Pending penalty proceedings do not bar Central Excise prosecution; criminal complaint may continue despite stay of recovery.

Contravention of excise rules and notifications may attract both penalty proceedings and criminal prosecution under the Central Excise regime. Pending appeal against the penalty, or a stay of recovery or confiscation, does not by itself bar the department from launching or continuing prosecution, because the criminal complaint proceeds on the statutory offence alleged rather than on the immediate status of civil recovery. If the appellate tribunal later finds in favour of the affected party, appropriate relief may then be sought before the criminal court, including discharge or other suitable orders.

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Issues: Whether the criminal complaint and summoning order under the Central Excise law could be quashed or the prosecution stayed merely because penalty proceedings arising out of the same alleged contravention were pending before the appellate tribunal and recovery had been stayed.

Analysis: The petition challenged the complaint and summoning order on the footing that the dispute regarding liability to penalty was sub judice before the appellate tribunal. The Court held that contravention of excise rules and notifications can expose a party not only to penalty but also to prosecution under the statute. The pendency of the penalty proceedings, or a stay of recovery/confiscation, does not extinguish the department's right to launch prosecution. If the tribunal ultimately records a finding in favour of the petitioners, they may seek appropriate relief in the criminal court, including discharge or other suitable orders.

Conclusion: The prayer for quashing the complaint and for staying the criminal proceedings was rejected; the prosecution was held maintainable notwithstanding the pending penalty proceedings.

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