TaxTMI 
TaxTMI 
2026 (7) TMI 1350
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....punishable under Section 9 read with Section 9AA of Central Excise Act, 1944 for evasion of central excise duty and noncompliance of the final order dated 02.07.2001 passed by Customs Excise and Gold (Control) Appellate Tribunal, New Delhi. 3. It was asserted that the accused No. 1 M/s Seamax Industries Ltd. (SIL), was earlier working under the name and style of M/s Seamax Steel Tubes (Pvt) Ltd. (SST). They were the manufacturers of M.S pipes, SS Mast or Towers falling under the Chapter Heading No. 7306.90 and 7308.20 of the Schedule to the Central Excise Tariff Act, 1985. The Structural Galvanising Industry (SGI) was situated inside the factory premises of SIL and was engaged in galvanising. SIL manufactured black pipes and MS pipes, and sent them to SGI for galvanisation without an exit pass/gate pass entry. SGI did not pay any excise duty on the galvanised pipes on the ground that the galvanisation of black pipe did not attract any central excise duty. M.S. Black Pipes were exempted from central excise duty till 28.02.1994. Accused nos. 1 to 3 did not enter the galvanised product after galvanisation in the record before its marketing. In this manner, MS pipes/black pipes manu....
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....e civil proceedings are distinct from the criminal proceedings, and the judgment of the Civil Court is not binding upon the Criminal Court, but the order of adjudication would have a persuasive effect on the criminal proceedings. Therefore, it was prayed that the present revision be allowed and the judgment passed by the learned Trial Court be set aside. 7. I have heard Mr Vijay Arora, learned Senior Counsel, assisted by M/s Hitansh Raj & Ankit Chauhan, learned counsel for the petitioner, Mr Rakesh Manta, learned counsel for respondents No. 1 and 2, and Mr Aryan Manta, Advocate, vice Mr T.K. Verma, learned counsel for respondent No.3. 8. Mr Vijay Arora, learned Senior Counsel for the petitioner, submitted that the learned Trial Court erred in discharging the accused. There was sufficient material on record to frame the charges. The Court is concerned with a prima facie case while framing the charges, and the material on record prima facie established that there was an evasion. Therefore, he prayed that the present revision be allowed and the order passed by the learned Trial Court be set aside. He relied upon the judgment of Hon'ble Supreme Court in M/s Rimjhim Ispat Limited ....
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....t the stage of consideration of an application for discharge, the court has to proceed with an assumption that the materials brought on record by the prosecution are true and evaluate the said materials and documents with a view to finding out whether the facts emerging therefrom, taken at their face value, disclose the existence of all the ingredients constituting the alleged offence. At this stage, the probative value of the materials has to be gone into, and the court is not expected to go deep into the matter and hold that the materials would not warrant a conviction. In our opinion, what needs to be considered is whether there is a ground for presuming that the offence has been committed and not whether a ground for convicting the accused has been made out. To put it differently, if the court thinks that the accused might have committed the offence on the basis of the materials on record on its probative value, it can frame the charge; though for conviction, the court has to come to the conclusion that the accused has committed the offence. The law does not permit a mini-trial at this stage." 11. The defence of the accused is not to be looked into at the stage when th....
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....in the trial of a warrant case on the basis of a police report and that instituted otherwise than on the police report is particularly marked in Sections 238 and 239 CrPC on one side and Sections 244 and 245 CrPC on the other. Under Section 238, when in a warrant case, instituted on a police report, the accused appears or is brought before the Magistrate, the Magistrate has to satisfy himself that he has been supplied the necessary documents like the police report, FIR, statements recorded under sub-section (3) of Section 161 CrPC of all the witnesses proposed to be examined by the prosecution, as also the confessions and statements recorded under Section 164 and any other documents which have been forwarded by the prosecuting agency to the court. 20. After that, comes the stage of discharge, for which it is provided in Section 239 CrPC that the Magistrate has to consider the police report and the documents sent with it under Section 173 CrPC and if necessary, has to examine the accused and has to hear the prosecution of the accused, and if on such examination and hearing, the Magistrate considers the charge to be groundless, he would discharge the accused and record his r....
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....used appears or is brought before the court, or the evidence is led under Section 244 CrPC. The words appearing in Section 245(2) CrPC "at any previous stage of the case" clearly bring out this position. Xxx 36. The Magistrate has the power to discharge the accused under Section 245(2) CrPC at any previous stage i.e. before the evidence is recorded under Section 244(1) CrPC, which seems to be the established law, particularly in view of the decision in Cricket Assn. of Bengal v. State of W.B. [(1971) 3 SCC 239: 1971 SCC (Cri) 446], as also the subsequent decision of the Bombay High Court in Luis de Piedade Lobo v. Mahadev Vishwanath Parulekar [1984 Cri LJ 513 (Bom)]. The same decision was followed by the Kerala High Court in Manmohan Malhotra v. P.M. Abdul Salam [1994 Cri LJ 1555 (Ker)], and Hon'ble Justice K.T. Thomas, as the learned Judge then was, accepted the proposition that the Magistrate has the power under Section 245(2) CrPC to discharge the accused at any previous stage. The Hon'ble Judge relied on a decision of the Madras High Court in Mohd. Sheriff Sahib v. Abdul Karim Sahib [AIR 1928 Mad 129 (1)], as also the judgment of the Himachal Pradesh H....
