Final setting aside of excise demand defeats prosecution founded on alleged duty evasion and quashes the summoning order.

Where the CESTAT finally set aside the underlying excise duty demand and the departmental challenge failed, the very foundation for alleging duty evasion ceased to exist. Criminal prosecution under Sections 9 and 9AA of the Central Excise Act could not survive on a demand that no longer subsisted, and the complaint proceedings, including the summoning order, were quashed.

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Issues: Whether the criminal prosecution and summoning order under Sections 9 and 9AA of the Central Excise Act, 1944 could survive after the CESTAT set aside the underlying duty demand and that decision attained finality.

Analysis: The adjudication order confirming demand and penalty had been carried in appeal before the Tribunal, which allowed the appeal. The subsequent departmental appeal was dismissed as not maintainable, leaving the Tribunal's order final. Once the basis of the alleged evasion ceased to survive on final adjudication, the continuation of criminal proceedings on the same foundation could not be justified.

Conclusion: The criminal prosecution was held unsustainable and the complaint proceedings, including the summoning order, were quashed in favour of the applicants.

Final Conclusion: The proceedings arising out of the complaint case stood annulled because the final appellate determination removed the foundation for prosecution.

Ratio Decidendi: Where the competent tax appellate forum has finally negated the very basis of alleged duty evasion, criminal prosecution founded on that basis cannot be sustained.

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