TaxTMI 
TaxTMI 
2021 (3) TMI 693
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....ase is that the respondent has filed the complainant against these petitioners and also accused Nos.1 and 2 and the said complaint is numbered as PCR No.45/2020 and after registering the complaint, the learned Magistrate, dispensed the recording of sworn statement since the complainant is a Government servant and proceeded to take the cognizance vide order dated 07.11.2020. 3. The allegation in the complaint is that accused No.1is engaged in the manufacture of three I.E. products viz., diesel engine conditioner, fuel system cleaner and intake system cleaner for accused No.3 classifiable under CHS 34031900, 34039900 and 34039900 respectively. The accused No.1 hasevaded the payment of Central Excise Duty amounting to Rs. 3,02,87,970/- and removed excisable goods in contravention of Rules 6, 8, 11 and 12 of the Central Excise Rules, 2002. The accused No.1 acquired the possession of the excisable goods orconcerned himself in depositing, keeping, concealing, selling, purchasing or clandestine removal of the excisable goods without payment of duty knowing fully well and suppressed the facts from the department and accused Nos.1 and 3 have committed offence punishable under Sections 9(1)....
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....e excise duty to the tune of Rs. 3,02,87,970/-. 8. The main contention of the learned counsel for thepetitioners is that the Commissioner has confirmed the notice and imposed the penalty, but there is no recommendation for criminal prosecution. The said order has been challenged by filing an Appeal, which is pending for adjudication before the Appellate Authority. When such being the case, there cannot be any criminal proceedings against the petitioners herein. The other contention of the learned counsel for the petitioners is that the computation of the excise duty payable is also disputed since the same has been calculated on the transactional value and the MRP is not permissible. If the excise duty is properly calculated, it would be less than the minimum limit. Hence, there cannot be any initiation of the criminal prosecution, if the excise duty to be paid is less than the minimum limit. Hence, the very complaint filed by the complainant is a premature one as the complaint does not disclose the monitory value. When such being the case, there cannot be any criminal prosecution against the petitioners. 9. Learned counsel for the petitioners would submit onwhen the matter is pen....
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.... also brought to the notice of this Court circulars bearing No.1009/16/2015-C.X. dated 23.10.2015 and No.201/11/2016-S.T. dated 30.09.2016. 12. The main argument of the learned counsel for the petitioners is that the prosecution cannot be continued, when the same is pending for adjudication. Learned counsel referring to the judgment in the case of KAVVERI TELECOM PRODUCTS LIMITED V. ADDITIONAL COMMR OF C.EX.(LEGAL), BENGALURU reported in 2020 (371) E.L.T. 834 (Kar.) wherein this Court held that the proceedings are quashed for the present reserving liberty to the respondent to initiate appropriate action depending upon the result of the proceedings pending before the Customs, Excise and Service Tax Appellate Tribunal, Bengaluru. 13. Learned counsel also brought to the notice of this Court the judgment of the Apex Court in the petition for Special Leave to Appeal (Crl.) No.6486/2019 between ADDITIONAL COMMISSIONER OF CENTRAL EXCISE (LEGAL), BENGALURU V. M/S. KAVVERI TELECOM PRODUCTS LIMITED AND ANR., wherein it has been held that at the most, the criminal proceedings could have been kept in abeyance till the disposal of the matter before the Appellate Authority/Tribunal (CESTAT). ....
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....ght to the notice of this Court para No.6 of the said judgment, wherein the Apex Court has held that the circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. 18. Learned counsel relied upon the judgment of the Constitutional Bench of the Apex Court in the case of COLLECTOR OF C.EX., VADODARA V. DHIREN CHEMICAL INDUSTRIES reported in 2002 (139) E.L.T. 3 (S.C.), wherein the Apex Court at para No.9 has held that regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the revenue. 19. Learned counsel further relied upon the judgment of the Punjab and Haryana High Court at Chandigarh in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-III ....
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....in it is held that the High Court had ample power to pass any order by exercising its power under Section 482 ibid to do complete justice between the parties. 27. Learned counsel further relied upon the judgment of the Kerala High Court in the case of NANDAKUMAR V. INCOME TAX OFFICER reported in 2009 SCC Online Ker 1399, wherein it is held that the since the decision of the Appellate Authority has a direct impact on the criminal prosecution, it is just and desirable that the criminal proceedings are kept pending till a final decision is taken on the matters pending before the appropriate forum. 28. Learned counsel further relied upon the judgment of the Patna High Court in the case of GAURI SHANKAR PRASAD AND OTHERS V. UNION OF INDIA AND OTHERS reported in 2003 SCC Online Pat 102, wherein it is held in para Nos.14 and 15 that petitioner has been able to make out a case for the grant of interim stay of the criminal cases by considering a decision of the Apex Court in the case of COMMISSIONER OF INCOME TAX, MUMBAI V. BHUPAN CHAMPAK LAI DALAI reported in (2001) 3 SCC 459. 29. Learned counsel relied upon the judgment of the Apex Court in the case of UNIWORTH TEXTILES LTD., V. COMMIS....
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....ough it was not proper to deny relief to the petitioner solely on the ground that he had failed to surrender himself before criminal Court and only the Court has to look into the material collected by investigating agency prima facie were not sufficient to make out ground for prosecution of the petitioner for the offences charged against him. 33. Learned counsel also relied upon the judgment of the Apex Court in the case of V.Y.JOSE AND OTHERS V. STATE OF GUJARAT AND OTHERS reported in (2009)3 SCC 78 and brought to the notice of this Court para Nos.13 and 15, wherein the Apex Court held that the facts disclosing the ingredients of the offence must be averred and the Court should not hesitate to exercise its jurisdiction under Section 482 of Cr.P.C. 34. Learned counsel for the respondent referred to thecommunication/report of the office of the Commissioner of Central Excise dated 19.07.2016 forwarding of proposal and statement of facts for obtaining permission for launching of prosecution against M/s. Indi Cans, wherein it is observed that all the notices as mentioned had carefully devised the scheme with deliberate intention to evade payment of duty thus defrauding Government exc....
