Criminal prosecution for excise duty evasion may fail when adjudication finds no intention to evade and withdrawal is maintainable.

Criminal prosecution for alleged central excise duty evasion may be quashed where excise adjudication has already recorded no wilful default or intention to evade duty, because continuing the criminal case on the same factual basis is treated as inconsistent with those findings and an abuse of process. Withdrawal of such prosecution under Section 321 CrPC may also be sought by a Special Public Prosecutor appointed under Section 24(8) CrPC without prior Central Government permission, and refusal to permit withdrawal on that ground is unjustified.

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Issues: (i) Whether the criminal prosecution for alleged evasion of central excise duty could be continued after the adjudication had found no wilful default or intention to evade duty; (ii) Whether a Special Public Prosecutor appointed under Section 24(8) of the Code of Criminal Procedure, 1973 could move for withdrawal of the prosecution under Section 321 of the Code of Criminal Procedure, 1973 without prior permission of the Central Government.

Issue (i): Whether the criminal prosecution for alleged evasion of central excise duty could be continued after the adjudication had found no wilful default or intention to evade duty.

Analysis: The adjudicatory orders recorded that there was no wilful default and no intention to evade payment of central excise duty, even though the duty liability was upheld. In that setting, continuation of the criminal case was treated as inconsistent with the findings already recorded in the excise proceedings and as an abuse of the process of court.

Conclusion: The prosecution could not be continued and was liable to be quashed.

Issue (ii): Whether a Special Public Prosecutor appointed under Section 24(8) of the Code of Criminal Procedure, 1973 could move for withdrawal of the prosecution under Section 321 of the Code of Criminal Procedure, 1973 without prior permission of the Central Government.

Analysis: The withdrawal mechanism under Section 321 depends on the status of the prosecutor who moves the application. A Special Public Prosecutor appointed under Section 24(8) was treated as competent to seek withdrawal without obtaining prior Central Government permission, and the Magistrate was held to have misread the requirement of such permission.

Conclusion: Prior Central Government permission was not required, and the Magistrate's refusal to permit withdrawal was unjustified.

Final Conclusion: The criminal proceedings were terminated because the alleged offence could not be pursued in the face of the exonerative findings on intention and the withdrawal application was maintainable in law.

Ratio Decidendi: Where adjudicatory findings negate wilful evasion or intention to evade duty, criminal prosecution on the same basis may be quashed as an abuse of process, and a Special Public Prosecutor under Section 24(8) may seek withdrawal under Section 321 without prior Central Government permission.

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