Allahabad High Court
Buckeye Machines Private Ltd., Shri ... vs Union Of India (Uoi) Through Assistant ... on 10 July, 2007
Author: Saroj Bala
Bench: Saroj Bala
JUDGMENT Saroj Bala, J.
1. By means of this application under Section 482 Cr.P.C. the applicants seek quashing of proceedings of Criminal cases No. 829 of 1998 and 830 of 1988 Union of India v. Buckeye Machines Private Limited pending in the court of Special Chief Judicial Magistrate, Kanpur.
2. Heard Shri Arun Kumar Singh holding brief of Shri Vipin Sinha, learned Counsel for the applicants learned A.G.A. and have perused the record.
3. The applicant No. 1 Buckeye Machines Private Limited is a Company incorporated under the Companies Act 1956. Applicant No. 2 was the Executive Director and applicant No. 4 was the Manager of the Company. The applicant No. 3 was Honorary Member-cum-Chairman of the Company. The applicant No. 1 was carried on business of manufacturing different types of machines as well as spare parts including punches known as extrusion punches. The machines and extrusion punches fell under the Tariff Item 68 of the First Schedule of the Companies Act. During the year 1981-82 and 1982-83 classification list in respect of machines and extrusion punches under Tariff Item 68 were filed. The extrusion punches being covered under Tariff Item 68 no excise duty was payable. On 26.2.1983 Preventive Officer of Central Excise Department, Aligarh inspected the factory premises of the company and issued a show cause notice demanding excise duty of Rs. 40,429,78 The Deputy Collector (Technical), Central Excise, Kanpur vide order dated 30.4.1984 held that the cans manufacturing machine in which the extrusion punches are designed to be files machine tools liable to excise duty under Tariff Item 50-A(iii). An appeal was filed against the said order before the Collector (Appeals), Central Excise, New Delhi. The appellate authority dismissed the appeal vide order dated 13.7.1988. The applicants preferred an appeal before the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi against the order dated 13.7.1988. The appeal was allowed by an order dated 3.1.1997 holding that extrusion punches are classifiable under Tariff Item 68 of the Excise Tariff. The applicants refund claim for Rs.60934.38 deposited with reference to the order passed by Deputy Collector (Technical) Central Excise, Kanpur was allowed by an order dated 21.7.1997 passed by the Assistant Commissioner Central Excise.
4. The criminal complainants under Section 9 of Central Excise and Salt Act read with Rule 220 of Central Excise Rules, 1944 were instituted by the Divisional Preventive Officer Aligarh against the accused applicants on the ground that they were engaged in manufacturing extrusion punches falling under the Tariff Item 51A without having a valid license. The applicants were licensed to manufacture the goods classified under Tariff Item No. 68. They were liable to make payment of duty for the financial year 1981-82 mounting to Rs. 24623.40 and Rs. 15806.38 for the financial year 1982-83.
5. The learned Counsel for the applicants argued that the penalties imposed having been cancelled after setting aside the assessment, the applicants cannot be made to suffer the rigours of criminal trial. The learned Counsel in support of his contention placed reliance on the decision in the case of K.C. Builders and Anr. v. Assistant Commissioner of Income Tax (2004) 2 Supreme Court Cases (sic).
6. The levy of penalties has been struck down by the Appellate Tribunal. The amount demanded as duty and deposited by the applicants was returned on 31.7.1997 after the decision of Appellate Tribunal. The Appellate Tribunal held that extrusion punches were claimable under Tariff Item 68 and not under Item 51-A of the Excise Tariff. The applicants held license for manufacturing goods classified under the Tariff Item No. 68.
7. The powers under Section 482 are to be exercised to present the abuse of process of Court and to do real and substantial justice. The Apex Court in the case of State of Karnataka v. M. Devendrappa and Anr. (2002) 3 SCC 89 has held that, it would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of Justice. In the case of K.C. Builders and Anr. (Supra) the Apex Court has held that, 'it is settled law that levy of penalties and prosecution under Section 276C of Income Tax Act are simultaneous. Once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution is automatic.' In view of the law laid down by the Apex Court after final adjudication of Appellate Tribunal that no duty was payable as the extrusion punches tell under Tariff Item 68 the continuation of criminal proceedings will amount to abuse of process of law.
8. In view of the foregoing discussion allowing this application the proceedings of criminal complaint case No. 829 of 1988 and 830 of 1988 Union of India v. Buckeye Machines Private Limited pending in the court of Special Chief Judicial Magistrate, Kanpur respondent No. 2 are quashed.