Delhi District Court
M/S Freezair India (P) Ltd vs Commissioner Of Central Excise on 6 February, 2016
IN THE COURT OF SH. REETESH SINGH, ASJ-02/FTC
NEW DELHI DISTRICT PATIALA HOUSE COURTS, DELHI
Crl. Revision No. 31 of 2015
I.D. No 02403R0073022015
1. M/s Freezair India (P) Ltd.
CB-382/10, Indira Market,
Ring Road Naraina.
Through its Director
Shri Narender Singh Punn
2. Shri Narender Singh Punn
Resident of 6/5 South Patel Nagar,
New Delhi.
.......Petitioners
Versus
Commissioner of Central Excise
......... Respondent
Date of institution of the revision petition : 25.04.2015
Date of reservation of orders : 03.02.2016
Date of announcement of orders : 06.02.2016
ORDER
1. This revision petition has been filed by the petitioners / accused persons under Section 397 of the Cr. P.C against the impugned order dated 12.01.2015 by which the Ld. Trial Court dismissed their application for discharge.
2. Before this Court Sh.V. Madhukar, counsel for the petitioners has made only one submission. He argued that the respondent / complainant has sought to prosecute the petitioners for the offences under sections 9A and 9 AA of the Central Excise Act, 1944 for alleged evasion of excise duty amounting to Rs. 10,04,895/- for the financial year 1998-99. He placed reliance on a circular dated 12.12.1997 bearing letter No. F No. 208/31/97-CX.6, as per which the Central Board of Excise and Customs (CBEC) had increased the monetary limit for prosecution of evasion of M/s Freezair India (P) Ltd. & Anr. vs. Commr. of Central Excise CR No. 31 of 2015 1/4 excise duty from Rs. 5,00,000/- to Rs. 25,00,000/-. He submitted that respondent / complainant was bound by the circular issued by the CBEC and it could not have instituted any prosecution against the petitioners as the allegations against them are of evasion of excise duty of Rs. 10,04,895/- which was less than the monetary limit of Rs. 25,00,000/-. He further submitted that the Ld. Trial Court while rejecting the application for discharge placed reliance of a subsequent circular of the CBEC dated 15.06.2007 under which it was explained that the monetary limit fixed in the previous circular dated 12.12.1997 would not apply to persons who were habitual offenders. He submitted that there is nothing on the record placed by the respondent / complainant to even suggest that the petitioners were habitual offenders. He submitted that even if the circular dated 15.06.2007 were to apply, it would have prospective effect and could not be applied retrospectively.
3. Reply to this revision petition has been filed by the respondent / complainant. Sh. Satish Aggarwala, Counsel for the respondent / complainant did not dispute the proposition that the CBEC is bound by its own circulars but submitted that submitted that the Ld. Trial Court had rightly rejected the application for discharge and that the impugned order did not call for any interference.
4. I have heard the counsel for the parties and have perused the record of this case.
5. The basic contention of the petitioners is that since the alleged evasion of excise duty was less than Rs.25,00,000/- for the financial year 1998-99, this prosecution could not have been launched by the respondent / complainant as it was bound by the circular of the board dated 12.12.1997.
6. The petitioners are being prosecuted for having committed M/s Freezair India (P) Ltd. & Anr. vs. Commr. of Central Excise CR No. 31 of 2015 2/4 the offences as laid down under sections 9 and 9 AA of the Central Excise Act 1944. The provisions of the same reads as under:-
"9. Offences and penalties (1) Whoever commits any of the following offences, namely,-
(a) contravenes any of the provisions of section 8 or of a rule made under clause (iii) or clause (xxvii) of sub-section (2) of section 37;
(b) evades the payment of any duty payable
under this Act;"
"9AA. Offences by companies
(1) Where an offence under this Act has been
committed by a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly."
7. Sections 9 and 9 AA of the Central Excise Act do not lay down any monetary limit for launching of prosecution for the offences prescribed therein. The circular of the CBEC dated 12.12.1997 however provides for a monetary limit for Rs. 25,00,000/- for prosecution of such offences. The complaint was filed by the respondent / complainant in the trial court on 25.09.2012. The Ld. Trial Court by order dated 11.10.2012 found sufficient ground to proceed against the petitioners for having committed the offences punishable under the provisions of the said Act. The question which arises for consideration, in the opinion of this Court, is whether a Court once having taken cognizance of the offences under sections 9 and 9AA of the said Act and having summoned the accused persons will have the power to discharge the accused persons on the ground that the circular of the Board dated 12.12.1997 did not permit their prosecution. This has to be considered in the context that no monetary limit has been fixed for prosecution for offences committed under sections 9 and 9 AA of the said Act.
8. A circular of a Board / Statutory Authority cannot supersede a M/s Freezair India (P) Ltd. & Anr. vs. Commr. of Central Excise CR No. 31 of 2015 3/4 legislative enactment. There is nothing in sections 9 and 9 AA of the Act which empowers the CBEC, by way of delegated legislation, to lay down any criteria for institution of prosecution for the offences committed under the said provisions. Therefore, unless and until there is an amendment to sections 9 and 9 AA of the Act empowering the CBEC to lay down any monetary limit for institution of prosecution for evasion of excise duty, once an offence falling under the said provisions is brought to the notice of the Court by way of a complaint, the accused persons cannot be discharged on the basis of the said circular of the CBEC.
9. As per the case law relied upon by the petitioners, the circulars issued by the Board are binding on all the authorities including the respondent / complainant. This proposition has not been disputed by Sh. Satish Aggarwala appearing for the respondent / complainant. However a Court before which any action is brought regarding infringement of the provisions of sections 9 and 9AA of the Act will have to consider the matter from the perspective of the legislative enactment. It cannot discharge a person accused of committing the said offence without there being any classification laid down in the penal statute itself. It may be that the petitioners / accused persons may have a case to have the proceedings quashed on the ground that the institution of the complaint was in violation of the own circular of the CBEC which was binding on all authorities including the complainant. However, the said power is not available with this Court.
10. For the reasons recorded above, I am not inclined to interfere with the impugned order. There is no merit and the revision is dismissed. TCR along with copy of this order be sent back to the Ld. Trial Court. Revision file be consigned to record room.
Announced in the open Court (REETESH SINGH)
on 6th February, 2016 ASJ-02/FTC, PHC/NDD
06.02.2016
M/s Freezair India (P) Ltd. & Anr. vs. Commr. of Central Excise CR No. 31 of 2015 4/4