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TMI Blog2018 (9) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... in criminal proceedings, which requires standard of proof beyond all reasonable doubts, has to be considered as yardstick to come to the conclusion proceedings before the Tribunal - In the case in hand, since, prosecution launched against the assessee and the Shri M.M. Reddy was quashed and they were acquitted, the reliance placed by the Revenue in the same set of evidence cannot hold ground to confirm the demands raised along with interest and imposed penalties on appellants. Appeal allowed - decided in favor of appellant. - E/56/2011 And E/57/2011 - A/31149-31150/2018 - Dated:- 11-9-2018 - Mr. M.V. Ravindran, Member (Judicial) For the Appellant : Shri V.J. Sankaram, Advocate For the Respondent : Ms B. V. Siva Naga Kumari, Commissioner (AR) ORDER PER: M.V. RAVINDRAN These two appeals are directed against Orders-in-Appeal No. 76 77/2010 (T) CE dated 30.09.2010. As both these appeals are inter connected, they are being disposed of by a common order. Appeal No. E/56/2011, Banjara Cements Ltd., as filed an appeal against the confirmation of the demands raised with interest and also imposing penalty, Appeal No. E/57/2011, Shri M.M. Reddy the indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ala Polythene Bags (P) Ltd., during 98-99, was not accounted for in the statutory records. The same were used for removal of cement without payment of excise duty. Therefore show cause notice was issued to the appellants as to why i) Central Excise duty totalling to ₹ 17,24,138/- (Rs. 970538 and ₹ 7,53,600/- for 97-98 and 98-99, respectively) should not be demanded from them under rule 9(2) of Central Excise Rules, 1944, read with Section 11A of Central Excise Act, 1944, ii) Amount of ₹ 21,437/- being duty on the goods removed without payment of duty, should not be demanded, iii) Penalty equal to the duty amount should not be imposed under Section 11AC of the Act, iv) Interest at the rate of 20% should not be demanded under Section 11AB of the Act, v) Penalty under rule 173 Q of CE Rules, should not be imposed, vi) Penalty on Sri MM. Reddy, M.D. of the company, should not be imposed under rule 209 A of C.E. Rules, 1944, vii) 20,450 nos. of unaccounted bags found in the factory should not be confiscated under rule 173Q of CE Rules, 1944. 2.2 After going through the reply of the appellants, the Additional Commissioner, Hyderabad II Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and the said prosecution was launched by the officer of the Commissioner of Customs, Central Excise Service Tax, Tirupati Commissionerate. He would draw the attention of the Bench to the judgment of the Special Judge for Economic Offences on 12th January, 2010 and submits that the evidences relied upon by the prosecution for launching a prosecution against the same appellants for same evidence which before the Lower Authorities and before the First Appellate Authority in the impugned order; that the Hon ble Special Judge for Economic Offences, Hyderabad has come to a categorical findings that there is no evidence to convict the accused no material is found on record incriminating the accused in the offences for prosecution under Section 9 of Central Excise Act, 1944. He would read extensively from the said judgment of the Special Judge for Economic Offences, Hyderabad. It is his further submission that this judgment was placed before the First Appellate Authority but was brushed aside them any findings. He submits that the judgment of Hon ble High Court of Madras in the case of Commissioner of Customs (Import), Chennai Vs. A. Mohammed [2009 (234) ELT 632 (Mad.)] would ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ometimes on cash and sometimes after the bills, to conclude that there was manufacturing clandestine removal from the finished goods i.e. cement. I notice that the very same evidences were lead by the Revenue in the prosecution launched against the assessee and the appellant Shri M.M. Reddy, Managing Director in the court of Special Judge for Economic Offences. I find that in the said judgment of Hon ble Special Judge appreciated the entire evidences on which reliance was placed for launching prosecution, consequent to the Order-in-Original being passed confirming the demands and the interest and the penalties imposed. The relevant paragraphs of the judgment of the Special Judge for Economic Offences and from material in proof to decide the issue in favour of the prosecution, which I reproduce: The show cause notice was adjudicated by the adjudicating authority, confirming the duties and the penalty levied on the accused. Thus A.1 company and A.2. entered into a criminal conspiracy to commit the offence punishable under Sections 9(1), 52A, 53, 54,174G and 226 of Central Excise Rules and liable for punishment under Sections 9(1) (b), 9(1)(bb) of Central Excise Act, 1944. