Custom, Excise & Service Tax Tribunal
Banjara Cements Ltd vs Hyderabad-Iv on 11 September, 2018
Appeal Nos. E/56 & 57/2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench - SMB
Court - I
Appeal No. E/56/2011
(Arising out of Order-in-Appeal No. 76 & 77/2010 (T) CE dated
30.09.2010 passed by Commissioner of Customs, Central Excise &
Service Tax (Appeals), Guntur)
Banjara Cements Limited .....Appellant(s)
Vs.
Commissioner of Customs, Central Excise
& Service Tax, Tirupati .....Respondent(s)
Appeal No. E/57/2011 (Arising out of Order-in-Appeal No. 76 & 77/2010 (T) CE dated 30.09.2010 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Guntur) M.M. Reddy, Managing Director Banjara Cements Limited .....Appellant(s) Vs. Commissioner of Customs, Central Excise & Service Tax, Tirupati .....Respondent(s) Appearance Shri V.J. Sankaram, Advocate for the Appellant.
Ms B. V. Siva Naga Kumari, Commissioner (AR) for the Respondent. Coram:
Hon'ble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Date of Hearing: 13/08/2018 Date of Decision: 11/09/2018 1 Appeal Nos. E/56 & 57/2011 FINAL ORDER No. A/31149-31150/2018 [Order per: M.V. Ravindran] These two appeals are directed against Orders-in-Appeal No. 76 & 77/2010 (T) CE dated 30.09.2010. As both these appeals are inter connected, they are being disposed of by a common order. Appeal No. E/56/2011, Banjara Cements Ltd., as filed an appeal against the confirmation of the demands raised with interest and also imposing penalty, Appeal No. E/57/2011, Shri M.M. Reddy the individual is filed against the penalty imposed on in as a Managing Director of Banjara Cements Limited (herein after referred to as the assessee).
2. Brief facts of the case are, the appellants are engaged in the manufacture of cement falling under Chapter heading No. 2502.29 and paying duty at concessional rate under notification No. 5/98 CE, dt. 02.06.98. Based on intelligence that the unit was indulging in clandestine manufacture and removal of cement, without payment of excise duty, the departmental officers searched the factory premises in the presence of independent witnesses on 03.11.98, verified the physical stock, found 549 nos. of HDPE bags short and also found 20,450 HDPE bags stored in separate room, as they were not accounted for in the records of the factory, the officers have seized them under a Mahazar and deposited with the appellants 2 Appeal Nos. E/56 & 57/2011 under a proper undertaking. The officers from Hqrs. Anti- Evasion simultaneously searched the registered office of the appellants and residence of the Managing Director and recovered excise/private records for scrutiny. The officers also found shortage of cement in silos when compared with the factory records. Two files containing details of cement manufactured & removed were recovered from the registered office and residence. The papers containing details of bags purchased (with bills and without bills), were also recovered by the excise officers from the personal briefcase of the M.D. The scrutiny of the records for the period 97-98 revealed that the appellants had suppressed manufacture of cement to the tune of 4852.69 MT and duty payable @ of Rs. 200 - per M.T., worked out at Rs. 9,70,538/-. The clandestine manufacture and removal was corroborated through recovery of slips from the residence of the M.D. and supply of raw material by M/s EID Parry (I) Ltd., and M/s Fertilisers and Chemicals Travancore Ltd., and the statements in Annexure-IV showing receipt and non-accountal of gypsum in Form IV register. The Managing Director of the unit was arrested on 09.11.98.
