HIGH COURT OF KARNATAKA
Assistant Collector of Central Excise
versus
Karnataka Chemicals
B.V. PINTO, J.
CRIMINAL APPEAL NO. 2677 OF 2006
JANUARY 11, 2013
JUDGMENT
1. This appeal is filed challenging the judgment dated 08.09.2006 passed by the First Additional Civil Judge (Sr. Dn.) & C.J.M., Dharwad, in C.C. No. 300/1992 acquitting the respondent of the offences punishable under sections 9(1)(b), 9(1)(bb) and 9(1)(bbb) of the Central Excise and Salt Act, 1944 r/w Rules 9(2), 52, 52A, 53, 173, 173F, 173G and 226 of the Central Excise Rule, 1944, punishable u/s 9(1)(i) of the Act and also challenging the imposition of fine of Rs.25,000/- on the complainant as costs.
2. It is the case of the prosecution/complainant who is the Assistant Collector of Central Excise, Hubli Division, that the accused were manufacturing synthetic organic dyestuff but were avoiding payment of duty of Central Excise claiming exemption. Payment of Central Excise on the basis of the Notification stating that the turnover was below Rs.2.5 lakh and hence they are exempted from payment of Central Excise. The accused No.1 who is a Company was claiming exemption from 1982 to 1985 on the ground that he was within the value outputs exempted. On verification of the invoices it was disclosed that accused had sold goods worth more than the exempted limit and he has avoided to pay the duty of Rs.1,52,141.86, thereby the accused No.1 is alleged to have committed the offences under the above sections.
3. The offences committed by the accused being a warrant case, learned trial Judge treated the same as a private complaint and the complainant was examined as P.W.1. After recording the evidence of P.W.1 before charge, the charge was read over to the accused on 24.08.2004 and thereafter 3 more witnesses were examined. After conclusion of recording of evidence of the witnesses statement u/S 313 Cr. P.C. was recorded whereunder the accused have pleaded innocence.
4. The learned Magistrate thereafter heard the accused and by the impugned judgment acquitted the accused of the offences charged against them. While so doing, the learned Magistrate imposed cost of Rs. 25,000/- on the complainant directed him to pay the same within six months from the date of that order. Being aggrieved by the said order of acquittal and imposition of cost, this appeal has been filed. This Court on filing of the appeal ordered issue of notice to the respondent/accused and accused No.3 has appeared through counsel. Whereas, though accused No.1 and 2 are served they have not appeared before the Court. Since more than six years have passed from the date of filing of this appeal, the matter is taken up for final hearing with the consent of both the counsels in the admission stage itself. Hence I have perused the materials on record.
5. Heard Sri A.A. Pathan, learned counsel for the appellant and Sri Sriharsh A. Neelopanth, learned counsel appearing for the respondent No. 3.
6. P.W.1-Adiveppa Mariyappa Kittali, is the complainant. He has stated that he is working as Superintendent of Central Excise and he was the superior officer of the accused firm. He has further stated that the firm has started business in 1982 and was manufacturing synthetic organic dyes. He has further stated that the accused were avoiding payment of Central Excise on the dyes manufactured.
7. P.W.2-Verupaxappa Basalingappa Kurtakoti is the Assistant Collector of Central Excise. He has also stated that in the year 1989 he received a letter of authorization from the Collector of Central Excise, Belgaum, as per Ex.P.7. Accordingly, he has filed a complaint. P.W.3-Krishna Gurunath Joshi, is the Inspector of Customs. He has stated that on 09.08.1995 as per the directions of the then Superintendent, himself and Sri F.B. Samrani visited the firm of the accused and verified the concerned books. He has also verified the daily stock, monthly returns and invoices and gave an acknowledgment in that regard to the accused. He has also seized 17 invoices at the time of his visit, so also, the monthly returns and other documents. It is his evidence that he had received complaint that accused had shown undervaluation of clearance to avoid payment of excise duty. It is stated by him that the accused was exempted upto a limit of Rs.25.00 lakh and on verification it was noticed that the accused had avoided a sum of Rs.1,52,141.86 which was payable by him as excise duty. With these three witnesses the prosecution has closed its side.
8. The learned Magistrate after considering the above evidence on record has observed that the case has been hopelessly filed against the accused only with an intention to harass the accused. The learned Magistrate has come to the conclusion on the basis of the records placed by the accused specifically marked as Ex.D.1 and Ex.D.2.
9. It is the case of the accused that he has preferred an appeal before the Collector of Central Excise, Madras and by order dated 27.03.1987, the appeal was allowed, whereunder, the order passed by the Collector of Central Excise, Hubli Division on 16.12.1986 was challenged and the same was set aside. The learned Magistrate has further observed that once the Collector of Central Excise, Madras, has allowed the appeal, there was no need to file the criminal case charging them that they are evading Central Excise Tax. Ex.D.1 is the order produced by the accused in Appeal No. 32/1987 and Ex.D.2 is the order passed in Appeal No. 65/1987. Learned Magistrate has held that the petitioners would not have been liable to pay any duty and therefore the complainant should have known that no case is liable to be filed against them. Learned Magistrate has ultimately observed that false proceedings have been initiated against the accused.
10. I have gone through the judgment of the trial Court and also the reasoning of the trial Court in acquitting the accused. Having regard to the feeble evidence of prosecution witnesses and also Ex.D.1 and Ex.D.2, I am of the opinion that the order of acquittal passed against the respondents does not call for interference and therefore the appeal so far as challenging the order of acquittal is hereby dismissed.
11. So far as the imposition of penalty is concerned, Sri A.A. Pathan, learned counsel for the complainant submits that the accused could have produced Ex.D.1 and Ex.D.2 at the time of recording the evidence before charge which was in the year 1997 and the orders-Ex.D.1 and Ex.D.2 are pertaining to the year 1987. Under the circumstances, no fault can be attributed to the complainant for filing false charge sheet. It is seen that the evidence before charge has been commenced in these cases on 08.10.1997 and at that time the accused have already been summoned before the Court. Nothing prevented the accused from submitting before the Court that they have secured the order in Appeal No. 32/1987 and Appeal No. 65/1987. If such an order was passed, the complainant could have filed an application for withdrawing the case, but it is only latter that such orders are produced before the Court. Hence, no fault can be fixed on the complainant.
12. In that view of the matter, the order directing to pay cost of Rs. 25,000/- is liable to be set aside. Accordingly, direction to the complainant to pay cost of Rs. 25,000/-, is hereby set aside. Registry of this office is directed to refund a sum of Rs.5,000/- deposited in this Court on 26.04.2007 to the appellant/complainant. The appeal is disposed of accordingly.
