2001 (11) TMI 83 - HC - Central Excise

Court quashes criminal proceedings due to lack of intent, unsustainable prosecution based on findings.

The court quashed the criminal proceedings against the petitioner in EOCC Nos. 167 to 169 of 1996, as the Tribunal's findings indicated no intent to evade ... Prosecution vis a vis Tribunal decision Issues Involved:1. Whether the proceedings against the petitioner should be quashed due to the findings of the Customs, Excise, and Gold (Control) Appellate Tribunal (CEGAT).2. Whether the prosecution based on the same facts and evidence as the adjudication by the Tribunal is maintainable.3. The applicability of previous legal precedents to the current case.4. The relevance of the adjudication order by the Commissioner of Central Excise and its subsequent appeal outcome.Issue-wise Detailed Analysis:1. Quashing of Proceedings Based on Tribunal Findings:The petitioner sought to quash the proceedings in EOCC Nos. 167 to 169 of 1996, arguing that the CEGAT had already set aside the demand for duty and penalty imposed by the Commissioner of Central Excise. The Tribunal found that the petitioner had followed all prescribed procedures, including filing detailed declarations and classification lists, which were approved by the authorities. The Tribunal concluded that there was no mis-declaration or intent to evade duty, thus negating the grounds for the prosecution.2. Prosecution Based on Same Facts and Evidence:The complaints against the petitioner were essentially a repetition of the allegations made in the show cause notice dated 11-4-1991, which were adjudicated by the Commissioner of Central Excise and subsequently overturned by the CEGAT. The Tribunal's decision, which found no suppression or mis-declaration, rendered the prosecution on the same facts and evidence unsustainable. The court held that continuing with the prosecution would be an exercise in futility and an abuse of the process of the court.3. Applicability of Previous Legal Precedents:The petitioner's counsel cited several precedents to support the argument that criminal prosecution cannot be sustained when the adjudicating authority's findings are in favor of the petitioner. In Uttam Chand v. Income Tax Officer, the Supreme Court quashed the prosecution based on the Tribunal's findings. Similarly, in S.K. Sinha v. S.K. Shingal, the Delhi High Court held that if the department accepts the Tribunal's findings, it cannot pursue criminal liability on the same facts. The Supreme Court in G.L. Didwania v. Income Tax Officer also quashed the prosecution where the Tribunal had set aside the findings of the assessing authority.4. Relevance of Adjudication Order and Appeal Outcome:The prosecution was initiated based on the adjudication order by the Commissioner of Central Excise, which demanded duty and imposed a penalty on the petitioner. However, the CEGAT's order dated 9-7-1999 set aside this adjudication, finding that the petitioner had complied with all procedural requirements and there was no intent to evade duty. The court noted that the department did not challenge the Tribunal's decision, which had become final. Consequently, it was not legal to prosecute the petitioner on the same facts and evidence that had been adjudicated in their favor.Conclusion:In light of the Tribunal's findings, the court concluded that the criminal proceedings against the petitioner were not maintainable. The petitions were allowed, and the proceedings in EOCC Nos. 167 to 169 of 1996 were quashed. The court emphasized that requiring the petitioner to undergo prosecution based on the same set of facts and evidence would be unjust and amount to persecution.