Karnataka High Court
The Deputy Commissioner Of Central ... vs M/S Nanavathy Engineering Co (P) Ltd on 29 July, 2013
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Crl.A.1126/2011
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 29TH DAY OF JULY, 2013
BEFORE
THE HON'BLE MR.JUSTICE A.S.PACHHAPURE
CRIMINAL APPEAL No.1126/2011
BETWEEN:
THE DEPUTY COMMISSIONER OF
CENTRAL EXCISE (LEGAL)
OFFICE OF THE COMMISSIONER OF
CENTRAL EXCISE,
BANGALORE-II COMMISSIONERATE
P.B. NO.5400, C R BUILDING
QUEENS ROAD, BANGALORE-560 001.
... APPELLANT
(BY SRI. Y HARIPRASAD, ADV.)
AND:
1. M/S. NANAVATHY ENGINEERING CO.(P) LTD.,
NO.A-195, 4TH CROSS,
PEENYA INDUSTRIAL AREA,
1ST STAGE, BANGALORE.
REPRESENTED BY ITS DIRECTOR
SHRI. B.C. NANAVATHY.
2. B.C. NANAVATHY,
DIRECTOR,
M/S. NANAVATHY ENGINEERNG CO.(P) LTD.,
NO.A-195, 4TH CROSS,
PEENYA INDUSTRIAL ESTATE,
1ST STAGE, BANGALORE.
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Crl.A.1126/2011
3. WG.CDR. M. PEEROJI RAO,
DIRECTOR (CO-ORDINATION),
NO.A-195, 4TH CROSS,
PEENYA INDUSTRIAL ESTATE,
1ST STAGE, BANGALORE.
4. C.M. THIMMEGOWDA,
PRODUCTION MANAGER,
M/S. NANAVATHY ENGINEERNG CO.(P) LTD.,
NO.A-195, 4TH CROSS,
PEENYA INDUSTRIAL ESTATE,
1ST STAGE, BANGALORE.
... RESPONDENTS
(BY SRI. P.R. SRINIVASAN, S. KASHINATH,
B.S. RAGHUNATHA, & CHANDRASHEKARAN, ADVS.,
FOR R1 TO 3)
THIS CRL.A FILED U/S.378(4) CR.P.C. PRAYING
TO SET ASIDE THE JUDGMENT OF ACQUITTAL
DT.31.12.2009 PASSED BY THE P.O. SPL. COURT FOR
ECONOMIC OFFENCES, BANGALORE IN C.C. NO.468/2002 -
ACQUITTING THE RESPONDENTS/ACCUSED FOR THE OFFENCE
P/U/S.9(1)(b), 9(1)(bb), 9(1)(c) & 9AA P/U/S.
9(1)(i) OF THE CENTRAL EXCISE ACT.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Though this matter is posted for admission, with consent of the learned counsel for both the parties, the matter is taken up for final disposal. -3- Crl.A.1126/2011
2. The appellant has challenged the judgment and order acquitting the respondents for the charge under Sections 9(1)(b), 9(1)(bb), 9(1)(c) and 9AA punishable under Section 9(1)(i) of the Central Excise Act on a trial held by the Court of Economic Offences, Bangalore.
3. The facts relevant for the purpose of this appeal are as under;
The respondent No.1 - Company is a manufacturer of Shoe Adhesive Gum, whereas, the other respondents are its Directors and Drawing Manager. On the allegation that the respondents have not paid the excise duty in respect of the sales made for the year from 1990 to 1995, an enquiry was held and in the said enquiry documents were collected for recording the statements of PWs.4 and 5 and it is alleged that a fine of Rs.5,00,000/- was ordered. The appellant Deputy Commissioner for Central Excise has filed a private complaint under Section 200 Cr.P.C. to initiate -4- Crl.A.1126/2011 action against the respondent for the aforesaid offence.
During the trial the complainant examined PWs.1 to 5 and got marked the documents Exs.P1 to P19 and on closure of the evidence the statements of the respondents were recorded under Section 313 Cr.P.C. No defence evidence was led. The trial Court after hearing the counsel for the parties and on appreciation of the material on record, acquitted the respondents of the said charges. Aggrieved by the judgment and order of acquittal, the present appeal is filed by the Central Excise Department through its Deputy Commissioner.
4. I have heard the learned counsel for both the parties.
5. It is the contention of the learned counsel for the appellant that Company is not a necessary party to the proceedings for the foresaid offences and therefore he contends that the acquittal order -5- Crl.A.1126/2011 granted on the said ground is improper and illegal. So also he contends that Ex.P14 is the audit report which was accepted by the trial Court in evidence and the contents of the audit report reveals non- payment of the excise duty and therefore it is his submission that the trial Court committed error in not accepting the said report in awarding conviction. It is his contention that the documents have not been disputed in the course of the trial and that this Court cannot draw adverse inference for non-production of the documents. On these grounds he has sought for setting aside the impugned order.
