Customs prosecution quashed after adjudication penalty was deleted on merits, as continuation was treated as abuse of process.

Where penalty imposed in customs adjudication is deleted on merits, a criminal prosecution founded on the same allegations may be quashed as an abuse of process. The SC treated the setting aside of the penalty by the appellate tribunal on merits as decisive, because the prosecution rested on the same factual foundation. On that basis, continuation of the criminal case was held unjustified and the prosecution was quashed.

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Issues: Whether criminal prosecution under the Customs Act could be quashed after the penalty imposed in the adjudication proceedings had been deleted on merits.

Analysis: The penalty arising out of the confiscation proceedings had already been set aside by the appellate tribunal on merits. In such a situation, the continuation of prosecution based on the same foundation was treated as unjustified and as amounting to abuse of the process of court. The decision was taken as covered by the principle applied where a penalty order is deleted on merits.

Conclusion: The prosecution was quashed and the appeal was allowed.

Final Conclusion: Once the penalty in the underlying adjudication proceedings stood deleted on merits, the connected criminal prosecution could not be sustained.

Ratio Decidendi: Where a penalty imposed under the fiscal statute is deleted on merits in adjudication, criminal prosecution founded on the same allegations may be quashed as an abuse of process.

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