Criminal prosecution for excise duty evasion falls once the foundational demand and adjudication are set aside.

Criminal prosecution for alleged central excise duty evasion could not survive once the Supreme Court had set aside the underlying demand and adjudication against the company and its directors. The complaint rested entirely on that adjudication; after its displacement, continuation of proceedings under Sections 9 and 9AA of the Central Excise Act would serve no legal purpose and amount to abuse of process. The Allahabad HC therefore held the criminal case not maintainable and quashed it.

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Issues: Whether criminal proceedings for alleged evasion of central excise duty could continue under Sections 9 and 9AA of the Central Excise Act, 1944 after the Supreme Court had set aside the demand and the foundational adjudication against the company and its directors.

Analysis: The complaint arose solely from the adjudication order alleging contravention of excise provisions and evasion of duty. That foundation was displaced when the Supreme Court allowed the company's appeal, dismissed the Revenue's appeal, and set aside the impugned demand in toto. Once the basis of the complaint had been nullified, continuation of the criminal case would serve no legal purpose. The Court also relied on the principle that where the adjudication on merits does not sustain the charge, allowing criminal prosecution to proceed would amount to an abuse of process of court.

Conclusion: The criminal proceedings were not maintainable and were quashed in favour of the applicants.

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