Rimjhim Ispat Ltd. vs Union of India

Om Prakash-VII, J.—This criminal revision has been filed with the prayer to quash the order dated 9-10-2015 passed by Special Chief Judicial Magistrate, Kanpur Nagar in Complaint Case No. 841 of 2014 (Union of India v. Rimjhim Ispat and Others) under Section 9/9AA of the Central Excise Act, 1944, Police Station Sumerpur, District Hamirpur. Further prayer has been made to stay further proceedings of the aforesaid case.

Heard Shri V.K. Upadhya, learned senior counsel assisted by Shri Ritvik Upadhya, learned counsel for the revisionists and Shri B.K. Singh Raghuvanshi, learned senior standing counsel appearing for the Department-opposite party No. 1 as well as the learned A.G.A. appearing for the opposite party No. 2.

Sri Vinod Kumar Upadhya, learned senior counsel assisted by Sri Ritvik Upadhya, learned counsel for the revisionists submitted that the present complaint in the present form cannot go on against the revisionists. The order dated 9-10-2015 passed by the concerned Magistrate is illegal. No ground exist to continue with the complaint. Seizure was made in the year 2007. The order passed by the adjudicating authority, i.e., Commissioner of Central Excise, Kanpur was set aside by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (CESTAT). This Court in the Writ Tax No. 771 of 2015 [2015 (326) E.L.T. 644 (All.)] quashed the proceedings started for realisation of the excise duty/tax penalties and remitted the matter back to the Commissioner Central Excise, Lucknow to decide afresh. Earlier, the revisionists vide application u/s 482 No. 31300 of 2014 approached this Court against the order passed in the complaint and this Court by the order dated 21-8-2014 directed the revisionists to move discharge application. In compliance of the said order, the revisionists moved discharge application before the concerned Magistrate but the Court below placing reliance on the subsequent order dated 28-8-2015 passed by the Commissioner of Central Excise, Kanpur Nagar illegally rejected the discharge application. It was further submitted that the order dated 28-8-2015 could not be taken as piece of evidence for the seizure made in the year 2007. It was further argued that the criminal prosecution in the present matter could also not go on for the reason that the departmental proceeding started against the revisionists to realise the fine/tax has been quashed. Thus, there was no ground to proceed with the complaint and there was also no fresh sanction on which basis complaint could be proceeded with. In support of the arguments, learned counsel for the revisionists placed reliance on the following case laws :

Radheyshyam Kejriwal v. State of West Bengal in (2011) 3 Supreme Court Cases 581. Though 2011 Volume (266) E.L.T. Page 294 (S.C.).

J.P. Tobacco Products Private Limited v. Assistant Collector of Central Excise, (M.P.) reported in 2008 (229) E.L.T. 325.

On the other hand, learned A.G.A. as well as learned counsel for the Department-opposite party No. 1 submitted that the criminal proceeding and the adjudication proceeding both are independent proceedings and can be launched simultaneously. In the present matter, the adjudication proceeding has not been finally terminated in favour of the revisionists but the concerned authority was directed to pass a fresh order for fixing the liability of each and every individual separately after giving an opportunity of hearing to the revisionists, with a view to place argument in support of exoneration. The order dated 28-8-2015 is also of same nature. The order for starting de novo proceedings was also passed with a view to fix separate liability. It was further submitted that the order passed by the concerned Magistrate on the discharge application, moved by the revisionists, are well founded and on the basis of correct appreciation of the evidence and the facts. The Court dealing with the matter at the stage of passing the summoning order has to see only a prima facie case. There was no any such type of evidence produced in support of the discharge application to establish that allegations levelled in the complaint do not exist. Learned counsel for the opposite parties have also placed reliance on Radheyshyam Kejriwal case (supra).

I have considered the rival submissions made by the learned counsel for the parties and have also gone through the entire record as also the case laws cited by the learned counsel for the parties.

