Choubey Sugandith Tambaku Company Thru.Chhedi Lal Sharma &Ors V. The Union Of India & Anr

CR. MISC./18235/2009

AI Insights

The case involves Choubey Sugandith Tambaku Company and its partners, who are petitioners, against the Union of India, the respondent. The petitioners sought to quash the proceedings and the order taking cognizance in Complaint case no. 378C/2008, which was filed under various sections of the Central Excise Act, 1944. The complaint alleged clandestine removal of branded chewing tobacco, leading to evasion of central excise duty. The petitioners contested the proceedings, citing ongoing related appeals and reference applications in the Calcutta High Court, which questioned the basis of the allegations and the legal interpretations applied. The court's decision to stay the proceedings was influenced by the need to avoid conflicting judgments and the principle of judicial economy.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 815423 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 12-01-2012
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax, Mumbai vs Bhupen Champak Lal Dalal and another, CIT vs Bansi Dhar & sons
• Laws Referred To: Central Excise and Salt Act, 1944, Criminal Procedure Code (Cr.P.C)
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARCHNA SINHA
• Assessee Lawyers: UTTAM MISHRA
• Keywords: Central Excise Duty; Clandestine Removal; Extra-ordinary jurisdiction; Quashing petition; Stay of Proceedings
• Section: 482; 9(i)(b); 9(i)(c); 9(AA)

