2007 (8) TMI 263

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..... Solicitor General of India , assisted by Sri S.S. Tiwari and S.K. Mishra, advocates for Central Excise and Sri Pravendra Kumar, learned Addl. Government Advocate for the State have been heard. 2.  M/s Shahnaz Ayurvedic is manufacturing Ayurvedic Medicines under a drug licence for their two Units situated at Okhla New Delhi and Noida. In the year 1986, M/s Shahnaz Ayurvedic had declared before the Central Excise Department that it was manufacturing Ayurvedic Medicines and no excise duty was leviable thereon, but the Excise Department had issued a show cause notice dated 2.3.1988 under Section 11-A of the Central Excise Act, 1944 (Hereinafter referred to as the '' Act') and contended that they were manufacturing cosmetic and not Ayu....

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.... imposed the penalty of Rs. 50 lacs on M/s Shahnaz Ayurvedic and Rs. 25 lacs on M/s Shaherb Cosmetic under Rule -209 A of the Rules. 4.  The order was challenged before the Central Excise Gold Appellate Tribunal (CEGAT in short) but despite the fact that appeals were pending, the Central Excise Department filed a criminal complaint against the applicants about their two units for having evaded payment of Excise Duty under Section 9 of the Central Excise Act and also under Section 420 I.P.C. in Criminal court at Delhi and another at Meerut. 5.  Since the applicants could partly succeed before the CEGAT, they filed Civil Misc. Writ Petition No. No. 820 (T) of 2003, in the Allahabad High Court and the Division Bench upheld the ....

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....e High Court, and they, want to continue whipping a dead horse. It is manifest that after the High Court has held that there was no suppression or fraud and there was no concealment of facts and evasion of Tax the very foundation, on which the criminal complaint rested crumbled and collapsed and the criminal complaint against them under Section 420 I.P.C. and Section 9 of the Act, falls to the ground. 9.  An Ingenious argument advanced by the Addl. Solicitor General for the Central Excise was that the High Court has held that for the subsequent period, the Excise Authorities will be at liberty to make assessment according to law, and therefore, the criminal proceedings at Meerut will survive. This is a very strange argument which is....

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....s not only under Section 9 of the Central Excise Act but also under Section 420 I.P.C. This point does not arise for consideration now when it has been held that the complaint is un-maintainable. 12.  One of the argument from the side of the Addl. Solicitor General was that no orders should be passed in proceedings under Section 482 Cr.P.C. and the applicants should be asked to present an application for discharge under Section 245(2) Cr.P.C. If it is found, as here, that the proceedings are ab initio illegal and unfounded, there is no need or occasion to ask the applicants to observe the formality of going back and presenting an application for discharge. If the Court comes to the conclusion that the proceedings initiated against t....