Clandestine removal allegations cannot sustain criminal proceedings after merits-based exoneration on identical facts.

Criminal proceedings based on alleged clandestine removal of excisable goods could not continue where the departmental adjudication on the same facts ended in a categorical finding that the allegation was unproven. The Tribunal had held that no material established actual removal or duty evasion, and that exoneration on merits undermined the foundation of the complaint. On that identical factual basis, continuation of the criminal case would not serve the ends of justice. The High Court therefore quashed the complaint and the proceedings.

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Issues: Whether criminal proceedings based on alleged clandestine removal of excisable goods could continue after the Tribunal, on the same facts, had exonerated the assessees on merits.

Analysis: The complaint and the adjudication were founded on the same allegation of clandestine and illegal removal without disclosure to the Central Excise authorities. Although the original adjudication had gone against the petitioners, the Tribunal reversed those findings and held that no material had been brought on record to prove actual removal or establish duty evasion. Where the departmental adjudication on the identical factual foundation ends in a categorical finding that the allegation is not substantiated, continuation of a criminal complaint on the same facts would not serve the ends of justice.

Conclusion: The criminal complaint could not be allowed to continue, and the petitioners succeeded in seeking quashing of the proceedings.

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