathy is likely to be prosecuted under Section 9 of the Central Excise Act . In the concluding portion of the complaint, it is further stated that wherein since investigations and statements recorded amply point to the fraudulent activity carried out by Mrs.Saroja Vivekanand, Managing Director of M/s.Visaka Industries Limited and Mr.N.Santhosh Kumar, Proprietor of M/s.Natesan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly." Guidelines: "Person liable to be prosecuted: 3.1 Whoever commits any of the offences specified under sub-section (1) of Section 9 of the Central Excise Act, 1944 or sub-section (1) of Section 89 of the Finance Act, 1994, can be prosecuted. Section 9AA (1) of Central Excise Act, 1944 provides that where an offence under this Act has been committed by a company, every person who, at the time offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Section 9AA(2) of Central Excise Act, 1944 provides that where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of evidences or should be adequate to establish the offence beyond reasonable doubt that the person had an intention to commit the offence. 11.As stated above, the complaint proceeds on the footing that the person who was in-charge of the company's day-to-day affairs and its management is the Managing Director alone and therefore, the petitioner herein has been arrayed as an accused. From an overall reading of the complaint, it can be inferred that, had the respondent arrayed the then real Managing Director as an accused in the complaint, the petitioner herein, though was the director of the company, may not have been shown as an accused. As a matter of fact, the other directors of the company during the relevant period have not been arrayed as accused in the impugned complaint. It could therefore only be concluded that the intention of the respondent was to prosecute the then Managing Director of the company, who held the post during the years 2003-04 and 2004-05. 12.The issue as to whether all the directors of the company can be implicated as accused for offence committed by a company has been dealt in various judgments of the Hon'ble Supreme Court of India as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 1985, a few days before the raid was effected and had not participated in any of the earlier proceedings leading to the conspiracy of evasion of excise duty during the period 1981 to 1984. it would be an exercise in futility to allow the prosecution to continue against petitioner accused No.17. It would also amount to an abuse process of Court and gross injustice to the petitioner. It would also not be worthwhile to call upon the petitioner to approach the trial Court for taking steps for his discharge in the face of this admitted position. In order to meet the ends of justice, therefore, I allow this petition and quash the process issued against the petitioner, original accused No.17." 14.The learned Senior Standing counsel for the respondent by relying on the following three judgments submitted that the inherent powers of the High Court under Section 482 should be exercised sparingly for quashing of the complaint. In R.P.Kapur Vs. State of Punjab [1960 AIR 862], the Hon'ble Apex Court had summarized the categories of cases where inherent powers can be exercised to quash the proceedings. One among them was that when the allegations constitute an offence but there is no le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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