2.1 During 98-99, the quantity of cement manufactured and removed clandestinely based on slips, records/gypsum account etc., was arrived at 3760 MTs and duty payable @ Rs. 200/- PMT was worked out at Rs. 7,53,600/-. The receipt of HDPE bags to the extent of 46,355 bags from M/s Revathi Sacks (P) Ltd., and 25,000 Nos. 3
Appeal Nos. E/56 & 57/2011 from Ms Nallamala Polythene Bags (P) Ltd., during 98-99, was not accounted for in the statutory records. The same were used for removal of cement without payment of excise duty. Therefore show cause notice was issued to the appellants as to why
i) Central Excise duty totalling to Rs. 17,24,138/- (Rs. 970538 and Rs. 7,53,600/- for 97-98 and 98-99, respectively) should not be demanded from them under rule 9(2) of Central Excise Rules, 1944, read with Section 11A of Central Excise Act, 1944,
ii) Amount of Rs. 21,437/- being duty on the goods removed without payment of duty, should not be demanded,
iii) Penalty equal to the duty amount should not be imposed under Section 11AC of the Act,
iv) Interest at the rate of 20% should not be demanded under Section 11AB of the Act,
v) Penalty under rule 173 Q of CE Rules, should not be imposed,
vi) Penalty on Sri MM. Reddy, M.D. of the company, should not be imposed under rule 209 A of C.E. Rules, 1944,
vii) 20,450 nos. of unaccounted bags found in the factory should not be confiscated under rule 173Q of CE Rules, 1944. 2.2 After going through the reply of the appellants, the Additional Commissioner, Hyderabad - II Commissionerate ordered for confiscation of 20,450 Nos. of PP bags, confirmed the demand of Rs. 17,24,1387- for the year 97-98, and 98-99, demanded interest under Section 11AB of the Act, imposed a penalty equal to the duty 4 Appeal Nos. E/56 & 57/2011 amount demanded (i.e. Rs. 17,24,138/-) under Section 11AC of the Act, imposed penalty of Rs. 10,00,000/- under Rule 173Q of CH Rules, and imposed personal penalty of Rs. 5,00,000/- on the MD Sri M.M. Reddy under Rule 209 A of CE Rules. Being aggrieved with the said order the appellants have filed these appeals. The appellants and the MD vide the statement of facts and grounds of appeal dt. 28.05.2001 have contended that the proceedings are based on presumptions and they requested to drop the proceedings. They have stated that shortage of gypsum had occurred because of evaporation and handling losses and transporting the goods without packing. The gypsum also contained moisture. Regarding non- accountal of HDPE / PP bags, it was explained that the bags were purchased from middlemen and the difference noticed by the department was on account of repeating the figures. The difference was also on account of non-accountal of rejected bags.
3. Aggrieved by such an order, the appeal was preferred to the First Appellate Authority. The First Appellate Authority upheld the orders of the Adjudicating Authority. Challenge to such an order before the Tribunal, culminated in the matter being remanded, the First Appellate Authority by the impugned order in these appeals following due process of law, and upheld the Order-in-Original.
4. Learned Counsel after taking the Bench through entire case records, submits that the case of the Revenue is based upon 5 Appeal Nos. E/56 & 57/2011 physical verification of the finished goods and found short and 549 nos. of HDPE Bags, found short and unaccounted 20,450 HDPE bags stored in a separate room and also the shortage of one of the raw materials i.e. Gypsum and some slips which were recovered from the briefcase of the Managing Director. He would submit on merits the Revenue's case is weak as non-accounting of HDPE Bags and raw materials of (one of the raw materials) in itself cannot be considered as clandestine manufacturing and clearing of the finished goods i.e. cement. Be that as it may, Revenue Authorities had launched a prosecution against very same appellants before the court of Special Judge for Economic Offences at Hyderabad and the said prosecution was launched by the officer of the Commissioner of Customs, Central Excise & Service Tax, Tirupati - Commissionerate. He would draw the attention of the Bench to the judgment of the Special Judge for Economic Offences on 12th January, 2010 and submits that the evidences relied upon by the prosecution for launching a prosecution against the same appellants for same evidence which before the Lower Authorities and before the First Appellate Authority in the impugned order; that the Hon'ble Special Judge for Economic Offences, Hyderabad has come to a categorical findings that there is no evidence to convict the accused no material is found on record incriminating the accused in the offences for prosecution under Section 9 of Central Excise Act, 1944. He would read extensively from the said judgment of the Special Judge for Economic Offences, Hyderabad. It is his further submission that this 6 Appeal Nos. E/56 & 57/2011 judgment was placed before the First Appellate Authority but was brushed aside them any findings. He submits that the judgment of Hon'ble High Court of Madras in the case of Commissioner of Customs (Import), Chennai Vs. A. Mohammed [2009 (234) ELT 632 (Mad.)] would apply in its full force in the case in hand. He prays for allowing the appeals.
