Criminal prosecution for excise evasion not quashed where Board circular limits were prospective and habitual evasion was alleged.

Central excise prosecution was examined against Board circulars fixing monetary limits for launch of complaints. The circulars bind departmental authorities, but they do not automatically require quashing of a criminal complaint after cognizance has been taken. A later circular raising the threshold was treated as prospective and was not applied to alleged pre-circular contraventions. The earlier guideline also preserved prosecution where the allegations showed habitual or systematic evasion over a period of time, and the complaint was read as alleging conduct continuing for more than two years. At the Section 482 stage, the Court declined to test the truth of the allegations and held that the complaint was not liable to be quashed on the basis of the circulars.

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Issues: Whether criminal proceedings for alleged evasion of central excise duty could be quashed under the inherent jurisdiction of the High Court on the ground that the departmental complaint was filed contrary to Board circulars prescribing monetary limits for prosecution.

Analysis: The circulars issued by the Central Board of Excise and Customs are binding on departmental , but that does not by itself require quashing of a complaint once a criminal court has taken cognizance. The later circular enhancing the monetary threshold was treated as prospective, and therefore not applicable to alleged contraventions occurring prior to its issuance. The earlier guideline also preserved prosecution in cases involving habitual offenders or systematic evasion over a period of time. Reading the complaint as a whole, the alleged evasion was said to have continued over more than two years, bringing the case within the habitual or systematic evasion exception. At the stage of Section 482 jurisdiction, the Court declined to test the truth of the allegations or to decide whether a contravention had in fact occurred.

Conclusion: The complaint was not liable to be quashed on the basis of the Board circulars, and the criminal proceedings were allowed to continue.

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