Patna High Court
Itc Limited, Through Its Branch Manager ... vs The Union Of India & Ors on 24 July, 2018
Equivalent citations: AIRONLINE 2018 PAT 586
Author: Sanjay Priya
Bench: Sanjay Priya
IN THE HIGH COURT OF JUDICATURE AT PATNA
Criminal Miscellaneous No.28387 of 2015
Arising Out of PS.Case No. -303 Year- 1998 Thana -GOVERNM ENT OFFICIAL COM P. District-
PATNA
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1. ITC Limited, Registered Office at 37, Jawaharlal Nehru Road, Kolkata - 700
071 and having its Factory at P.O. Basdeopur, P.S. Kotwali, District - Munger -
811202, through its Branch Manager and Constituted Attorney Mr. R. Shya m
Krishnan
.... .... Petitioner/s
Versus
1. The Union of India.
2. The State of Bihar.
3. The Assistant Commissioner of Central Excise, Bhagalpur Division, Bhagalpur.
.... .... Opposite Party/s
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Appearance :
For the Petitioner/s : Mr. Rohitabh Das, Advocate
Mr. Pravin Kumar Sinha, Advocate
For the State : Mr. Nawal Kishore Prasad, Advocate
For the Union of India : Mr. Anshay Bahadur Mathur, Advocate
For the EOU : Mr. Akhileshwar Pd. Singh, Sr. Advocate with
Mr. Vijay Anand, Advocate
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CORAM: HONOURABLE MR. JUSTICE SANJAY PRIYA
CAV JUDGMENT
Date: 24-07-2018
This application under Section 482 of the Code of
Criminal Procedure has been filed for quashing entire proceeding of
Complaint Case No.303-C of 1998 pending before the Special Judge
(Economic Offences), Patna, for the alleged commission of the
offences punishable under Section 9 and 9AA of the Central Excise
Act, 1944.
2. Basis of the present complaint case is the demand
of central excise duty confirmed by the Adjudicating Authority vide
order in Original Case No.03/95 dated 29.12.1995, alleging therein
commission of offence under Section 9 and 9AA of the Central
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Excise Act, 1944, (for short the 'Act') by this Petitioner amounting
to evasion of payment of duty, removal of excisable goods in
contravention of the provision of the Act and the Rules made
thereunder and failure to supply the information as required by the
Rules and giving false information.
3. In accordance with Rules, show cause notice was
issued proposing recovery of central excise short duty paid and
imposition of penalty. In the present case, for the period, in question,
the Adjudicating Authority (Commissioner of Central Excise, Delhi)
has imposed penalty amounting to Rs.7 crores against accused
Company and Rs.3.15 crores against the Directors, Accused Nos.2 to
7, and the matter is, now, pending before the CEGAT in appellate
stage.
4. It is mentioned in the complaint that as per the
said scheme of the Act, in addition to the adjudicating proceedings,
offence committed under Section 9 & 9AA of the Act also amounts
to criminal offence, punishable with imprisonment and also fine and
cognizable by the Court. The offence relates to period 1983 to 1987.
5. Counsel for the petitioner has submitted basis of
the present case being the demand of central excise duty confirmed
by the Adjudicating Authority vide order in Original Case No.03/95
dated 29.12.1995, alleging offence under Section 9 and 9AA of the
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Central Excise Act, 1944, is completely eroded and effaced by the
judgment and order dated 10.09.2004 of the Hon'ble Supreme Court
in ITC Limited Vs CCE, New Delhi and anr. Reported in (2004) 7
SCC 591. Similar complaint cases arising out of the aforesaid order
in Original filed in the Courts in Bengaluru and Kolkata have been
quashed by Hon'ble High Court of Karnataka at Bengaluru by its
order dated 13.04.2005 and 09.01.2008 respectively and by the
Hon'ble Calcutta High Court by its order dated 13.12.2013, on the
basis of aforesaid judgment and order of Hon'ble Supreme Court.
True copy of the aforesaid judgment and order of the Hon'ble
Supreme Court, Karnataka High Court at Bengaluru and Calcutta
High Court are annexed as Annexure-1 series.
6. Counsel for the petitioner further submits that as
on date, the demand of the Department having been effaced by the
judgment of Hon'ble Supreme court, continuance of the proceedings
is unwarranted and even otherwise does not have sanction of law and
amounts to an abuse of process of Court. Counsel for the petitioner
has relied on the decision of the Hon'ble Supreme Court in the case
of Uttam Chand and ors. Vs. ITO reported in (1982) 2 SCC 543, in
which it has been held that if the core allegations made against the
assessee are set aside in the departmental proceedings, the criminal
complaint based on the same allegations should be quashed. In
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another decision of the Hon'ble Supreme Court in the case of
Radheshyam Kejriwal Vs. State of West Bengal and another
reported in (2011) 3 SCC 581, it has been held that in case it is found
on merit that there is no contravention of the provisions of the Act in
the adjudication proceedings, the trial of the person concerned shall
be an abuse of the process of the Court. Further submission is that
aforesaid principles have also been accepted by the Central Board of
Excise and Customs and based on these principles it has issued a
circular No.998/5/2015-CX dated 28.02.2015 directing withdrawal
of prosecutions where on identical allegation the assessee had been
exonerated in adjudication proceedings. Copy of the aforesaid
circular has been annexed as Annexure-3. Learned counsel for the
petitioner has finally submitted that the petitioner-Company or the
individuals accused ought not to be made to suffer and face the
rigors of criminal trial when the same cannot be sustained in the eye
of law in view of conclusive findings of the Hon'ble Supreme Court.
