Criminal prosecution based on identical excise allegations kept in abeyance pending departmental adjudication.

Criminal prosecution under the Central Excise Act, 1944 was challenged because it rested on the same allegations and materials as the departmental adjudication concerning alleged suppression of manufacture and clandestine removal. The adjudicatory order supporting the complaint had already been set aside and remanded, removing the original foundation for prosecution. While adjudication and prosecution may proceed simultaneously, continuation of a criminal case on identical facts, where exoneration in adjudication is on merits, may amount to abuse of process. On that basis, the criminal proceeding was directed to remain in abeyance until disposal of the departmental adjudication.

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Issues: Whether the criminal complaint under the Central Excise Act, 1944 should be kept in abeyance pending the outcome of the departmental adjudication proceedings when both proceedings rest on the same allegations and materials.

Analysis: The petitioners were facing prosecution on allegations of suppression of manufacture and clandestine removal of goods, which were the same allegations forming the basis of the adjudication proceedings. The adjudicatory order that had initially supported the complaint had already been set aside in appeal and the matter was remanded for fresh adjudication, thereby removing the original foundation of the prosecution. The governing principle is that adjudication and criminal prosecution may proceed simultaneously, but where the allegations are identical and exoneration in adjudication is on merits, continuation of the criminal case may amount to abuse of the process of court. Applying that principle, and noting that the two proceedings rested on the same factual foundation, the Court held that the criminal case should not continue independently at that stage.

Conclusion: The issue was decided in favour of the petitioners, and the criminal proceeding was directed to remain in abeyance until disposal of the departmental adjudication proceedings.

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