Criminal prosecution based on a set-aside excise assessment fails when reassessment falls below the prosecution threshold.

Criminal proceedings for alleged central excise duty evasion cannot survive where the assessment forming their foundation has been set aside on appeal and remanded for de novo consideration. The earlier determination of higher evasion lost its basis, and the later reassessment fixed evasion below the monetary threshold then required to launch prosecution. A subsequent assessment could not cure the defect in the already instituted complaint; at most, it could create a fresh cause of action. The prosecution was therefore quashed as infructuous.

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Issues: Whether the criminal proceedings for alleged evasion of central excise duty were liable to be quashed as infructuous after the assessment order on which the complaint was founded had been set aside and the subsequent assessment fixed the duty evasion below the prosecution threshold.

Analysis: The complaint was based on an assessment determining evasion at Rs. 27,39,678/-, but that assessment had already been set aside in appeal and the matter was remanded for de novo consideration. After remand, the duty evasion was assessed at Rs. 4,03,000/-, which was below the monetary limit then required for launching prosecution. Since the earlier assessment had lost its foundation and the department had not challenged the remand order, the pending prosecution could not survive. The subsequent assessment, even if it later supported prosecution, would at best furnish a fresh cause of action and could not validate the already instituted proceedings.

Conclusion: The criminal proceedings were quashed as infructuous.

Final Conclusion: The prosecution could not continue once the assessment forming its basis was annulled and the revised determination fell below the requisite threshold for launching prosecution.

Ratio Decidendi: Criminal proceedings founded on an assessment that has been set aside cannot survive, and a later reassessment below the statutory threshold does not cure the defect in the already instituted prosecution.

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