9911796707
TMI Blog2009 (3) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant point of time, Bhilai Based Unit of the Company was engaged in manufacturing of Cast Iron Anti Creep Bearing Plates (CIACBP) in accordance with the specifications and design approved by RDSO (Research, Design and Specification Organization) of the Ministry of Railways, Government of India. 3. It was upon a complaint made by the Assistant Collector, Customs & Central Excise, Bhilai that cognizance of the offence punishable under Section 9 of the Act was taken against the respondents and co-accused namely B.L. Shaw, A.K. Jaiswal, M.K. Jaiswal and R.K. Jaiswal. The complaint contained the following allegations - On 21-3-1987, during a surprise inspection of the Industrial Unit, Superintendent (Prev.) found that R1 was involved in manufacturing of CIACBP without obtaining or applying for a Central Excise Licence despite the fact that being a material exclusively used for fixing the rails, the product was appropriately classifiable under the Sub-Heading 7302.90 in Chapter 73 of the Central Excise Tariff. Further, the Company during the period from 28-2-1986 to 31-3-1987 had already removed 3,32,188 Nos. of the product worth Rs. 1,41,69,007.50 even without discharging liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that the product viz. CJACBP was classifiable under the sub-heading 7302.90, the Tribunal proceeded to set aside the penalty holding that the act of the respondents in not applying for Central Excise Licence was based on a bona fide belief. For a ready reference, the relevant extracts of the order may be reproduced as under - Therefore, the appellants can be said to have been under a bona fide belief that bearing plates and brake blocks even after the change in tariff w.e.f. 1-3-1986 were classifiable as iron castings under Heading 73.07. In the light of the above, the failure of the appellants to apply for Central Excise Licence tantamount to suppression, specifically in the absence of any conscious or deliberate withholding of information. It has been held by the Supreme Court in Collector of Central Excise v. Chemphar Drugs and Liniments 1989 (40) E.L.T. 276 that "something positive other than mere ination or failure on the part of manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required, before it is saddled with any liability beyond the period of 6 months. In the case of Padmini Products v. Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 145 (Kar.) (v) Jagmohan Jindal and Anr. v. State of West Bengal (vi) Metal Forgings Pvt. Ltd. and Ors. v. Superintendent (Preventive), Central Excise - 2008 (225) E.L.T. 32 (Del.). (vii) Rajesh Kothari and another v. A.S. Bandopadhyay, Superintendent of Customs (viii) Ajay Gulati v. Union of India - 2008 (228) E.L.T. 177 (Del.) 11. However, as explained by a three Judge Bench of the Apex Court in Standard Chartered Bank v. Directorate of Enforcement - 2006 (197) E.L.T. 18 = (2006) 4 SCC 278 though with reference to the analogous provisions of FERA, proceedings of adjudication and prosecution being independent of each other can be launched and pursued simultaneously. 12. On a conspectus of all leading decisions on the subject, the legal position as to effect of adjudication on prosecution can be summed up in no better way than the one adopted by Justice A.K. Sikri in Sunil Gulati v. R.K. Vohra - 2007 (1) JCC 220. The relevant extracts of the judgment may be reproduced as under - (1) On the same violation alleged against a person, if adjudication proceedings as well as criminal proceedings are permissible, both can be initiated simultaneously. For initiating criminal proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch 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. 13. In all the above-mentioned decisions cited by learned counsel for the respondents, the criminal proceedings were quashed under inherent powers, which Section 482 of the Code of Criminal Procedure, purports to save. However, no such powers have been conferred on the Court of Session. The appeal, therefore, concerns a different question as to the power of the appellate Court to take note of an event subsequent to the conviction recorded by the trial Court. In other words, the point for consideration is as to whether a finding of guilt recorded by learned Magistrate could be set at naught simply because the respondents were exonerated from the penal consequences by virtue of a subsequent order passed by the Tribunal. 14. Obviously, the ground that was not in existence at the time of filing of the Criminal Appeal could not be urged at the time of final hearing thereof. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitial burden exists upon the prosecution and only when it stands satisfied, the legal burden would shift. Even then, the standard of proof required for the accused to prove his innocence is not as high as that of the prosecution". 17. Accordingly, the contention that mens rea was not required to be proved is apparently misconceived. Further, the evidence on record that comprised of the sworn testimony of R2 clearly established the following facts - (i) Prior to the introduction of the 1985 tariff, CIACBP was classified under T.L. 25 as iron castings fully exempt from payment of duty by virtue of Notification 208/83, dated 1-8-1983. (ii) Even after the change in tariff bringing the iron castings under Heading 73.07 and CIACBP under sub-Heading 7302.90, the respondents submitted the requisite declarations indicating that the product was covered by sub-Heading 7307.10. (iii) The HSN Explanatory Notes were available only in Sept., 1985 and complete harmonization of the Central Excise Tariff with the HSN could be achieved only in 1986. (iv) There was no possibility of any wrongful gain to the respondents as duty payable on the product was ultimately to be borne by the Railways in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