5. Learned Departmental Representative, on the other hand, draws the attention of the court to the findings recorded by the Adjudicating Authority as well as the First Appellate Authority. After drawing my attention to the findings, she submits that there is evidence to show that the slips recovered by the officers are indicating of clandestine removal of cement and said slips are duly signed by the authorised persons of the assessee. It is her submission that the authorised persons of the company accepted the contents of the slips to be true and correct in the statements recorded by the officers. It is here submission that appellant has not been able to explain the expenses of unaccounted HDPE Bags, shortage of cement and the shortage of Gypsum and unaccounted procurement of raw materials like limestone, clinkers etc. It is her submission that the Revenue had recorded supplier of HDPE Bags who had stated that they were selling HDPE Bags to appellants sometimes by raising bills and sometimes without bills. It is her submission that all these evidences were appreciated by the First Appellate Authority and a correct view has been taken. She relied upon the decision of the 7 Appeal Nos. E/56 & 57/2011 Apex Court in the case of Commissioner of Central Excise, Mumbai Vs. Kalvert Foods India Pvt. Ltd., [2011-TIOL-76-SC- CX] for the proposition that statements recorded and made by the Managing Director of the Company and other persons should be relied upon and clandestine removal of the excise goods has to be held in favour of the Revenue; she would also relied upon the judgment of the Hon'ble High Court of Gujarat in the case of Commissioner of Central Excise, Surat - I Vs. Neminath Fabrics Pvt. Ltd., [2010 (256) ELT 369 (Guj.)] for the proposition that once shortage and clandestine removal admitted by the director, demands need to be confirmed.
6. I have considered the submissions made by both sides and perused the records.
7. The Revenue Authorities are relying upon the various evidences like recovery of slips, shortage of raw materials, shortage of finished goods, unaccounted HDPE bags found during their visit and various statements recorded as also recovery of slips from the briefcase of the Managing Director of the assessee and the statements of the suppliers for supplying the goods to the assessee sometimes on cash and sometimes after the bills, to conclude that there was manufacturing clandestine removal from the finished goods i.e. cement. I notice that the very same evidences were lead by the Revenue in the prosecution launched against the assessee and the appellant Shri M.M. Reddy, Managing Director in the court of Special 8 Appeal Nos. E/56 & 57/2011 Judge for Economic Offences. I find that in the said judgment of Hon'ble Special Judge appreciated the entire evidences on which reliance was placed for launching prosecution, consequent to the Order-in-Original being passed confirming the demands and the interest and the penalties imposed. The relevant paragraphs of the judgment of the Special Judge for Economic Offences and from material in proof to decide the issue in favour of the prosecution, which I reproduce:
"The show cause notice was adjudicated by the adjudicating authority, confirming the duties and the penalty levied on the accused. Thus A.1 company and A.2. entered into a criminal conspiracy to commit the offence punishable under Sections 9(1), 52A, 53, 54,174G and 226 of Central Excise Rules and liable for punishment under Sections 9(1) (b), 9(1)(bb) of Central Excise Act, 1944.
5. Based on the arguments and the material on record, the following points are framed for determination by this court:
1) Whether the offences alleged against the accused punishable under Sections 9(1)(b) and 9(1)(bb) of Central Excise Act are proved by the prosecution beyond all reasonable doubt.
2) To what result.