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....xigencies and formidable compulsions justify such a course. We hasten to add that even in such exceptional cases, the High Court can look into only those documents which are unimpeachable and can be legally translated into relevant evidence. 8. Apart from the infirmity in the approach of the High Court in dealing with the matter which we have already noticed, we further find that instead of adverting to and confining its attention to the documents referred to in Sections 239 and 240 CrPC the High Court has dealt with the rival contentions of the parties raised through their respective affidavits at length and on a threadbare discussion thereof passed the impugned order. The course so adopted cannot be supported; firstly, because finding regarding the commission of an offence cannot be recorded on the basis of affidavit evidence and secondly, because at the stage of framing of charge, the Court cannot usurp the functions of a trial court to delve into and decide upon the respective merits of the case.' (emphasis supplied) 18. With great respect, we express our reservations in fully acceding to what has been stated above. If Paragraph 8 of Minakshi Bala (su....
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....following principles emerge: (1) That the Judge, while considering the question of framing the charges under Section 227 of the Code, has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out. (2) Where the materials placed before the Court disclose a grave suspicion against the accused which has not been properly explained, the Court will be fully justified in framing a charge and proceeding with the trial. (3) The test to determine a prima facie case would naturally depend upon the facts of each case, and it is difficult to lay down a rule of universal application. By and large, however, if two views are equally possible and the Judge is satisfied that the evidence produced before him, while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused. (4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced court cannot act merely as a Post Office or a mouthpiece of the prosecution, but ....
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....232CrPC, cannot be ruled out, as such instances are aplenty. In this context, it is relevant to refer to a decision of this Court in Om Parkash Sharma v. CBI, (2000) 5 SCC 679: 2000 SCC (Cri) 1014. Taking note of the language of Section 227 CrPC, is in negative terminology and that the language in Section 232CrPC, is in the positive terminology and considering this distinction between the two, this Court held that it would not be open to the Court while considering an application under Section 227 CrPC, to weigh the pros and cons of the evidence alleged improbability and then proceed to discharge the accused holding that the statements existing in the case therein are unreliable. It is held that doing so would be practically acting under Section 232 CrPC, even though the said stage has not been reached. In short, though it is permissible to sift and weigh the materials for the limited purpose of finding out whether or not a prima facie case is made out against the accused, on appreciation of the admissibility and the evidentiary value such materials brought on record by the prosecution is impermissible as it would amount to denial of opportunity to the prosecution to prove them app....
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.... 1 SCC 715: 1989 SCC (Cri) 285; P. Vijayan v. State of Kerala, (2010) 2 SCC 398 : (2010) 1 SCC (Cri) 1488; and Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4: 1979 SCC (Cri) 609 as under:- "21. In the decision in Stree Atyachar Virodhi Parishad v. Dilip Nathumal Chordia [Stree Atyachar Virodhi Parishad v. Dilip Nathumal Chordia, (1989) 1 SCC 715: 1989 SCC (Cri) 285], this Court held that the word "ground" in Section 227 CrPC did not mean a ground for conviction, but a ground for putting the accused on trial. 22. In P. Vijayan v. State of Kerala [P. Vijayan v. State of Kerala, (2010) 2 SCC 398: (2010) 1 SCC (Cri) 1488], after extracting Section 227 CrPC, this Court in paras 10 and 11 held thus: (SCC pp. 401-402) "10. ... If two views are possible and one of them gives rise to suspicion only, as distinguished from grave suspicion, the trial Judge will be empowered to discharge the accused, and at this stage he is not to see whether the trial will end in conviction or acquittal. Further, the words "not sufficient ground for proceeding against the accused" clearly show that the Judge is not a mere post office to frame the charge at the behest of the p....
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....d experienced court cannot act merely as a post office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This, however, does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he were conducting a trial." 16. In M.E. Shivalingamurthy v. Central Bureau of Investigation Bengaluru, (2020) 2 SCC 768 : (2020) 1 SCC (Cri) 811, this Court has held as under:- "17. This is an area covered by a large body of case law. We refer to a recent judgment which has referred to the earlier decisions, viz. P. Vijayan v. State of Kerala and discern the following principles: 17.1. If two views are possible and one of them gives rise to suspicion only as distinguished from grave suspicion, the trial Judge would be empowered to discharge the accused. 17.2. The trial Judge is not a mere post office to frame the charge at the instance of the prosecution. 17.3. The Judge has merely to sift the evidence in order to find out w....
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....ion without the payment of excise duty by asserting that an act of galvanisation does not attract excise duty. However, these facts were not prima facie proved. 20. Nitin Wapa (CW1) stated that an excise duty and a penalty of Rs. 12,00,00,000/- (twelve crore) was payable. He proved the various orders passed by the various authorities under the Excise Act. He admitted in his cross-examination that he had never dealt with the present case. 21. Jodh Singh (CW2) stated in his cross-examination that he had never handled the matter before making the statement on oath, and his statement was based on the record inspected by him 22. It is apparent from the cross-examination of Jodh Singh (CW2) that he had no personal knowledge about the evasion of the excise duty, and whatever he deposed, he had deposed based on the record. The complainant failed to produce the record before the Court, and the testimony of this witness regarding the information derived from the record is inadmissible [Murarka Properties (P) Ltd. v. Beharilal Murarka, (1978) 1 SCC 109]. 23. Umesh Gupta (CW3) proved the show-cause notice order passed by the authorities. He did not say anything about the evasion. H....