Excise duty evasion complaint fails where final assessment drops the demand on incorrect valuation and non-chargeability.

An excise complaint alleging duty evasion could not survive once the competent authority finally held that the disputed amounts were not chargeable in the assessable value and dropped the demand. The record showed that the assessee had initially paid the demand and pursued the statutory challenge, but the final liability determination found the demand unsustainable on incorrect valuation and non-chargeability of duty. In that situation, the factual basis for alleging deliberate withholding of duty or criminal intent to evade duty disappeared, making refusal to discharge unsustainable and entitling the petitioner to discharge.

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Issues: Whether the refusal to discharge the petitioner in the excise complaint was justified after the excise demand had been finally dropped on the ground of incorrect valuation and non-chargeability of the duty.

Analysis: The complaint was founded on an alleged evasion of excise duty arising from inclusion of amounts in the assessable value. The record showed that the assessee had paid the initial demand, pursued the statutory challenge, and the competent authority ultimately held that the additional amounts were to be included in wholesale price and not in assessable value, with the demand found unsustainable and dropped. Once the authority competent to determine liability concluded that the demand itself was not chargeable, the basis for attributing deliberate withholding of duty or criminal intent to evade duty could not survive.

Conclusion: The refusal to discharge was unsustainable, and the petitioner was entitled to discharge.

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