TMI Blog2015 (5) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... re is such an irregularity, and there is any fine imponable for the same, the respondents would be at liberty to impose the same, after following due procedure. Revenue could not refute that with the basis for the criminal complaint having been actually removed, with the Apex Court having held that the goods manufactured by the firm of the petitioners are not exigible to Central Excise, the criminal complaint would no longer be maintainable. - complaint filed by the respondent before the learned Chief Judicial Magistrate, Amritsar, is quashed, along with all proceedings arising therefrom, including the orders of the learned trial Court, impugned in the present petition - Decided in favour of appellant. - Criminal Misc. No.M-31420 of 2009 - - - Dated:- 25-2-2015 - MR. AMOL RATTAN SINGH, J. Mr Vaneet Sharma, Advocate, for the Appellant Ms. Ranjna Shahi, Sr. Standing Counsel, for the Respondent JUDGEMENT Amol Rattan Singh, J. The petitioners have invoked the jurisdiction of this Court under Section 482 Cr. P.C. and seek quashing of complaint bearing case No.151 dated 20.04.2000, titled as Deputy Commissioner, Central Excise vs. M/s H. L. Textile Mills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, transmission belting and V-Belt manufacturing industrial units, where it is used in the production / processing of tyres, V-Belts and transmission belting, and the product (Liner) is being cleared by the firm as a finished textile product, suitable for industrial use, as such the product is approximately classifiable under the Sub-Heading5909.00 up till 25.05.1995 and thereafter, under Sub-Heading 5911.90, thereby attracting Central Excise Duty @ 15%, ad-valorem. 5. Mr. Vaneet Sharma, learned counsel appearing for the petitioners submitted that other than the filing of the criminal complaint by the respondent, on 20.04.2000, a show cause notice for imposition of penalty was also issued to the petitioners, by the Central Excise Commissioner, Chandigarh-II, vide his order dated 03.10.1997, by which penalty was imposed upon the petitioners under the Central Excise Act Rules. 6. The said order was challenged before the Customs Excise and Gold (Control) Appellate Tribunal (CEGAT), which, vide its order dated 08.01.2001 (Annexure P-2 annexed with the present petition), set aside the order of the Commissioner, holding that the use of the product (Liner) could not be called i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods would be that the latter would cover running lengths of textiles, unprocessed in the manner specified in the section note . After elaborating further on the issue, it was held that the reasoning given by the Tribunal in the Jyoti Overseas' case was unexceptionable and the decision in Simplex-I was correctly over-ruled (by the Tribunal). In view of the above, the appeal filed by the Revenue, in Simplex Mills-II, was dismissed. 8. In the reply filed to the present petition, referred to by Ms. Ranjna Shahi, learned counsel appearing for the respondent, the stand that is still being taken, is that the product in question is classifiable under Sub- Heading 5911.90 of the Schedule to the Central Excise Tariff Act, 1985, thereby attracting excise duty @ 15% and the stock lying in the factory premises having been verified and found to be of a value of ₹ 15,39,342/-, a duty of ₹ 2,30,901/- was leviable and as such the goods were seized. In reply to the contention of the petitioners that despite the CEGAT and the Apex Court holding that excise duty is not leviable on the product in question, it has been stated that in view of Section 34-A of the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l under Sub- Heading No.5909.00 up till 25.05.1995 and thereafter, under Sub-Heading No.5911.90 of Schedule-II to the Central Excise Tariff Act, 1985. This contention of the Revenue, having been specifically negated and held against it by the Supreme Court in the Simplex' case (supra), in the light of which the appeal of the Revenue against the petitioners themselves was also dismissed, I do no see any basis left for the Revenue to proceed in criminal proceedings against the petitioners. Once the goods manufactured are held not exigible to Central Excise, the question of any proceedings, for non-payment of such excise duty, obviously does not arise. Consequently, equally obviously, when no duty and penalty is leviable on the petitioners on the goods manufactured, criminal proceedings on the same cause of action would also be void, ab-initio. 12. It has not been either pleaded in the reply of the respondent, nor has any such argument been made in Court, that despite non exigibility to the excise duty claimed by the Revenue, against the petitioners and their firm, the goods are still required to be registered, under Rule 174 of the Central Excise Rules, 1944. A perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bbbb) contravenes any of the provisions of this Act or the rules made thereunder in relation to credit of any duty allowed to be utilised towards payment of excise duty on final products; c) fails to supply any information which he is required by rules made under this Act to supply, or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; d) attempts to commit, or abets the commission of, any of the offences mentioned in clauses (a) and (b) of this section; [shall be punishable,- i) in the case of an offence relating to any excisable goods, the duty leviable thereon under this Act exceeds one lakh or rupees, with imprisonment for a term which may extend to seven years and with fine: Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court such imprisonment shall not be for a term of less than six months; ii) in any other case, with imprisonment for a term which may extend to three years or with fine or with both. 2) If any person convicted of any offence under this section is again convicted of an offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other office shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section,- a) company means any body corporate and includes a firm or other association of individuals; and b) director in relation to a firm means a partner in the firm. 13. Thus, unless there is an actual evasion of excise duty, there is no offence attracting the aforesaid provisions made out against any person and as such, obviously not by the petitioners also, as per the law laid down, discussed above, in the Simplex-II case, followed in the petitioners' own case. Of course, if registration is compulsory under any Rule, not brought to the notice of this Court even where the goods manufactured/produced/dealt in by a person are not subject to excise dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for proceedings against them for evasion of any duty, the criminal proceedings would now only indeed be a misuse of the process. One option with this Court, in view of the arguments of counsel for the Revenue, could be that since now only arguments have to be addressed by counsel before the trial Court and the judgment pronounced thereafter, the matter may still be allowed to continue before that Court, with a direction to ensure that the law laid down by the Supreme Court, in favour of the petitioners, and their firm, is duly followed. Obviously, the effect of such a direction would only be virtually asking the trial Court to pass a formal order of dismissal, after the matter has been adjudicated in favour of the petitioners by this Court. The purposelessness of that action is only too obvious to elaborate any further on. 17. Consequently, the petition is allowed and the complaint dated 20.04.2000, filed by the respondent before the learned Chief Judicial Magistrate, Amritsar, is quashed, along with all proceedings arising therefrom, including the orders of the learned trial Court, impugned in the present petition, dated 17.08.2006 (Annexure P-3) and 27.10.2009 - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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