In the present matter, in compliance of the order passed by this Court, discharge application was moved on behalf of the revisionists. An objection was invited by the Court concerned on the discharge application and after hearing the parties vide order dated 9-10-2015 discharge application was rejected observing that the adjudication proceeding and the criminal proceeding both are independent proceedings. The adjudication proceeding has not been finally terminated exonerating the revisionists from liability to pay the tax/fine, etc. The Court concerned also observed that vide order dated 28-8-2015 the adjudicating authority had fixed separate liability of the revisionists. The order passed for de novo proceeding to adjudicate the matter can also not be taken that adjudication proceeding has been ended in favour of the revisionists.

Regarding maintainability of the criminal proceeding and the adjudication proceeding, Hon�ble Supreme Court in Radheyshyam Kejriwal case (supra) has clearly held that in case of exoneration on merits in such adjudication proceedings, whereby the allegations are found to be unsustainable at all and a person concerned is held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue. It has also been held that whether allegations in both proceedings are identical and exoneration in adjudication proceedings is not on technical grounds, but on findings that there was no contravention of provisions, in such a situation, such findings are relevant in the criminal proceedings and the prosecution against a person concerned would be unjust and abuse of the process of the Court. Hon�ble Supreme Court quashed the proceedings on the ground that a person against whom criminal proceedings had been started has been exonerated in adjudication proceeding on merits. It has also been held in Radheyshyam Kejriwal case (supra) that adjudication and criminal proceedings both are independent to each other and both can go on hand in hand. It has also been held that prosecution can be launched even before conclusion of the adjudication proceedings under Section 51 of the Act.

If the ratio laid down by the Hon�ble Supreme Court in Radheyshyam Kejriwal case (supra) is taken into consideration, it is evident that the proceeding for imposition of penalty initiated against the accused/revisionists is distinct from the criminal complaint filed against them, both can continue simultaneously. Imposition of penalty is neither a prosecution nor a punishment for any offence. The accused is not exposed to any double jeopardy. Prosecution launched against the accused after the order of confiscation would also not be in violation of fundamental right guaranteed under Article 20(2) of the Constitution of India. The criminal Court has to judge the case independently on the basis of evidence placed before it.

In this case, the discharge application was moved before the concerned Magistrate on the ground that adjudication proceeding has come to an end. On perusal of the documents annexed with the memo of revision and also the reasoning given in the impugned order, it is evident that the revisionists have not been exonerated from the penalty/tax liability, etc., but the case was remitted back for fresh decision for fixing liability of each and every individual separately after giving opportunity of hearing to the revisionists.

So far as the contention raised by the learned counsel for the revisionists that the order dated 28-8-2015 cannot be taken as piece of evidence is concerned, the said submission has no force, as there is sufficient prima facie evidence against the revisionists to proceed with the complaint. It is settled legal position that at the stage of taking cognizance and summoning the accused, the Magistrate/Court dealing with the matter is required to apply judicial mind only with a view to take cognizance of the offence to find out as to whether prima facie case has been made out to summon the accused person. The Court dealing with the matter is not required to analyse the material at this stage to find out as to whether the matter will lead to conviction or not. Sufficiency of materials for the purpose of conviction is not required. The Court/Magistrate is not required to analyse the evidence as is done after recording the evidence in trial. The revisionists establishment/company have been registered, as required, under the Central Excise Act and they come under the purview of the said Act. In the present matter, the adjudication proceeding has not been finally determined in favour of the revisionists, criminal prosecution can go on simultaneously with the adjudication proceeding. Thus, from the evidence available on record, no illegality, infirmity or impropriety is found in the impugned order and it cannot be said that no prima facie case is made out against the revisionists. The findings recorded by the concerned Magistrate in the impugned order does not require interference by this Court. There is no violation of any law or rule. The order dated 28-8-2015 raising fresh demand and penalty against the revisionists is related to the same search/seizure conducted on 22-11-2007.

In view of the above discussion, the Court is of the view that the revision lacks merits and is liable to be dismissed.

The criminal revision is accordingly dismissed at this stage itself.

Interim order granted earlier stands vacated.