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....o an abuse of process of the Court and the pendency of the reassessment proceedings cannot act as bar. The Apex Court also observed that the prosecution in those circumstances cannot be quashed on the ground that it is a premature one. 38. Learned counsel relied upon the judgment of the Apex Court in the case of RADHESHYAM KEJRIWAL V. STATE OF WEST BENGAL AND ANOTHER reported in (2011)3 SCC 581 and brought to the notice of this Court para No.38, wherein the Apex Court has stated 7 ratios which can be culled out from the decisions broadly in continuing the criminal proceedings. 39. Learned counsel also relied upon the judgment of the Apex Court in the case of STANDARD CHARTERED BANK V. DIRECTORATE OF ENFORCEMENT reported in (2006) 67 SCL 2 (SC) wherein the Apex Court discussed with regard to the offences and prosecution - whether a complaint under Section 56 can never be said to be premature, if it is instituted before awarding of penalty under Section 50 and such criminal proceeding being an independent proceeding, can be initiated during the pendency of the adjudication proceeding under Section 51. 40. Learned counsel also relied upon the judgment of the Apex Court in the case ....
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.... V. INCOME-TAX OFFICER reported in (1995) 81 TAXMAN 463 (PUNJAB AND HARYANA) wherein the Punjab and Haryana High Court held that merely because second appeal again was accepted prosecution proceedings could not be quashed inasmuch as result of proceedings under the Act would not be binding on criminal court. 47. Learned counsel also relied upon the judgment in the case of SUPERINTENDENT (PROSECUTION) CENTRAL EXCISE AND CUSTOMS DEPARTMENT V. ASHOK LEYLAND LTD., reported in (2015) 56 TAXMANN.COM 309 (RAJASTHAN) wherein the Rajasthan High Court held that exoneration in adjudication proceedings was not on merits, assesee-accused cannot take a shelter thereof to avoid the prosecution proceedings. 48. Learned counsel relied upon the judgment of the Calcutta High Court in the case of BAIDYANATH BASAK V. UNION OF INDIA reported in (1983) 1983 TAXMANN.COM 638 (CALCUTTA) wherein it is held that departmental proceedings pending criminal case in Court are not double jeopardy. Right of silence pending criminal case hearing is non-applicable as departmental and court proceedings are different. 49. Learned counsel also relied upon the judgment of the Supreme Court in the case of BENGAL IRON CO....
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....regard to culpable state of mind. Learned counsel referred to para No.27 of the judgment, wherein it is observed that respondent department was virtually prevented from exercising its powers even like issuing summons. By such order, the petitioners indirectly got relief of anticipatory bail, which is also not ordinarily permissible in proceeding of present nature. The circumstance needs to be kept in mind by Court as the granting of relief or anticipatory bail hampers investigation and such approach causes damage to the image of judiciary. 54. Learned counsel also relied upon the judgment of the Madras High Court in the case of ASSISTANT COLLECTOR OF CUSTOMS, MADRAS V. GOVINDASAMY RAGUPATHY reported in 1997(2) MWN (CR.)205 with regard to the culpable mental state of mind. In respect of Section 138A of the Customs Act, the burden to prove the non-existence of the presumed culpable mental state is paramount and heavily cast on the accused. Learned counsel also brought to the notice of this Court para Nos.14, 15 and 16, wherein the Madras High Court has discussed with regard to escape of the accused from the clutches of the law, especially, in the light of the fact that the subject m....
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....tion, i.e., to issue a writ of certiorari or a direction for quashing the criminal proceedings. The main allegation in the complaint is that all these petitioners have committed the offence punishable under Sections 9(1)(b),9(1)(bbbb), 9(1)(d), 9AA(1) and 9AA(2) of the Central Excise Act, 1944. The specific allegation against all the accused is that they evaded the payment of the Central Excise Duty amounting to Rs. 3,02,87,970/- and removed excisable goods in contravention of the Rules enumerated in the Central Excise Rules, 2002 apart from the penal provisions. 59. It is not in dispute that accused No.3 is a multinational company engaged in the manufacturing and trading of the various products. It is also not in dispute that accused No.3 had supplied all the raw materials to accused No.1 and manufacturing activities were undertaken by accused No.1. It is the contention of the learned counsel for the petitioners that service charges are paid. But the question before this Court is that the excise duty has not been paid. Hence, the prosecution is initiated against all the accused, but in this case, accused No.3-Company as well as its office bearers have filed the present petition. ....
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....t has been held that theadjudication proceedings and criminal prosecution can be launched simultaneously. It is also observed that in case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases. 64. The decision which has been referred by the petitioners herein in Videocon's Case is decided on 19.04.2016 that is subsequent to the judgment of the Air Customs Officer's case, wherein the Apex Court discussed in para No.18 the principles laid down in Radheshyam's case and clarifying the position has come to the conclusion that if adjudicating authority opined that there is no contravention of any of the provisions of the Act, it would be unjust and an abuse of process of the Court to permit the Enforcement Directorate to continue with the criminal prosecution. The Apex Court concurring with the said view in Radheshyam's case has come to the conclusion that it would be unjust and an abuse of process of Court to permit the Enforcement Directorate to....