Judgement Text

" IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal Miscellaneous No.18235 of 2009 Choubey Sugandith Tambaku Company Thru.Chhedi Lal Sharma &Ors .... .... Petitioners Versus The Union Of India & Anr .... .... Opposite Parties Appearance : For the Petitioners : M/s. D.V. Pathy with Uttam Kumar Mishra For the Opposite Parties : M/s. N. Nirvik with Archna Sinha HONOURABLE MR. JUSTICE HEMANT KUMAR SRIVASTAVA 1. The petitioners, while invoking the extra-ordinary jurisdiction of this court under section 482 of the Cr. P.C, have prayed for quashing the entire proceeding including order taking cognizance dated 18.11.2008 passed in Complaint case no.378C/2008 by the learned Special Judge, Economic offences, Patna. 2. The brief fact, which lies to file this quashing petition, is that Union of India through Sri Babua Tudu, Assistant Commissioner, Central Excise Division, Bhagalpur filed Complaint case no.378C/2008 against the petitioners for the offences under sections 9(i)(b), 9(i)(c) and 9(AA) of Central Excise and Salt Act, 1944 now Central Excise Act, 1944 alleging therein that petitioner no.1 is a company whereas rest petitioners are its partner and they were in-charge of the company for conduct of business of the company. The aforesaid company is manufacturer of branded Chewing Tobacco having branded name as Balwan Chhap Sugandit Khaini. On 2.5.1997 a team of Central Excise officers visited the factory premises of the aforesaid Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 2 company and examined documents/ records and then it was detected that the aforesaid company had clandestinely removed branded chewing tobacco more than once on one invoice and as such their invoice books as well as transport challans were resumed for through scrutiny and it was detected that under the same set of invoice goods have been transported some time to Jainagar, some time to Sitamarhi and some invoices were used for some other transportations. On examination of the documents, it was also found that petitioners clandestinely removed 7053 cartons having quantity of 196.534 M.T branded chewing tobacco using 45 invoices in the above stated manner and evaded central excise duty amounting to Rs 69,81,987.84/- and accordingly, all the above stated petitioners are liable for punishment under sections 9(i)(b), 9(i)(c) and 9(AA) of Central Excise Act, 1944. The Chief Commissioner of Central Excise Ranchi Zone, Patna granted sanction for prosecution and to file case against the petitioners and accordingly, complainant filed the above stated case in official capacity. 3. On the basis of aforesaid complaint case, learned Special Judge, Economic offenses, Patna took cognizance of the offences vide order dated 18.11.2008. 4. Being aggrieved and dissatisfied with the aforesaid prosecution and cognizance order, petitioners have preferred this petition for quashing the entire proceeding as well as order taking cognizance as stated above. Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 3 5. The instant quashing petition was admitted for hearing on 19.7.2011 and later on, matter was put up before this court for hearing. 6. 6. Learned counsel appearing for the petitioners submitted that petitioners have filed present petition for quashing the entire proceeding including order taking cognizance in Complaint case no.378C/2008 but now, they are only pressing for stay of further proceeding of Complaint case no.378C/2008 till the final disposal of reference case pending in the Hon’ble High Court, Calcutta. He further submitted that after confirmation of demand-cum- show cause notice, petitioners filed appeal before the Central Excise and Gold (Control) Appellate Tribunal, Eastern Zonal Branch, Calcutta. In the aforesaid appeal although, the Hon’ble Tribunal concurred the findings of Commissioner, Central Excise, Patna, yet the Hon’ble Tribunal reduced penalty imposed upon the petitioners. He further submitted that petitioners filed reference application before the Hon’ble High Court, Calcutta for seeking reference that there was no allegation of fraud or collusion or wilful mis-representation in the show cause notice and conclusion of clandestinely removal of the goods was based on mere suspicion and surmises. The Hon’ble High Court, Calcutta after hearing the parties admitted the reference application on following grounds of law:- (i) Whether in absence of any specific allegation of any fraud or collusion or wilful mis- representation in the show cause notice, the provisions of the proviso of section 11-A extending the period of limitation beyond six months is justified Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 4 in law and without and /or in excess of the competent jurisdiction or authority of the Commissioner or Central Excise?. (ii) Whether the Tribunal in arriving at the conclusion of clandestine removal of the goods proceeded on suspicion and surmises ignoring the relevant materials and/or evidence which clearly demolish such conclusion and as such said conclusion of the Tribunal is unreasonable and perverse? 7. It is further contended by him that after passing of the above stated order of the Hon’ble High Court, Calcutta , petitioners filed application for stay before the Hon’ble Tribunal and the Hon’ble Tribunal directed the petitioners to deposit a sum of Rs 20 lakhs as a condition precedent to stay of demand of central excise duty and penalty vide as per demand -cum- show cause notice. In compliance of the aforesaid order of Hon’ble Tribunal, the petitioners deposited a sum of Rs 20 lakhs with Excise authority and after that the Hon’ble Tribunal stayed recovery of central excise duty till final disposal of reference application by the Hon’ble High Court, Calcutta. 8. It is further contended by him that since the complaint case bearing Complaint case no. 378C/2008 has been filed in the court of the Presiding Officer, Economic Offence, Patna on the same ground and therefore, in the interest of justice further proceedings of aforesaid complaint case must be stayed till final decision of the Hon’ble High Court, Calcutta in reference application. 9. Learned counsel appearing for the petitioners cited a decision reported in (2001) 3 Supreme Court cases 459 Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 5 (Commissioner of Income Tax, Mumbai vs Bhupen Champak Lal Dalal and another) in which the Hon’ble Apex Court of this country has held that when ultimately, the result to come out of the proceedings before the appellate authority had a definite bearing on the cases alleged against the respondents, the High court was justified in granting interim order. In the aforesaid case, 12 criminal cases were lodged against one Bhupen Champak Lal Dalal and another under Income Tax Act before the Metropolitan Magistrate for the offences punishable under the aforesaid Act. The aforesaid Champak Lal Dalal and another filed appeal against assessment order and Champak Lal Dalal and another filed application for stay of the proceeding arising out of the criminal court. The Metropolitan Magistrate granted interim order in favour of Champak Lal Dalal and another. The matter went before the Hon’ble Supreme Court and the Hon’ble Supreme Court observed at para 3 of the aforesaid decision which reads as follows:- “The prosecution in criminal law and proceedings arising under the Act are, undoubtedly, independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, a wholesome rule will have to be adopted in matters of this nature where the courts have taken the view that when the conclusions arrived at by the appellate authorities have a relevance and bearing upon the conclusions to be reached in the case unnecessarily, one authority will have to await the outcome of other authority”. 10. On the strength of the aforesaid decision, learned counsel for the petitioners submitted that the provision of Central Excise Act, 1944 as well as Income Tax Act, 1961 are almost Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 6 identical and admittedly, in the present case, the Hon’ble Tribunal has already stayed recovery of central excise duty till final disposal of the reference application by the Hon’ble High Court, Calcutta and the aforesaid reference application is still pending before the Hon’ble High Court, Calcutta. So, the proceedings of Complaint case no. 378C/2008 should also be stayed till final decision of the reference application of the Hon’ble High Court, Calcutta because the Hon’ble High Court, Calcutta specifically formulated this point as to whether the goods in question were clandestinely removed or allegation of clandestine removal of the goods has only been levelled on the basis of suspicion and surmises ignoring the relevant materials. 