6. ...................
25. The evidence of the prosecution discussed above, absolutely brings forth no material incriminating the accused in the alleged offence. As rightly argued, unless the accused is proved to have clandestinely removed the material in the bags which were found in his factory premises, no offence under Section 9(1)(b) and 9(1)(bb) can be alleged against him. Attempt to commit the offence under Section 9(1)(b) is also an offence under Section 9(1)(d) which is evasion of payment duty. It being punishable with the same sentence, conviction can be recorded for the same, but unless it is proved that cement was clandestinely removed, clause (b) of Section 9(1)(d) does not get attracted. The liability of the accused to pay duty arises only when goods are manufactured and removed from the specified place. Otherwise it requires proof of mensrea. The case of prosecution is not that the accused has in fact removed the goods. They have only assumed based on the unaccounted for bags found in the premises of A.1 company, that there would have been clandestine removal of goods and evasion of duty. The statement of the accused marked as Ex. P13 referred to one Rama Krishna as his accountant as a person who can explain the statements recovered by the officials. But he was not examined. The statements of the accused do not contain any confessional fact. Moreover they show that the accused gave cogent explanation regarding the bags with bills and without bills. He pleaded ignorance about the source of the bags unbilled. He pleaded ignorance about the slips found in the factory and stated that he came across them during his inspection.
The security guards and Mr. Chandra Sekhar are the persons who could have vouchsafed about how the bags entered the premises. But their statements were not recorded and they were not examined, as witnesses. 9
Appeal Nos. E/56 & 57/2011 Divisional level suppliers were not examined except Mr. Ramakrishna Reddy, who did not state anything incriminating the accused. The person who was referred to by Mr. Chandra Sekhar was not examined. The above failure leaves the prosecution short of prosecuting their case. The cross examination of P.W.2 shows that they did not consider shortage of cement as an incriminating factor. He could not state the quantity of cement in the silo and packed condition as on 23.12.1997. The RG register taken by him is not filed in the court unless which, admittedly the order of the stock cannot be known. He admitted that they did not find any discrepancy in the cement on 03.11.1998 and that the same tallied with the statutory records. He also admitted that the HDPE bags tallied with the book balance, with slight difference. The above evidence would suffice to manifest the perfunctoriness of the investigation. His admission that RG register is essential to understand the details of the unaccounted for bags and the failure to file the said register would leave the accused in a beneficial position.
The accused, during his 313 examination, explained the reasons for the shortage of cement if any. The same were admitted by P.W.4 also. Gypsum is admitted to be a hydroscopic product which has to be dried before it goes for manufacturing process. It is the main ingredient of cement. The weight of gypsum before going for manufacture and at the time of its receipt is admitted to be varying. The accused explained that the department calculated the quantity of cement based on mathematical calculation, that they went to source factories. The difference between their calculated quantity and the quantity declared in the records was presumed to have been removed without paying duty. It is stated that moisture content of 15 to 30% is possible apart from transport losses. The booklet filed by the accused also shows that 15 to 40 of free moisture is contained in the phospogypsum formed in dehydrate process. The evidence of the prosecution witnesses itself probabalises the variation due to the said reasons. The case of the prosecution, as contended, seems to be based on assumptions.
As per the fact as stated in the complaint and as per the evidence of P.W.2, A.1 company received 1290.86 M.T. of gypsum from the suppliers, whereas only 1147.819 M.T. of gypsum was shown in the raw material account (Form IV) and the company also did not account for 39.42 M.T. of gypsum, resulting in non accountal of gypsum to a tune of 182.461 M.Ts. As per the averments of the compliant the consumption of gypsum for manufacture of 1 MT. Of cement is 0.0376 M.T. As per the contention of the accused and the booklet filed by him, there is a possibility of 15 to 30% of reduction in the quantity of gypsum after it is dried up. The cement that could have been manufactured with 182.461 M.Ts. of gypsum is 4852.69 M.Ts. But if the factor of reduction in the quantity of gypsum is taken at the rate of 30% it would come to 399 M.Ts. of gypsum, which is far beyond the shortage that was allegedly unaccounted for. Hence even if the reduction in the quantity of gypsum is taken at the rate of 15% it would come to 199.54 M.Ts. which is also beyond the unaccounted for gypsum. P.W. 4 admitted that the weight of gypsum varries at the points of reception and manufacture. The above discussion would lead to a conclusion that the prosecution did not bring forth sufficient material in proof of the allegations made against the accused. Attempt to evade duty, as already discussed, is not proved in this case and no offence punishable under Sections 9(1)(b) and 9(1)(bb) of Central Excise is made out against accused.