6. The learned counsel for the respondent has supported the judgment and order of the trial Court and it is his specific submission that except the invoices, there is no material on record to prove the sale of Shoe Adhesive Gum by the respondents and in the absence of any material, the trial Court was justified in granting the order of acquittal. -6- Crl.A.1126/2011
7. It is not in dispute that the respondents are the persons who are manufacturing Shoe Adhesive Gum and it is the case of the appellant that for the period from 1990 to 1995 the respondents have not paid the excise duty and therefore are responsible for non-payment and the conviction could have been granted.
8. It is relevant to note that to prove the fact regarding non-payment of excise duty for the aforesaid period, the complainant relies upon Ex.P14- an audit report wherein it is claimed by the appellant that the Auditor went to the office of the respondents and after auditing the records had prepared the report Ex.P14, but the Author of the document is not examined to prove Ex.P14, therefore, the trial Court did not rely upon the report Ex.P14 which appears to be just and proper. Apart from Ex.P14, there are photocopy of invoices which have been made available on record at Exs.P5, P7, P9 and P11 to prove the sale and the -7- Crl.A.1126/2011 manufacture of Shoe Adhesive Gum by respondents to PWs.4 and 5. Rather it is relevant to note that the original invoices have not been produced. At-least at the time of enquiry the authorities of the appellant could have collected the invoices to prove the sale of the aforesaid goods either to PWs.4 and 5 or to any other person. But no such effort has been made by the complainant in collecting the original invoices. It is well principle of law that the Xerox copy of the documents is not admissible and it is even not a secondary evidence. On this aspect of the matter the learned counsel for the appellant has placed reliance on the decision of the Apex Court in the case of SHALIMAR CHEMICAL WORKS LIMITED Vs. SURENDRA OIL AND DAL MILLS (REFINERIES) AND OTHERS reported in (2010) 8 Supreme Court Cases 423. The Apex Court having taken into consideration the production of Photocopy of the documents has held that, it should have been rejected in the beginning -8- Crl.A.1126/2011 itself. It is relevant to note that even during the course of accepting the document, the objections were raised by the respondents and these invoices were accepted subject to production of original. No effort has been made by the appellant even to produce the originals. In the course of trial or subsequent to the trial, originals have not produced by the respondents. So, apart from Ex.P14 and the invoices aforesaid, there is no other material on record to establish that the respondents have sold Shoe Adhesive Gum for the period from 1990 to 1995 and it is for this reason that the trial Court has granted an order of acquittal. On the basis of the audit report fine was collected and the order collecting the fine was confirmed by this Court and therefore it is his submission that the audit report itself could have been a base for awarding conviction. The fact that the audit report was accepted in the enquiry itself is in dispute. Apart from that there is no material -9- Crl.A.1126/2011 placed on record to establish that the audit report was produced in enquiry or that it was base for awarding fine. That part the proceedings of recovery of fine is all together different from the proceedings for conviction of the accused under the provisions aforesaid.
9. In the absence of proof of contents of Ex.P14, the mere fact that the order of fine was confirmed by this Court, will not be a good ground for conviction of the respondents for the aforesaid charges. Viewed from any angle, the judgment and order of acquittal cannot be interfered with.
10. Though it is contended that the Company itself is not a necessary party, on this aspect of the matter the counsel has placed reliance on the decision in the proceedings under Section 138 of N.I. Act reported in (2007)5 Supreme Court Cases 103 in the case of RAGHU LAKSHMINARAYANAN Vs. FINE TUBES. Even accepting the principle laid down by -10- Crl.A.1126/2011 the Apex Court, the non-arraigning the Company as an accused itself would not be a ground to allow this appeal.
11. The trial Court has not drawn adverse inference for producing the Xerox copies. On this aspect of the matter, the counsel has placed reliance on the decision reported in (1991)1 Supreme Court Cases 343 in the case of BHOOLCHAND AND ANOTEHR Vs. KAY PEE CEE INVESTMENTS AND ANOTHER. The principle aforesaid relies to non- production of the document and not in respect of the photocopy of the document. Therefore, the principle is not applicable.
12. This is an appeal against the judgment and order of acquittal. The Appellate Court will be slow in interfering the with such orders. Even if a second view is possible, the one accepted by the trial Court cannot be disturbed. Perusal of the material placed on record in the context of the -11- Crl.A.1126/2011 principle referred to supra, I am of the opinion that the appellant has not made out any grounds to warrant interference in the acquittal order passed by the trial Court.
In the result, the appeal fails and it is dismissed.
Sd/-
JUDGE ap/-