Excise classification dispute finally resolved in favour of the accused, barring criminal prosecution on the same facts.

Where the excise classification dispute was finally resolved in favour of the accused, the criminal complaint could not survive. The products were held to be ayurvedic medicines falling under Chapter 30 of the Central Excise Tariff Act, not cosmetics or toilet preparations under Chapter 33, and that finding was affirmed when the Supreme Court dismissed the Revenue's appeal. With the departmental adjudication set aside and the foundational allegation of misclassification removed, the prosecution resting on the same facts and evidence had no sustainable basis. The respondents' discharge was therefore upheld.

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Issues: Whether the discharge of the respondents in the criminal complaint under the Central Excise Act, 1944 could be sustained after the products were held to fall under Chapter 30 of the Central Excise Tariff Act, 1985 and the departmental adjudication against the respondents had been set aside.

Analysis: The complaint proceeded on the allegation that the respondents had misclassified ayurvedic medicines as cosmetics and toilet preparations to evade excise duty. The Tribunal had already held that the products were ayurvedic medicines covered under Chapter 30 and not cosmetics under Chapter 33, and that finding was later affirmed when the Supreme Court dismissed the Revenue's appeal. Once the excise classification dispute was atively resolved in favour of the respondents, the very foundation of the criminal complaint disappeared. In that situation, prosecution on the same facts and evidence could not be sustained.

Conclusion: The discharge of the respondents was upheld.

Final Conclusion: The complaint lost its basis after the products were conclusively held to be ayurvedic medicines, so the criminal prosecution could not proceed on the same factual foundation.

Ratio Decidendi: Where the foundational classification dispute is finally decided in favour of the accused in the departmental proceedings, a criminal prosecution resting entirely on the same allegations cannot be sustained.

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