26. Point. No.2:
In the result the accused are acquitted under Section 24891) Cr.P.C. for the offence punishable under Sections 9(1)(b) and 9(1)(bb) and 9(1)(b) R/W Section 9-AA and 9(1)(bb) R/W Section 9 -AA of Central Excise Act, 1944. The bail bonds of the accused shall stands cancelled." 10
Appeal Nos. E/56 & 57/2011 It can be seen from the above reproduced relevant findings of the judgment of the Learned Special Judge for Economic Offences, it is seen that after appreciating entire evidence which is the fulcrum of allegations and the adjudication proceedings against the assessee and Shri M.M. Reddy, the Special Judge acquitted the assessee and Shri M.M. Reddy the offences which are alleged under the provisions of the Section 9 and Section 9 -AA of Central Excise Act, 1944. Against the said judgment, Revenue preferred an appeal before the Hon'ble High Court seeking condonation of delay; Hon'ble High Court dismissed the application for condonation of delay consequently, the appeal also.
8. The Hon'ble Supreme Court in the case of Radheshyam Kejriwal Vs. State of West Bengal [2011 (266) ELT 294 (S.C.)] has laid down that "It is trite that standard of proof required in criminal proceedings is higher than that required before Adjudicating Authority and in .....". Further, their Lordships in paragraph No. 43 also stated as under:
"In our opinion, therefore, the yardstick would be to judge as to whether allegation in the adjudication proceedings as well as proceeding for prosecution is identical and exoneration of the person concerned in the adjudication proceedings is on merits".
Furthermore, in paragraph No. 46, their Lordships held as under:
"46. A learned Single Judge of the Bombay High Court had the occasion to consider this question in a case under the Foreign Exchange 11 Appeal Nos. E/56 & 57/2011 Regulation Act in Criminal Application No. 1070 of 1999 (Hemendra M. Kothari v. Shri W.S. Vaigankar, Assistant Director, Enforcement Directorate (FERA), Govt., of India and State of Maharashtra), decided on 25-4-2007 and on a review of large number of decisions of this Court and other courts it came to the following conclusion :-
It may be noted that in the present case the applicant was "21. exonerated by the Dy. Director of Enforcement, who was adjudicating authority, in the adjudication proceedings. Admittedly that order was not challenged in appeal by the respondent and thus that order has become final. I have already noted the facts and findings of the adjudicating authority in detail. The adjudicating authority had clearly come to the conclusion that there was no material to hold the present applicant guilty for contravention of the provisions of FERA and he was completely exonerated. When in the departmental proceedings before the adjudicating authority, the department could not establish the charges, it is difficult to imagine how the department could prove the same charges before the criminal Court when the standard of proof may be much higher and stringent than the standard of proof required in departmental proceedings."
The Delhi High Court also considered this question arising out of a case under Foreign Exchange Regulation Act, in detail in the case of Sunil Gulati & Anr. v. R.K. Vohra, 145 (2007) DLT 612, and held as follows :-
"In case of converse situation namely where the accused persons are exonerated by the competent authorities/Tribunal in adjudication proceedings, one will have to see the reasons for such exoneration to determine whether these criminal proceedings should still continue. If the exoneration in departmental adjudication is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and the concerned person(s) is/are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious criminal complaint is filed by the departmental authorities alleging violation/contravention of the provisions of the Act on the part of the accused persons. However, if the departmental authorities themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the departmental proceedings that ex facie there is no such violation. The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are identical and the exoneration of the concerned person in the departmental proceedings is on merits holding that there is no contravention of the provisions of any Act."
