TaxTMI 
TaxTMI 
2025 (9) TMI 399
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....counsels that the 3rd respondent did not participate in the trial in Criminal M.P.No.12824 of 2025 before the learned Chief Judicial Magistrate, Trichirappalli. That apart, he is only the General Manager of the 2nd respondent company and he is not a necessary party to this case. Memo has also been filed to that effect. Recording the same, notice to R-3 is dispensed with. 3. Case of the Prosecution/Complainant: A complaint was originally lodged in 2006 on the strength of show-cause notices dated 17.08.2004 and 20.10.2004, culminating in an adjudication order dated 30.12.2005 passed by the Commissioner of Central Excise. On appeal, the Customs, Excise and Service Tax Appellate Tribunal (herein after referred to as "CESTAT") Chennai, set aside the said adjudication order, holding that excise duty cannot be demanded from two different entities for the same goods, while leaving liberty to the department to issue fresh notices. Pursuant thereto, two fresh notices dated 24.07.2007 were issued, and after due representation by Accused Nos.1, 3 and 5, a fresh order-in-original was passed on 09.08.2023 by the Joint Commissioner, GST, Trichirappalli. Since this order directly concerns th....
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....ication order dated 30.12.2005. That order, along with the show-cause notices, was later set aside by the CESTAT in its order dated 08.03.2007, holding that two manufacturers cannot be liable for the same goods. The CESTAT permitted the department to issue fresh show-cause notices and proceed in accordance with law. 6.2. Subsequent Adjudication and Complaint Chronology: The department issued fresh show-cause notices dated 24.07.2007 to Aravind Steel and Arudhra Steel. A civil miscellaneous application in CMA(MD)No.3235 to 3238 of 2007 was filed before this court against the CESTAT order dated 08.03.2007 and the Division Bench by order dated 05.01.2021, left the legal issue open, directing adjudication to proceed. The Joint Commissioner, after remand, passed a fresh adjudication order on 09.08.2023. The prosecution seeks to now mark this 2023 adjudication order in the pending prosecution initiated in 2006. 6.3. Section 173(5) Cr.P.C., 1973, Not Applicable: The 2023 adjudication order was not part of the original documents perused by the sanctioning authority in 2006 and was not in existence when the complaint was filed. Section 173(5) applies only to cases instituted on ....
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....ted in the 2023 adjudication. The Hon'ble Division Bench of this Court in CMA Nos. 3235 to 3238/2007 recorded that the department was proceeding with the fresh show-cause notices and left the legal issue open. 7.3. Relevance and Admissibility of 2023 Order: The adjudication order dated 09.08.2023 was passed after due process. The prosecution only seeks to mark it as evidence its probative value will be tested at trial. The order is not disputed; therefore, under Section 294 Cr.P.C., 1973, formal proof is not necessary. 7.4. No Prejudice Caused to the Petitioners: The 2023 order only strengthens the prosecution's case. If the accused claim it helps them, they may rely on it during the trial. The prosecution merely wants the record to reflect the latest development and shift in liability. The accused is not prejudiced as the trial court can still assess the impact of this document. 7.5. Distinction Between Sanction and Approval: Contended that under the Central Excise Act, obtaining sanction is not mandatory only administrative approval is required. The 1990 and 2007 circulars merely create internal checks and balances, not statutory mandates. Cited Panchamal Pl....
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....The Supreme Court in Assistant Collector of Customs v. L.R. Malvani (Supra 1), has categorically held that Sections 173(4) and 173(5) have no application to such complaints and the relevant portions are extracted as follows: "12. On a plain reading of Section 173, Criminal Procedure Code, it is clear that the same is wholly inapplicable to the facts of the present case. In the instant case no report had been sent under Section 173, Criminal Procedure Code. Therefore that provision is not attracted. That provision is attracted only in a case investigated by a police officer under Chapter XIV of the Criminal Procedure Code, followed up by a final report under Section 173, Criminal Procedure Code. It may be remembered that sub-section (4) of Section 173, was incorporated into the Criminal Procedure Code for the first time by Central Act 26 of 1955, presumably because of the changes effected in the mode of trials in cases instituted on police reports. Before the Criminal Procedure Code was amended by Act 26 of 1955, there was no difference in the procedure to be adopted in the cases instituted on police reports and in other cases. Till then in all. cases irrespective of the fa....
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....hat the legislature has applied its mind to the question of the amendment of the procedure so far as the investigation of an offence under the Sea Customs Act is concerned at the time when it was considering amendments to the Criminal Procedure Code" is without any basis. In the first place, it is not proper to assume except on very good grounds that there is any lacuna in any statute or that the legislature has not done its duty properly. Secondly from the history of the legislation to which reference has been made earlier, the reason for introducing Section 173(4) is clear. The learned judges of the High Court were constrained to hold that Section 173(4), Criminal Procedure Code in terms does not apply to the present case. But strangely enough that even after coming to the conclusion that provision is inapplicable to the facts of the present case, they have directed the learned Magistrate to require the prosecution to make available to the accused, the copies of the statements recorded from the prosecution witnesses during the enquiry under the Customs Act." The concession by the prosecution itself before this Court that invocation of Section 173(5) was erroneous fortifies thi....
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....use this being a manifest defect in the prosecution, and the entire proceedings are rendered void ab initio. The Hon'ble supreme Court in number of cases held that the grant of sanction is not a mere formaly, but a solemn and sacrosanct act which affords protection to a persons against frivolous prosecution and the Court shall also consider whether before granting sanction, the sanctioning authority was aware of the facts constituting the offence and apply its mind before granting sanction for prosecution." (iii) The Circular :15/90-CX.6 dated 09.08.1990 which provides with the guidelines for prosecution under the Central Excises & Salt Act,1944, mandates as follows: "2. The guidelines so far issued are not being revised and incorporated in this letter. These are as unders - (i) Prosecution should be launched with the final approval of the Principal Collector after the case has been carefully examined by the Collector in the light of the guidelines. (ii) Prosecution should not be launched in cases of technical nature, or where the additional claim of duty is based totally on a difference of interpretation of law. Before launching any prosecut....
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....erson, Director, Manager or any other person who is responsible for conduct of business of the company/firm and is found guilty of the offences under the Act/Rules. It has been provided that prosecution may be launched in cases involving duty amount of Rs. 25 lakh or more. However, prosecution can be considered in case of habitual offenders irrespective of monetary limit prescribed, if circumstances so warrant. As per the procedure laid down for launching of prosecution, the Commissioner of Central Excise should process and forward the proposal to the Chief Commissioner (or the Director General of Central Excise Intelligence as the case my be) in cases which are fit for launching of prosecution. As per the instructions issued in this regard, the Chief Commissioner or DG, (CEI) has power to sanction prosecution. It is also mentioned that the decision to launch prosecution should be taken by the adjudicating authority immediately after the passing of adjudication order." Hence, without fresh sanction, the 2023 order cannot be pressed into service. 10.3. Prejudice to the Accused: The prosecution contends that the order is not disputed and therefore can be marked under Section....