- (1.) HEARD Sri Swetashwa Agarwal, learned counsel for the applicants, Sri B.K.S. Raghuwansi, learned counsel for the Union of India and perused the record. The instant petition has been filed for quashing of the criminal proceeding of Complaint Case No. 416/9 of 2011, Union of India Vs. M/s. Apollo Pipes Private Limited and others whereby the cognizance has been taken by the learned Special Chief Judicial Magistrate, Meerut on 16.3.2011 against the applicants under Sections 9 and 9-AA of the Central Excise Act, 1994, police station Sikandrabad, Division Deputy Commissioner, (A.E.) Central Excise, Noida.
(2.) A complaint was filed on 16.3.2011 by the opposite party no.1 Sashi Kant, Deputy Commissioner (A.E.) Central Excise, NOIDA before the court of Special Chief Judicial Magistrate, Meerut with the allegation that the applicant Sameer Gupta, Director and N.S. Rana General Manager of M/s. Apollo Pipes Private Limited, D-20, & E-6, Industrial Area, Sikandrabad, Bulandshahr (hereinafter referred to as APPL) have evaded central excise duty during the period December 2004 to February 2007 causing loss to the tune of Rs. 34,02,303.00. The applicants are engaged in the manufacturing of PVC pipes and fittings under Central Excise Tariff Act, 1985 and removed the manufactured goods clandestinely, which are subject to excise duty without payment of central excise duty leviable thereon. When the officers of the Central Excise Anti Evasion, Branch Noida visited the factory premises in 2007 the stocks were verified and physical verification of stock of finished goods was done. The officers of the factory had shown some excise invoices like weighment tickets of Jain Dharam Kanta but on the scrutiny of the said documents it was found that they had cleared quantity of goods clandestinely hence a show cause notice was issued against them on 18.7.2008. The Additional Commissioner, Customs Central Excise & Service Tax Noida on 12.5.2010 confirmed demand and imposed penalty of Rs. 34,02,303.00 and interest and imposed personal penalty of Rs. 40,000.00 on Sameer Gupta and Rs. 25,000.00 on Sri N.S. Rana of APPL. The applicants preferred an appeal against the aforesaid order before the Commissioner (Appeals) Customs & Central Excise, Noida. The appeal was rejected on 23.7.2010. It is mentioned in the complaint that the statement of Sameer Gupta the Director (the present applicant) and N.S. Rana the General Manager of APPL were recorded and who were responsible for the non-observance of the procedure of the Central Excise Act and Rules for not maintaining proper records and accounts to evade the payment of central excise and on account of their act and omission they are wholly responsible and liable to be prosecuted under the Central Excise Act, 1944 and Rules and to pay interest. The complaint was registered on the same day i.e. on 16.3.2011 as Case No. 416 of 2011. The learned Magistrate after perusing the documentary evidence in support of the complaint filed by the opposite party no.1 found that prima facie offence is made out against the applicants and Sri N.S. Rana hence took the cognizance of the offence and issued summons fixing 15.4.2011 for their appearance.
(3.) THE submission of the learned counsel for the applicants is that the learned Magistrate has not applied his judicial mind to the facts and circumstances of the case and proceeded mechanically in a routine manner by taking cognizance against the applicants straightway. No prima facie offence is made out under Sections 9 and 9-AA of the Central Excise Act as the basic ingredients to constitute such offence is lacking in the complaint itself. There was no evasion of any excise duty. Prior to the issuance of show cause notice the disputed amount of excise duty as mentioned in the complaint had already been deposited by the applicants on 28.2.2007 and 19.3.2007. This fact is evident from the record itself and has been categorically stated in para 17 of the affidavit filed in support of the instant application. The order of Original demand dated 26.2.2010 was challenged before the Commissioner Appeals which was rejected in arbitrary manner. The Appellate Tribunal, Customs Excise and Service Tax at New Delhi has granted indulgence by granting interim order in favour of the applicants on 9.7.2010 hence the disputed amount of liability, if any, is sub judiced before the Tribunal, therefore, no criminal prosecution could have been launched against the applicants alleging therein about the evasion of excise tax. The summoning order passed against the applicants is a non-speaking order, which is against the dictum of law laid down by Hon'ble Apex Court in Fakhruddin Vs. State of Uttranchal reported in 2008 (17) SCC page 157. To prop up his further submission the learned counsel for the applicants has relied upon the decision of Central Excise and Service Tax appellate Tribunal, New Delhi in C.C.E. Delhi-III, Gurgaon Vs. M/s. Machino Montell (I) Ltd. wherein it is held that if the disputed duty has been paid by the party even before the issuance of show cause notice this would show that there was no question of any fraud, misrepresentation or suppression of facts, then penalty should not be imposed under Section 11-A and interest under Section 11-C should not be levied and the decision of the Apex Court reported in 1995 (Supp.) (2) SCC 724 G.L. Didwaniya and another Vs. Income Tax Officer and another where the criminal prosecution was quashed. It has further been argued that the prosecution of the applicants have been launched after lapse of prescribed period of limitation. For the sake of repetition it has been contended by the learned counsel for the applicants that prior to the issuance of the notice dated 18.7.2008 the entire amount of tax have been deposited by the applicants, which was intimated by applicant no. 1 vide letter dated 3.8.2007 yet the complaint has been filed in respect of tax evasion after lapse of four years in 2011 and the cognizance has also been taken by the learned Magistrate summoning the applicants to face trial without following the procedure of complaint case, therefore, the initiation of proceeding is an abuse of the process of Code as well as law hence liable to be quashed.;