TaxTMI 
TaxTMI 
2021 (6) TMI 677
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.... and the petitioner No.2 was the Managing Director of the petitioner No.1-company at the relevant point of time. 4. The petitioner No.1-company, at the relevant point of time, was manufacturer of cut tobacco which is excisable good as per the schedule incorporated under the provisions of the Act. The case of the prosecution is that on a surprise check on 15.06.1995 at the premises of one M/s. Tirupati Cigarettes Limited, Varanasi, Uttar Pradesh, it was found that 115 bags of cut tobacco accounted for 3,910 KGs was clandestinely cleared without separate documents and payment of excise duty. The documents seized from the custody of the accused reflected that the documents required to be used only once were repeatedly reused mainly for payment of excise duty. It is the further case of the prosecution that on 15.06.1995, they have intercepted another vehicle which was carrying 230 bags of cut tobacco accounted for 7,820 KGs, without paying excise duty. The prosecution further asserted that it has seized 60 empty bags which, according to them, were from cut tobacco, which was sold to M/s. Tirupati Cigarettes Limited. Thus, on the claim that M/s. Tirupati Cigarettes Limited has evaded....
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....0/- and is thus not available for confiscation. I, therefore, impose R.F. of Rs. 20,000/- and order appropriation of the said cash security towards Adjustment/payment of the said R.F. (xii) Order confiscation of the vehicle bearing No. UP-65H- 0167 seized by the Department under Section115 of the Customs Act, 1962 as applicable to the Central Excise cases. As this vehicle has already been released provisionally on execution of B-11 Bond of the value of Rs. 5.50 lakhs and furnishing of cash security in the form of NSC of Rs. 10,000/- and is thus not available for confiscation. I, therefore, impose R.F. of Rs. 20,000/- and order appropriation of the said cash security towards Adjustment/payment of the said R.F. This, however, does not preclude the Department from initiating any further proceedings under the Law for the time being in force. 6. The accused filed an appeal before the Customs, Excise and Service Tax Tribunal (CESTAT), South Zonal Branch, Bangalore, challenging the order dated 08.06.2001 passed by the Commissioner (Adjudication). The appellate authority, vide order dated 26.12.2003 in Final Stay Order No.1728 & 1729 of 2003, observed as under: ....
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....ousing was found on any of the 9 AR3As before seizure. Therefore, the claim of the appellants that the goods covered by these 9 AR3As are the goods which has been seized cannot be rejected. The conclusions drawn by the adjudicating authority that marks and numbers were not tallied is without any evidence a there was no panchanama showing marks and numbers found on the bags and the marks and numbers mentioned in the AR3As documents. No case has been established that the goods covered by AR3As were cleared without payment of duty. Hence demanding duty, taking the goods as cleared without payment of duty is contrary to law. We do not find the reasons given by the lower authority convincing in the absence of any evidence. 8. In view of our above findings, we allow both the appeals." 7. The petitioners, thus, contend that the CESTAT, which discharged judicial duties, having adjudicated the matter on merits, opined that there is absolutely no evidence to establish the guilt of the petitioners regarding evasion of excise duty or clandestine removal of goods. Thus, the respondent No.2 could not have proceeded to prosecute the petitioners, which amounted to violation of the fund....
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....thout maintaining statutory record and thereby, evaded payment of excise tax on the said goods. The Central Excise Officials have seized the goods i.e. cut tobacco in two vehicles. The statements of the witnesses were recorded under Section 14 of the Central Excise Act and they reveal that cut tobacco was discharged from the factory of A1 company and the same was transported to Varanasi. The investigation reveals that 34495.00 KGs of cut tobacco was clandestinely removed without payment of excise duty. Thus, basing on the material and documents collected during investigation, the case was adjudicated. Since there was complicity of many people spread all over India, the Commissioner at Delhi was nominated to adjudicate the case and the same was adjudicated on 08.06.2001 following due process of laws. The decision to launch prosecution was taken after due approval of Chief Commissioner and the same was launched on 23.07.2003. The department has challenged the orders of CESTAT dated 26.12.2003 in Appeal vide C.E.A.No.33 of 2004 before the High Court. Thus, the orders of CESTAT have not become final and the same is pending. 11. Learned Senior Central Government Standing Counsel furt....
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....unal's order no offence survives under the Income Tax Act and thus the quashing of the prosecution is automatic? (d) Whether the finding of the Income Tax Appellate Tribunal is binding upon the criminal court in view of the fact that the Chief Commissioner and the assessing officer who initiated the prosecution under Section 276-C(1) had no right to overrule the order of the Income Tax Appellate Tribunal? More so when the Income Tax Officer giving the effect to the order cancelled the penalty levied under Section 271(1)(c)? (e) Whether the High Court's order is liable to be set aside in view of the errors apparent on record? In similar circumstances, the Supreme Court in the decision supra observed that, in view of the Income Tax Tribunal adjudicating the matter in favour of the appellant, launching of criminal prosecution on the same set of facts cannot be sustained. It was held as follows: "25. In our opinion, the appellants cannot be made to suffer and face the rigours of criminal trial when the same cannot be sustained in the eye of the law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there ....
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....ng criminal prosecution; (iii) Adjudication proceedings and criminal proceedings are independent in nature to each other; (iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution; (v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure; (vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and (vii) 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. In our opinion, therefore, the yardstick would be to judge as to whether the a....