11. It is further contended by him that admittedly, reference application is pending before the Hon’ble High Court, Calcutta and, therefore, the appeal filed by the petitioners against confirmation of demand-cum- show cause notice by the Commissioner, Central Excise, Patna is still pending. In support of his contention, he referred a decision reported in Vol. 157 1986 ITR 665 (SC) ( CIT vs Bansi Dhar & sons) in which it has been held that the pendency of the reference does not detract from jurisdiction of tribunal to grant stay of realization of tax or injunction because the aforesaid jurisdiction remains with the appellate tribunal. 12. It is further contended by him that since the petitioners are only interested for stay of further proceedings of Complaint Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 7 case no. 378C/2008 till disposal of their appeal pending before the Hon’ble Tribunal, this court should exercise its power vested under section 482 of the Cr.P.C because the petitioners have no any other way to seek above stated relief from the court except invoking extra-ordinary power of this court by filing a petition under section 482 of the Cr.P.C. 13. On the other hand, learned counsel for opposite party submitted that this petition is not maintainable and if petitioners are intended to seek any relief from the court, they should file writ petition to seek the above stated relief. In support of the above stated contention, the learned counsel for opposite party relied upon the same decision reported in 2001(3) Supreme Court cases 459. It is also contended by learned counsel for opposite party that it is well settled proposition of law that even if civil remedy is available in a case, there is no bar to initiate criminal prosecution if any offence is made out. To fortify the aforesaid contention, decision reported in 2000(3) PLJR page 56 has been citied. 14. Having heard rival contentions of both the parties as well as having considered decisions cited on behalf of the parties I went through the record. 15. Certain facts are admitted between the parties. It is an admitted position that demand-cum- show cause notice was issued by the department to the petitioners mentioning therein as to why central excise duty amounting to Rs 69,81,987/- be not recovered and penalty be not imposed under the relevant provision of Central Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 8 Excise Act. Furthermore, it is also admitted position that demand- cum- show cause notice was confirmed by the Commissioner, Central Excise, Patna and penalty was imposed upon the petitioners. It is further admitted position that after confirmation of demand-cum- show cause notice and imposition of penalty and other charges, petitioners filed appeal under relevant provisions before the Central Excise and Gold (Control) Appellate Tribunal, Eastern Zonal Branch, Calcutta and in the aforesaid appeal, several grounds were taken including this ground that there was no clandestine manufacture and removal of excisable goods manufactured by the petitioners. It is further admitted position that the Hon’ble Tribunal affirmed the order of Commissioner, Central excise, Patna but reduced penalty imposed upon the petitioners. In course of hearing of the aforesaid appeal, several points were raised and one of the points was that as to whether petitioners had clandestinely removed the goods in question or not. Admittedly, after the order of the Tribunal, petitioners filed reference application before the Hon’ble High court, Calcutta and the Hon’ble High court, Calcutta vide its order dated 20.9.2001 passed in CEXA 3/2001(Choubey Sugandhit Tobacoo company vs Commissioner, Central Excise, Patna and another) directed the Tribunal to refer following questions for the opinion of the court:- (i) Whether in absence of any specific allegation of any fraud or collusion or wilful mis- representation in the show cause notice, the provisions of the proviso of section 11-A extending the period of limitation beyond six months is justified in law and without and /or in excess of the competent jurisdiction or authority of the Commissioner or Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 9 Central Excise?. (ii) Whether the Tribunal in arriving at the conclusion of clandestine removal of the goods proceeded on suspicion and surmises ignoring the relevant materials and/or evidence which clearly demolish such conclusion and as such said conclusion of the Tribunal is unreasonable and perverse? 16. After the above stated order of the Hon’ble High Court, Calcutta, the Hon’ble Tribunal stayed final order passed by the Commissioner, Central Excise, Patna as well as order dated 13.11.2000 passed by the Tribunal in Appeal nos. E-538-543 and 545/1998 till final disposal of the reference application by the Hon’ble High Court, Calcutta vide its order dated 6.11.2001 passed in 1-7 MAS-366-342/2001 (in appeals E-538-543 and 545/1998). 17. Learned counsel appearing for the opposite party challenged the maintainability of this petition on the ground that petitioners ought to have filed writ petition before this court but I am not at all convinced with the submission of learned counsel for the opposite party because this court has got ample power to pass any order by exercising its power under section 482 of the Cr.P.C to do complete justice between the parties. 18. Admittedly, in similar situated fact, the Hon’ble Apex Court of this country confirmed the order of stay passed by the Metropolitan Magistrate and, therefore, in my view, the fact of the present case is squarely covered by the decision reported in 2001(3) Supreme Court cases 459 and this court can grant relief to the petitioners under section 482 of the Cr.P.C. 19. So far as decision reported in 2000(3) PLJR 56 on Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 10 behalf of opposite party is concerned, the same is also not applicable in view of the submission advanced on behalf of the petitioners because the petitioners have not sought relief for quashing the entire proceeding of the Complaint case no. 378C/2008 rather they are only interested for stay of the aforesaid proceeding of the Complaint case no. 378C/2008 till final decision of the Hon’ble High Court, Calcutta in reference application. 20. It is an admitted position that the Hon’ble Tribunal has already referred the above stated two questions before the Hon’ble Court for its decision and the same is still pending before the Hon’ble High Court, Calcutta. It has already been held by the Hon’ble Apex Court of this country in the decision reported in 2001(3) Supreme Court cases 459 that the High court and the Supreme court merely exercised as an advisory or consultative jurisdiction while appeals are kept pending before the Tribunal and nothing should be employed as detracting from jurisdiction of the Tribunal and in view of the aforesaid decision, it is abduently clear that the appeals filed by the petitioners are still pending before the Hon’ble Tribunal and admittedly, in the aforesaid appeals, this question is also involved as to whether petitioners had clandestinely removed the goods in question or not. So, in my view, to avoid the contradictory decisions of the court, further proceedings of Complaint case no. 378C/2008 should be stayed till final decision of the reference application pending before the Hon’ble High Court, Calcutta Patna High Court Cr.Misc. No.18235 of 2009 dt.12-01-2012 11 21. In view of the aforesaid discussions, this petition stands disposed off with direction to the learned Special Judge, Economic Offences, Patna that he shall not pronounce judgment in Complaint case no. 378C/2008 till final decision of the reference pending before the Hon’ble High Court, Calcutta in CEXA 3 of 2001. The 17th January, 2012 Shahid/ NAFR ( Hemant Kumar Srivastava,J) "