Excise duty evasion prosecution cannot continue after final finding that no duty was leviable on the goods.

A criminal complaint for alleged excise duty evasion could not survive once the underlying classification dispute had been finally decided against the Revenue and the goods were held not exigible to central excise duty. With the duty-liability foundation removed, the prosecution on the same cause of action amounted to abuse of process and was quashed. Non-registration under the excise rules also did not independently sustain criminal liability, because the complaint did not establish a separate statutory offence or a pleaded basis showing that registration was required despite non-exigibility. In the absence of an independent legal foundation, continuation of the complaint and consequential proceedings was impermissible.

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Issues: (i) Whether a criminal complaint for alleged excise duty evasion could survive after the excise classification dispute had been finally decided against the Revenue; (ii) Whether non-registration under the excise rules could independently sustain the prosecution.

Issue (i): Whether a criminal complaint for alleged excise duty evasion could survive after the excise classification dispute had been finally decided against the Revenue.

Analysis: The complaint and the prosecution were founded on the allegation that the goods manufactured by the petitioners were dutiable under the relevant tariff headings. That basis had already been negatived in the adjudicatory proceedings, and the Supreme Court had dismissed the Revenue's challenge. Once the goods were held not exigible to central excise duty, the foundation for alleging evasion of duty disappeared, and the criminal prosecution on the same cause of action could not be allowed to continue.

Conclusion: The prosecution on the alleged duty-evasion issue could not survive and was liable to be quashed.

Issue (ii): Whether non-registration under the excise rules could independently sustain the prosecution.

Analysis: No specific pleading or argument established that registration was required even where the goods were not exigible to duty. The complaint itself did not show that the prosecution rested on an independent offence of non-registration. In the absence of a demonstrated statutory basis for continuing the prosecution on that ground, non-registration at best amounted to an alleged irregularity and not a standalone foundation for criminal liability.

Conclusion: Non-registration did not furnish an independent ground to sustain the complaint.

Final Conclusion: The complaint and all consequential proceedings were quashed as continuation of the prosecution would amount to abuse of process after the underlying excise liability had been negatived.

Ratio Decidendi: Where the sole foundation of a criminal prosecution under the excise law is alleged evasion of duty, and the competent adjudicatory forum has finally held that no duty is leviable on the goods, the prosecution cannot be continued in the absence of an independent statutory offence.

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