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sekhar was not examined. The above failure leaves the prosecution short of prosecuting their case. The cross examination of P.W.2 shows that they did not consider shortage of cement as an incriminating factor. He could not state the quantity of cement in the silo and packed condition as on 23.12.1997. The RG register taken by him is not filed in the court unless which, admittedly the order of the stock cannot be known. He admitted that they did not find any discrepancy in the cement on 03.11.1998 and that the same tallied with the statutory records. He also admitted that the HDPE bags tallied with the book balance, with slight difference. The above evidence would suffice to manifest the perfunctoriness of the investigation. His admission that RG register is essential to understand the details of the unaccounted for bags and the failure to file the said register would leave the accused in a beneficial position. The accused, during his 313 examination, explained the reasons for the shortage of cement if any. The same were admitted by P.W.4 also. Gypsum is admitted to be a hydroscopic product which has to be dried before it goes for manufacturing process. It is the main ing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are acquitted under Section 24891) Cr.P.C. for the offence punishable under Sections 9(1)(b) and 9(1)(bb) and 9(1)(b) R/W Section 9-AA and 9(1)(bb) R/W Section 9 -AA of Central Excise Act, 1944. The bail bonds of the accused shall stands cancelled. It can be seen from the above reproduced relevant findings of the judgment of the Learned Special Judge for Economic Offences, it is seen that after appreciating entire evidence which is the fulcrum of allegations and the adjudication proceedings against the assessee and Shri M.M. Reddy, the Special Judge acquitted the assessee and Shri M.M. Reddy the offences which are alleged under the provisions of the Section 9 and Section 9 -AA of Central Excise Act, 1944. Against the said judgment, Revenue preferred an appeal before the Hon ble High Court seeking condonation of delay; Hon ble High Court dismissed the application for condonation of delay consequently, the appeal also. 8. The Hon ble Supreme Court in the case of Radheshyam Kejriwal Vs. State of West Bengal [2011 (266) ELT 294 (S.C.)] has laid down that It is trite that standard of proof required in criminal proceedings is higher than that required before Adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and the concerned person(s) is/are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious criminal complaint is filed by the departmental authorities alleging violation/contravention of the provisions of the Act on the part of the accused persons. However, if the departmental authorities themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the departmental proceedings that ex facie there is no such violation. The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined two containers UACU-295224 and TEXU- 289984-6 at Chennai Port. On examination, the containers were found to contain 7,006 Kgs. of sandalwood logs/billets, 529 Kgs. of sandalwood small rough pieces and 4,20,000 pieces of peacock feathers in respect of the first container, and 6,169 Kgs. of sandalwood logs/billets, 1,467 Kgs. of sandalwood small rough pieces and 238 Kgs. of Mica powder, in respect of the second container bearing No. TEXU-289984-6. The total value of the sandalwood, peacock feathers and mica powder in both the containers were estimated to be ₹ 64,27,750/-, ₹ 16,80,000/- and ₹ 3,570/- respectively. The goods were seized under Mahazar on 30-5-1993. 3. On completion of the investigation, a show-cause notice was issued to the first respondent herein along with some other persons who were found to have been involved in smuggling the above-said goods. On adjudication by the Commissioner of Customs (Sea), an order of absolute confiscation of 15.171 Metric Tonnes of sandalwood, 4,20,000 pieces of peacock feathers and 238 Kgs. of mica powder totally valued at ₹ 81,11,320/- was passed and the same were recovered. Further, a penalty of ₹ 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore this Court in which the first respondent was discharged. The basic material which formed the basis for levelling the charges against the first respondent herein, before this Court in the criminal proceedings and before the Tribunal are verbatim same, neither there is a deletion nor addition in it. In those factual circumstances of the case, the Tribunal allowed the appeal by stating that on the very same charges levelled against the first respondent, this Court, in the Criminal Revision, discharged him from all the charges and hence, the first respondent cannot be thrusted with penalty in a sum of ₹ 5,00,000/-, as there was no material to connect him with the alleged charges. 8. Learned counsel for the appellant sought to argue that the departmental proceedings cannot be compared with a criminal proceeding and for proving departmental charges, the preponderance of probability is enough, whereas in criminal proceedings, the charges have to be established beyond all reasonable doubt. We are not able to countenance the argument of the learned counsel for the appellant, as the charges are one and the same, and as against the action sought to be taken under the Customs Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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