Case Law Details
M/s. Deccan Tobacco Processors Limited & another Vs Union of India (Telangana High Court)
Conclusion: The standard of proof in criminal proceedings was higher than the standard of proof in civil/departmental proceedings. In a reverse case, where criminal proceedings ended in acquittal but simultaneous departmental proceedings continued, the result of the criminal proceedings would not have any bearing on the departmental proceedings, as judgment of the criminal Court was not binding in civil or departmental proceedings. However, in the instant case, when the departmental proceedings ended in favour of the accused and moreover, when the prosecution launched was on the same set of facts and allegations, the continuance of prosecution would be gross abuse of process of law.
Held: Assessee-company was manufacturer of cut tobacco which was excisable good as per the schedule incorporated under the provisions of the Act. The case of the prosecution was that on a surprise check at the premises of one M/s. T Limited, it was found that 115 bags of cut tobacco accounted for 3,910 KGs was clandestinely cleared without separate documents and payment of excise duty. The documents seized from the custody of the accused reflected that the documents required to be used only once were repeatedly reused mainly for payment of excise duty. It was the further case of the prosecution that on 15.06.1995, they had intercepted another vehicle which was carrying 230 bags of cut tobacco accounted for 7,820 KGs, without paying excise duty. The prosecution further asserted that it had seized 60 empty bags which, according to them, were from cut tobacco, which was sold to M/s. T Limited. Thus, on the claim that M/s. T Limited had evaded excise duty, at the instance of A1 company and on the instructions of A2, prosecution was launched against assessee. On a perusal of the complaint, it was to be noted that the averments therein were verbatim repetition of the averments in the show cause notice dated 05.12.1995. There could not be any doubt that departmental proceedings and criminal prosecution could be initiated simultaneously. It was settled law that there could not be any hard and fast rule as to whether the criminal proceedings had to be quashed after departmental proceedings were concluded in favour of the accused. It depend upon the fact situation arising in each case. As seen from the contents of the complaint, the prosecution was launched, in view of the fact that the Commissioner (Adjudication), directed the department to initiate further proceedings in law for time being in force, as the accused company was found to have evaded payment of duty under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11-A of the Act and confiscation was ordered and penalty was levied under the relevant Rules. The appeal had been allowed by the CESTAT giving a clean chit to the accused. It was categorically held that the lower authority had not given any reasons to impose penalty on the accused and there was no evidence to that effect. The order of the appellate authority had attained finality. Thus, continuance of prosecution against assessee under self-same allegations contained in the departmental proceedings was an exercise in futility. As seen from the contents of the complaint, the prosecution was launched, in view of the fact that the Commissioner (Adjudication), directed the department to initiate further proceedings in law for time being in force, as the accused company was found to have evaded payment of duty under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11-A of the Act and confiscation was ordered and penalty was levied under the relevant Rules. It was settled law that the standard of proof in criminal proceedings was higher than the standard of proof in civil/departmental proceedings. In a reverse case, where criminal proceedings ended in acquittal but simultaneous departmental proceedings continued, the result of the criminal proceedings would not have any bearing on the departmental proceedings, as judgment of the criminal Court was not binding in civil or departmental proceedings. However, in the instant case, when the departmental proceedings ended in favour of the accused and moreover, when the prosecution launched was on the same set of facts and allegations, the continuance of prosecution would be gross abuse of process of law. In the instant case, complaint was filed pursuant to the observation made by the Commissioner (Adjudication), that the department was not precluded from initiating further action in law for the time being in force. The order of the Commissioner (Adjudication) merged with the order of CESTAT wherein the appeal was allowed reversing the order of the original authority. Further appeal filed by the department before the High Court came to be withdrawn.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
This criminal petition is filed by the petitioners/accused to quash the proceedings in CC.No.170 of 2005 on the file of the Special Judge for Economic Offences Court, Hyderabad.
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