2023 (10) TMI 1215

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....The offence alleged against the petitioners are under Section 9 of the Central Excise Act, 1944. 2. Heard learned Counsel for the petitioners and Sri Domnic Fernandes, learned Special Senior Standing Counsel for the respondent. 3. The Deputy Commissioner (Legal) of Central Excise and Service Tax, filed a complaint before the Special Judge for Economic Offences alleging that the 1st petitioner represented by the 2nd petitioner who is the Managing Director, evaded Central Excise duty in the guise of trading of Modular Furniture, falling under the heading 9403 of the first schedule to the Central Excise Tariff Act, 1985, even after crossing the threshold exemption limit prescribed under notification No.8/2003-CE, dated 01.03.2003, as such li....

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....the guise of trading of Modular Furniture. The office note was put up on 17.07.2014. In the said office note it is mentioned that Prosecution against the petitioner company may be sanctioned since it is a case of serious nature and there is sufficient evidence to prove fraudulent intention. Further, the notes are to the effect that there was penalty of Rs.5,000/- imposed against the 2nd petitioner who is the Managing Director and no proposal for prosecution of the Managing Director was suggested as the said penalty was set aside by the Commissioner (Appeals) vide OIA 89 & 90/2011 (H-I) CE, dated 14.11.2011. The proposal for launching prosecution submitted by the Hyderabad-1, Commissioner was put up for perusal and approval on 31.07.2014. 6....

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....t up seeking sanction, would suffice to prosecute the petitioners. It is clearly mentioned in the complaint and also in the letter that the Chief Commissioner has accorded administrative approval for launching prosecution against the 1st petitioner. In accordance with the Circular No.1009/16/2015-CX an order conveying the sanction issued by the sanctioning authority and forwarded to the Commissionerate concerned for appropriate action would suffice. The said letter dated 01.08.2014 and the other communication is the 'sanction' that was required for prosecution and there are no separate sanction orders. 9. Having gone through the circular No. 1009/16/2015-CX, dated 23.10.2015, the relevant provisions to sanction prosecution are as under: ....

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....nd proceedings have to be issued by giving reasons as to why prosecution has to be launched. A duty is cast upon the competent authority to apply its mind to the facts of the case to grant sanction. A statute requiring sanction to be made is for the purpose or ensuring that criminal prosecution is not launched vexatiously or improperly or in a routine manner or when no offence is made out. The competent authority has to shoulder responsibility of scrutinizing the available material and record its satisfaction to criminally prosecute a person. The grant of sanction was described as a solemn and sacrosanct act by the Honourable Supreme Court in various Judgments. 12. The Honourable Supreme Court in Mansukhlal Vithaldas Chauhan v. State of Gu....