We respectfully endorse the view taken by the Bombay High Court in the case of Hemendra M. Kothari (supra) and Delhi High Court in Sunil Gulati (supra)."
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Appeal Nos. E/56 & 57/2011 It can be seen from the above reproduced judgment that the law is fairly settled in such situation wherein, the criminal proceedings as well as adjudication proceedings are based upon the same set of evidences and if entails an exoneration by one court, it can be considered to exonerate from other proceedings. It has to be recorded here that in the cases in hand before me, the evidences relied upon by the Revenue in the adjudication proceedings were the same as were relied upon before the Learned Special Judge for Economic Offences.
9. Hon'ble High Court of Madras in the case of Commissioner of Customs (Import), Chennai Vs. A. Mohammed (supra) had an occasion to consider the question as to whether exoneration of accused under Section 239 of Cr. P.C was sufficiently adequate to exonerate the accused in the adjudication proceedings. Their Lordships held as under:
"Against the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, dated 9-11-2006 made in Final Order No. 1059/2006 [2007 (209) E.L.T. 271 (Tribunal)], the Commissioner of Customs (Import) has filed the present Appeal under Section 130(1) of the Customs Act, 1962, by formulating the following substantial questions of law :
(i) Whether the observation of Customs, Excise and Service tax Appellate Tribunal that the order of the Court exonerating an accused under Section 239 of Cr. P.C. was adequate to exonerate the accused in the adjudication proceedings is correct and valid in law, especially when the accused had also participated in the adjudication proceedings? and
(ii) Whether the findings of the Customs, Excise and Service Tax Appellate Tribunal in its Final Order No. 1059 of 2006 dated 9-11-2006 [2007 (209) E.L.T. 271 (Tribunal)] is sustainable on the ground that the first respondent is discharged as not guilty of the offences in the criminal proceedings is enough to set aside the impugned order dated 28-3-2002?13
Appeal Nos. E/56 & 57/2011
2. It is the case of the appellant that based on specific intelligence, the officers of the SIIB detained two containers UACU-295224 and TEXU- 289984-6 at Chennai Port. On examination, the containers were found to contain 7,006 Kgs. of sandalwood logs/billets, 529 Kgs. of sandalwood small rough pieces and 4,20,000 pieces of peacock feathers in respect of the first container, and 6,169 Kgs. of sandalwood logs/billets, 1,467 Kgs. of sandalwood small rough pieces and 238 Kgs. of Mica powder, in respect of the second container bearing No. TEXU-289984-6. The total value of the sandalwood, peacock feathers and mica powder in both the containers were estimated to be Rs. 64,27,750/-, Rs. 16,80,000/- and Rs. 3,570/- respectively. The goods were seized under Mahazar on 30-5-1993.
3. On completion of the investigation, a show-cause notice was issued to the first respondent herein along with some other persons who were found to have been involved in smuggling the above-said goods. On adjudication by the Commissioner of Customs (Sea), an order of absolute confiscation of 15.171 Metric Tonnes of sandalwood, 4,20,000 pieces of peacock feathers and 238 Kgs. of mica powder totally valued at Rs. 81,11,320/- was passed and the same were recovered. Further, a penalty of Rs. 5,00,000/- was imposed on the first respondent among others. Aggrieved by that order, the first respondent filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal, which, by its Final Order No. 1059/2006 dated 9-11- 2006 [2007 (209) E.L.T. 271 (Tribunal)], allowed the appeal on the premise that the criminal case initiated at the instance of the appellant has ended in acquittal in favour of the first respondent.
