Hitech Carbon Products & Anr vs Inspector, Anti-Evasion Central ...
1999 Latest Caselaw 941 Del

ORDER

M.S.A. Siddiqui, J.

1. By this petition under Section 482. Cr.P.C. petitioners seek quashing of the order dated 1st July, 1998 passed by the Additional Chief Judicial Magistrate, New Delhi rejecting the petition under Section 245(2) Cr.P.C. filed by the petitioners.

2. Briefly stated, facts giving rise to the present petition are that M/s Hi-tech Carbon Products (Petitioner No.1) holder of Central Excise Licence No.2/4809/R-9/MOD-11/90 dated 14.11.90 are engaged in the manufacture of carbon paper rolls falling under sub-heading no. 4809.10 of the schedule to the Central Excise Tariff Rules, 1985. On 25.2.1991, the officers of the Central Excise (Preventive) Department inspected the factory premises of the petitioners and found that the provisional SSI Registration Certificate No. 55/55/60-4/STH, dated 8.11.1989 granted to the petitioners had expired on 7.11.1990 but the petitioners had started production/clearance of goods with effect from 9.2.1990 and the total value of the goods manufactured and cleared by them during the financial year 1989-90 and year 1990-91 was Rs.3,76,761/- and Rs.19,99,477.10 respectively. According to the respondent, since the petitioner No. 1 was neither in possession of a permanent SSI Registration certificate nor their provisional SSI registration Certificate was extended beyond 7.11.1990, they were not eligible for the benefit of SSI as per Clause (4) of the notification No. 175/86, dated 1.3.1986 as amended. Thus, the petitioners were not eligible for the said benefit under Clause 4(a) or 4(b) of the said notification as the total value of their goods exceeded Rs.7.5 lacs. during the financial year 1990-91 and further they had wrongfully availed of the benefits during the said financial year and thereby contravened the provisions of rule 9(1), 173 F, 173 G, 174 read with rules 92, 226 and 173 Q of the Central Excise Rules and Section 9-A of the Central Excise and Salt Act. It is alleged that the petitioners had evaded Central Excise Duty to the tune of Rs.10,08,020.05 during the financial years 1989-90 and 1990-91. In the adjudication proceedings, the collector, Central Excise Delhi imposed a penalty of Rs.25000/- upon the petitioner No.1 and demanded a sum of Rs.10,08,020.05 as Central Excise Duty. On these allegations, the respondent filed a complaint under Section 9 of the Central Excise and Salt Act against the petitioners. Aggrieved by the order dated 21.5.1992 of the Collector, Central Excise, the petitioners filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal (for short the Appellate Tribunal). By the order dated 26.9.1995, the Appellate Tribunal allowed the petitioners' appeal and set aside the order dated 21.5.1992 passed by the Collector, Central Excise imposing penalty on the petitioners.

3. After the Appellate Tribunal passed the order allowing the appeal, the petitioners filed a petition before the A.C.M.M. to drop criminal proceedings. The A.C.M.M. by the order dated 1.7.1998 dismissed the said application holding that the prosecution has got a right to lead evidence in support of the complaint and the Court can come to the conclusion whether or not any offence is made out. Aggrieved by the same, the petitioner have come up before this Court under Section 482 Cr.P.C.

4. Learned counsel for the petitioners has strenuously urged that the prosecution of the petitioners on the same set of facts and evidence on the basis of which the departmental adjudication proceedings were initiated and finalised resulting in exoneration of the petitioners, is an abuse of the process of law. Reliance is placed on the decision of the Apex Court in G.L.Diwania Vs. Income Tax Officer 1999 (108) E.L.T. 16 (S.C.) in support of the said contention. Undisputedly, the adjudication proceedings initiated by the Collector, Central Excise against the petitioners have been set aside by the Appellate Tribunal. The question is :- whether the petitioners' prosecution can be sustained in view of the order passed by the Appellate Tribunal. It is relevant to mention that while setting aside the order dated 21.5.1992 passed by the Collector, Central Excise, the Appellate Tribunal has observed as under:-

"................This is a very clear case of total harassment and initiating proceedings after proceedings on the same issue for the same period on three occasions without any rhyme and reason. We have to record our displeasure in the manner in which the department has dealt with the matter. This is a matter, which we feel should be brought to the notice of the higher authority of the department namely, the chairman of the Board of Central Excise, so as to enable the Chairman to take some remedial action to avoid such type of harassment to the assessee in a circumstance like this, wherein the department initiates a third proceedings when in fact, two earlier proceedings had been dropped. The Collector has failed to look into this aspect despite this fact being brought to his notice both in the reply to the show cause notice as well as during the personal hearing, instead he has gone on to confirm the demands, which are totally unsustain-

able. As the matter has already been adjudicated earlier and the department has dropped the proceedings twice, the question of sustaining this order does not arise. Therefore, the impugned order does not survive and it is set aside."

5. Thus, the whole question is whether the petitioners had evaded Central Excise Duty to the tune of Rs.10,08,020.50 on the clearance of the goods manufactured by them during the financial years 1989-90 and 1990-91. The Appellate Tribunal has held that the petitioners were eligible for the benefits of SSI as per notification No. 175/86 dated 1.3.1986 as amended, during the period in dispute and thus they had not evaded the excise duty as alleged by the respondent. So far this issue is concerned, the finding of the Appellate Tribunal is conclusive. Thus, in view of the fact that in the order of the Appellate Tribunal, the conclusion reached by the Collector, Central Excise have been set aside, the very basis of the complaint is knocked out and the petitioners' prosecution on the same set of fact and evidence cannot be sustained. That being so, there is no prospect of the case ending in connection and the valuable time of the Trial Court would be wasted for holding the trial only for the purpose of formally completing the procedure to pronounce its conclusion on a future date. In this view of the matter, allowing the criminal proceedings to continue and thereby forcing the petitioners to face the ordeal of a trial would be an abuse of the process of law.

6. For the foregoing reasons, the petitioner is allowed and the proceedings emanating from the complaint filed by the respondent and pending on the file of the Addl. Chief Metropolitan Magistrate, New Delhi are quashed.