7. Counsel for the Union of India was directed by
order dated 26.04.2018 to seek instructions as to whether any step
has been taken in the Court below for withdrawing the case or not,
but no such instruction was received by the counsel for the Union of
India on the date of argument in this case. Therefore, this case was
heard on merit and judgment was reserved.
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8. This Court after looking into the complaint filed
by the Complainant, namely, Mr. M. K. Srivastava, Assistant
Commissioner, Central Excise, Division- Bhagalpur, find that
present complaint has been filed under Section 9 & 9AA of the
Central Excise Act, 1944, for evasion of payment of duty, removal of
excisable goods in contravention of the provision of the Act and the
Rules made thereunder and failure to supply the information as
required by the Rules and giving false information. In accordance
with Rules, show cause notice was issued proposing recovery of
central excise duty short paid and imposition of penalty. In the
present case, for the period, in question, (1983 to 1987) the
Adjudicating Authority (Commissioner of Central Excise, Delhi) has
imposed penalty amounting to Rs.7 crores against accused-Company
and Rs.3.15 crores against the Directors, Accused Nos.2 to 7, and the
matter is pending before the CEGAT in appellate stage. As per said
scheme of the Act, in addition to the adjudicating proceedings,
offence committed under Section 9 & 9AA of the Act also amounts
to criminal offence punishable with imprisonment and also fine and
cognizable by the Court.
9. It is admitted position in this case that genesis of
the present complaint is the order in Original Case No.3/95 passed
by the Commissioner of Central Excise, New Delhi, dated
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29.12.1995, which confirmed demands for differential excise duty made on the Petitioner-Company vide show cause notice dated 27.03.1987 and levied penalty on the Petitioner-Company and the individual accused. The said order in original dated 29.12.1995 stood set aside by the CEGAT vide its judgment dated 04.09.1998. The aforesaid order in so far as it set aside imposition of penalty on the Directors has since become final inter parties upon dismissal of Department's appeal by order of the Hon'ble Supreme Court dated 15.01.1999, and in so far as order of CEGAT remanding the matter for a fresh adjudication, the same stands set aside and all demands against the Petitioner-Company was set aside by the final judgment and order dated 10.09.2004 of the Hon'ble Supreme Court reported in (2004) 7 SCC 591. Central Board of Excise and Customs based on the principles decided by Hon'ble Supreme Court has issued a circular No.998/5/2015-CX dated 28.02.2015 directing withdrawal of prosecutions where on identical allegation the assessee had been exonerated in adjudication proceedings (Anneuxre-3).
10. In the instant case, Union of India was asked to seek instructions as to whether any such withdrawal petition has been filed on behalf of the Department in terms of the aforesaid circular, but no instruction has been received by the Union of India.
11. Counsel for the petitioner has submitted that Patna High Court Cr.M isc. No.28387 of 2015 dt.24-07-2018 7/8 similar complaint cases arising out of the order in Original No.03/95 dated 29.12.1995 were filed in the Courts in Bengaluru and Kolkata and have been quashed by Hon'ble High Court of Karnataka at Bengaluru by its order dated 13.04.2005 and 09.01.2008 respectively and by the Hon'ble Calcutta High Court by its order dated 13.12.2013, on the basis of aforesaid judgment and order of Hon'ble Supreme Court. The judgment passed by Hon'ble Supreme Court as well Karnataka High Court at Bengaluru and Calcutta High Court are annexed as Annexure-1 series.
12. This Court after looking into the judgment of the Hon'ble Supreme Court passed in the case of ITC Limited Vs CCE, New Delhi and anr. reported in (2004) 7 SCC 591 finds that Hon'ble Supreme Court has set aside all the demands raised against the petitioner by the department.
13. Pursuant to judgment of Hon'ble Supreme Court exonerating and setting aside all demands, the individual accused in the present complaint filed discharge application under Section 245(2) Cr. P. C. before the Court of the Special Judge (Economic Offences), Patna, seeking discharge from the present complaint.
14. A report was called for from the Court below about the present stage of the case, which has been received. It is submitted in the report that case is pending for hearing on the Patna High Court Cr.M isc. No.28387 of 2015 dt.24-07-2018 8/8 petition under Section 245 (2) Cr. P. C. filed on behalf of the petitioner.
15. This Court finds that when in terms of aforesaid judgment the Hon'ble Supreme Court has exonerated and set aside all the demands against the Petitioner, the very foundation on which the present complaint has been filed is set at naught by the authoritative pronouncement of Hon'ble Supreme Court and no demand survives in this matter.
16. In such circumstances, continuance of the criminal proceeding against the Petitioner in terms of order passed in Original Case No.03/95 dated 29.12.1995 will amount to abuse of process of the Court and mere harassment to the petitioner.
17. Therefore, entire proceeding of Complaint Case No.303-C of 1998 pending before the Special Judge (Economic Offences), Patna, launched against the petitioner on the basis of order in Original Case No.03/95 dated 29.12.1995 is hereby quashed.
18. This application is, accordingly, allowed.
(Sanjay Priya, J) J.Alam/-
AFR/NAFR AFR CAV DATE 08-05-2018 Uploading Date 25-07-2018 Transmission 25-07-2018 Date