4. It is contended by the learned counsel appearing for the appellant that the SIIB had booked the case on Specific Intelligence that sandalwood was being smuggled out in the guise of export cargo by the first respondent. The officers of the SIIB detained the container and unearthed the goods, after a detailed adjudication, the original authority confiscated the entire goods and imposed a fine of Rs. 5,00,000/- against the first respondent on the ground that he was actively involved in smuggling the goods, which factum has been totally lost sight of by the Tribunal while allowing the appeal filed by the first respondent.
5. We heard the arguments of the learned counsel and perused the material on record.
6. It is on record that as against the action taken by the appellant for prosecuting the first respondent, the first respondent filed an application under Sections 397 and 401 of the Cr.P.C. before this Court. Upon a full- fledged enquiry, this Court discharged the first respondent under Section 239 of the Cr.P.C. This Court has held that the first respondent was dealing with red sander wood during the relevant period of time. The goods detained by the Department were only sandal wood, sandal wood chips peacock feathers and mica powder and there is no basis or material available to the department either to entertain any suspicion or to implicate the first respondent in the alleged smuggling of sandal wood, sandal wood chips, peacock feathers and mica powder. By recording a categorical finding that the department has not made out a prima facie case against the first respondent, this Court discharged the first respondent from the charges levelled against him.
7. It is an admitted case that there is no variance in the charges levelled and the acquisition made against the first respondent herein before the Customs Excise and Service Tax Appellate Tribunal, which was the subject 14 Appeal Nos. E/56 & 57/2011 matter of the Criminal Revision before this Court in which the first respondent was discharged. The basic material which formed the basis for levelling the charges against the first respondent herein, before this Court in the criminal proceedings and before the Tribunal are verbatim same, neither there is a deletion nor addition in it. In those factual circumstances of the case, the Tribunal allowed the appeal by stating that on the very same charges levelled against the first respondent, this Court, in the Criminal Revision, discharged him from all the charges and hence, the first respondent cannot be thrusted with penalty in a sum of Rs. 5,00,000/-, as there was no material to connect him with the alleged charges.
8. Learned counsel for the appellant sought to argue that the departmental proceedings cannot be compared with a criminal proceeding and for proving departmental charges, the preponderance of probability is enough, whereas in criminal proceedings, the charges have to be established beyond all reasonable doubt. We are not able to countenance the argument of the learned counsel for the appellant, as the charges are one and the same, and as against the action sought to be taken under the Customs Act, this Court has discharged the first respondent from the charge of attempting to export the goods against the provisions of the Customs Act. Hence, the contention raised by the learned counsel for the appellant deserves to be rejected and is accordingly rejected.
9. When the attempt of the appellant to establish the charges levelled against the first respondent has failed and this Court has also categorically viewed that there was absolutely no material adduced by the appellant to connect the first respondent in the alleged smuggling activities, we are of the view that the Tribunal is correct in allowing the appeal filed by the first respondent and there is no question of law, much less substantial question of law arising to admit this appeal. Accordingly, this Civil Miscellaneous Appeal is dismissed. There will be no order as to costs.
10. The law on the point of exoneration in criminal proceedings, which requires standard of proof beyond all reasonable doubts, has to be considered as yardstick to come to the conclusion proceedings before the Tribunal. In the case in hand, since, prosecution launched against the assessee and the Shri M.M. Reddy was quashed and they were acquitted, I find that the reliance placed by the Revenue in the same set of evidence cannot hold ground to confirm the demands raised along with interest and imposed penalties on appellants.
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Appeal Nos. E/56 & 57/2011
11. On this point itself, the impugned order is set aside. The entire Order-in-Appeal is set aside. In view of the same, I am not recording any findings on various submissions made by both sides.
12. In view of the foregoing, the impugned order is set aside and the appeals are allowed.
(Order pronounced on 11/09/2018 in open court) M.V. RAVINDRAN MEMBER (JUDICIAL) Lakshmi....
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