Shri Digvijay Cement Co. Ltd. vs State of Gujarat

Leave to amendment.

The present application is filed u/s 482 of the Criminal Procedure Code with a prayer that the criminal prosecution launched against the petitioner being criminal case No. 786/85 pending in the Court of the learned Judicial Magistrate, First class (Addl.) rural at Narol, be quashed. In the alternative it is also prayed to stay the further proceedings in the said criminal case, pending hearing and final disposal of the appeal No. ED (SB) (A) No. 7542/84-C pending before the Customs, Excise and Gold (Control) Appellate Tribunal at New Delhi.

It may be stated at the outset that Mr. Trivedi, the learned Advocate for the petitioner does not press the prayer for quashing the proceedings, but he presses the relief for the stay of the proceedings.

The short facts of the case are that the present petitioner is a company carrying on the business of manufacturing and selling cement classifiable under the erstwhile Tariff Item No. 23 of the 1st Schedule to the Central Excises and Salt Act, 1944 and accordingly he has obtained Central Excise licence number in form No. L4 as required u/s 6 of the Act read with relevant rules. Since its inception, the petitioner company has been filing necessary classification list as required under Rule 173B of the Rules and also has been filing price list as required under Rule 173C of the rules and has been following all the necessary procedures under various provisions of the Act and the Rules during the relevant period, namely, from July 1976 to December 1977.

However, to the utter surprise of the petitioner they received a notice to show cause No. MP/23/DCC/79/43 dated 25-4-1979 calling upon the applicant-company to show cause to the Assistant Collector of Central Excise, Divn. III, Ahmedabad as to why duty as narrated in Annexure-A therein should not be levied under Rule 10 of the Rules. Subsequently, another show cause notice dated 26-6-1979 was also issued by the Collector of Central Excise, Baroda. It is the say of the Central Excise authority that they are liable to make the payment of duty on rapid hardening cement to the tune of Rs. 21,58,340 and further in the said show cause notice it was stated as to why penalty u/s 173 should not be imposed upon it. The petitioner company filed a reply. The said proceedings came to be transferred to the Ahmedabad Collectorate and the notice to show cause was adjudicated upon by the collector of Central Excise, Ahmedabad. The Collector of Central Excise, Ahmedabad passed on an order in original No. 20/Collr. /1984 dated 30-8-1984 confirming the order of duty of central excise to the tune as aforesaid and also imposed a penalty of Rs. 10.00 lacs on the petitioner.

Being aggrieved by the aforesaid order the petitioner has preferred an appeal and also a stay application before the Customs, Excise and Gold (Control) Appellate Tribunal and it is pending. In the stay application the said Tribunal has passed an order directing the petitioner to deposit 25% of the duty adjudged as due with the concerned Collector and also directing the petitioner to furnish to the satisfaction of the Collector a Bank guarantee for the balance amount and they were also directed to comply with the above directions within a period of six weeks. The said order as it appears from Annexure-C to the petition, is dated 10-1-1985 and on that condition the recovery of the penalty imposed on the petitioner was stayed and also dispensed with its predeposit, pending and hearing of the appeal. Mr. Trivedi states that the petitioner has already complied with the conditions of the stay order.

Mr. Trivedi for the petitioner states that he undertakes to file an application before the said Tribunal for early hearing of the said appeal as it is already listed for final hearing and most probably he hopes that the appeal will be disposed of before the end of this year.

The present complaint which is filed, is with regard to the non-compliance of the order passed by the Collector adjudicating the duty payable by the petitioner and also the penalty imposed on it.

Now, when the matter is pending before the Tribunal the possibility of allowing the appeal cannot be ruled out; and if that is so, possibly, the petitioner cannot be said to have committed any offence and it is in the interest of justice to stay the proceedings of original case No. 786/85 pending in the court of the Judicial Magistrate, First-class, Additional (Rural) at Narol till the hearing of the aforesaid appeal, pending in the Tribunal. The application is allowed for the stay of the criminal proceedings as stated above. Rule is made absolute accordingly.