VAMAN RAO, J. ( 1 ) THIS petition under section 482 Cr. PC seeks quashing of the proceedings in CC No. l of 2000 on the file of the Special Judge for Economic Offence, hyderabad in which the petitioners are sought to be prosecuted for an offence under section 135 of the Customs Act 1962, for contravention of the provisions of section 111 (0) of the said Act. It would appear that the first Petitioner Company are the manufacturers of Jelly filled cables and they imported certain Machinery for the purpose of the said manufacture. The petitioners sought to take advantage of the concessional customs duty in terms of the notification No. 315 of 1983/cus, dated ( 2 ) 11. 1983 issued by the Central Board of Excise and Customs. Under this notification when the plant and equipment for the manufacture of Electronic items are imported into India, such items shall be liable for customs duty at the reduced rate of 25%. This however, is subject to the condition that an officer not lower in rank than the director in the Department of Electronics, government of India or any Industrial advisor in the Directorate General of technical Development of Government of india or Deputy Director General in the department of Telecommunications of the government of India, on being satisfied, certifies to the fact that the plant and machinery in question are required for the purpose of manufacturing electronic items. 2. It appears that in this case such a certificate was issued by the Deputy director General in the Department of telecommunications of the Government of india, who is one of the prescribed authorities under the said notification in 1993. The plant and machinery were imported in 1995. It appears that during inspection of the premises of the petitioners, it was found that the plant and machinery for the manufacture of jelly filled cables were in operation without paying the full-prescribed duty. A show-cause notice was issued thereafter on 31-3-1997 alleging that the petitioners wilfully suppressed the facts in declaring the end products as electronic in nature and thus they were required to show-cause as to why an amount of Rs. 17,11,381/- erroneously refunded should not be paid by them under proviso to Section 28 of the Customs act, 1962 and as to why an amount of rs. 9,13,890/- which was short levied should not be paid by them. 17,11,381/- erroneously refunded should not be paid by them under proviso to Section 28 of the Customs act, 1962 and as to why an amount of rs. 9,13,890/- which was short levied should not be paid by them. The show-cause notice also mentions about the payment of interest on the amount sought to be recovered. It also mentions about the penalty to be levied on the petitioners for contravention of the provisions of Section 111 (o) of the Customs act. The petitioners sent a reply to the said show-cause notice on 2-7-1997 denying that there was any wilful suppression on their part and pointing out that the competent authority in terms of the notification referred to above had certified that the jelly filled cables were electronic goods. The Commissioner of Customs did not accept this explanation submitted by the petitioners and passed an adjudication order dated 28. 11. 1997 confirming the show-cause notice. ( 3 ) IT is on this ground the petitioners are sought to be prosecuted for the offence under Section 135 of the Customs act alleging that the petitioners were in possession of the goods which are liable to be confiscated under Section 111 (o) of the customs Act. ( 4 ) SRI S. Ravi, learned Counsel for the petitioners contends that the fact that one of the competent authorities enumerated in the notification has certified that the jelly filled cables are electronic goods, and as such the plant and equipment for the manufacture of these goods, is entitled to concessional duty and this absolves the petitioners from the criminal liability under Section 135 of the Customs act. ( 5 ) SRI P. Dharmesh, the learned Special Public Prosecutor on behalf of the customs Department on the other hand contends that the jelly filled cables are manifestly not electronic goods and the mere fact that the petitioners have succeeded by misrepresentation to obtain a certificate issued by one of the authorities prescribed under the notification is not conclusive of the matter and under the circumstances, the goods are liable to be confiscated under Section 111 (o) of the customs Act and as such the prosecution of the petitioners under Section 135 of the customs Act is in order. ( 6 ) IT is seen that the petitioners are sought to be proceeded against for an offence under Section 135 (1) (b) of the Customs act. ( 6 ) IT is seen that the petitioners are sought to be proceeded against for an offence under Section 135 (1) (b) of the Customs act. The relevant provision is extracted below:- section 135. Evasion of duty or prohibitions: (1) Without prejudice to any action that may be taken under this Act, if any person :- (a ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, he shall be punishable : (i) in the case of an offence relating to any of the goods to which Section 123 applies and the market price whereof exceeds one lakh of rupees, with imprisonment for a term which may extend to seven years and with fine; provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court such imprisonment shall not be for less than three years; (ii) in any other case, with imprisonment for a term which may extend to three years or with fine or with both. Thus the essence of the offence under section 135 of the Customs Act is possession of the goods which are liable to be confiscated under Section lll (o) of the customs Act. The prosecution is required to prove that the petitioners are in possession of the goods, which are liable to be confiscated under Section 111 of the customs Act. The relevant provision of section 111 (o) reads as under : section 111. Confiscation of improperly imported goods etc. :the following goods brought from a place outside India shall be liable to confiscation:-A ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . O) any goods exempted subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non- observance of the condition was sanctioned by the proper officer; ( 7 ) SECTION 11l (o) of the Customs Act contemplates that where any goods are exempted from payment of any duty subject to certain conditions and if such exemption has been claimed without observing or fulfilling the conditions, such goods shall be liable to be confiscated. In this case, the prosecution case is that the plant and equipment for manufacturing electronic goods is liable for concessional duty subject to the condition of certification from the prescribed authority that the plant and machinery in question was meant for manufacturing electronic goods. It is not disputed that the Deputy Director General, department of Telecommunications who is one of the prescribed authorities under the notification No. 315 of 1983-Cus, dated 26-11-1983 has indeed issued a certificate that the plant and machinery imported by the petitioners was meant for manufacturing the electronic goods on the ground that the jelly filled cables can be construed as electronic goods. ( 8 ) SRI P. Dharmesh, the learned Special Public Prosecutor however, contends that the Electronics Department, government of India has communicated its opinion vide letter written by the Director. Department of Electronics to the Assistant director, Directorate of Revenue intelligence who have investigated in to the matter against the petitioners that the jelly filled cables do not satisfy the definition of electronic goods. His contention is that in view of this, the exemption obtained by or granted in favour of the petitioners from the levy of prescribed duty and levying of concessional duty is wholly on untenable grounds and as such, the goods are liable to confiscation under Section 111 (o) of the customs Act and the petitioners are liable to be prosecuted under Section 135 of the customs Act. ( 9 ) THE condition for claiming the concessional duty in respect of imported goods for manufacturing of electronic items is that an officer specified in the relevant notification No. 315/83-CUS, dated 26-11-1983 after being satisfied certifies to the effect that the goods in question are liable for Concessional duty. When once such a certificate is given, the requirement for claiming concessional duty under notification No. 315 of 1983-CUS, dated 26-11-1983 must be held to have been satisfied. In this case in the face of the certificate issued by the Deputy Director general, Department of Telecommunications, it is not open to the Customs Department to contend that the goods are not covered by the Notification No. 315 of 1983-CUS, dated 26-11-1983. If they happen to hold a different view as to the nature of the goods, it is for them to seek cancellation of the certificate issued by the prescribed authority. At any rate the order of adjudication levying penalty against the petitioners passed by the commissioner of Customs has been challenged by the petitioners before the customs, Excise and Gold Control Appellate tribunal, South Zone, Madras and the order passed by the Commissioner of Customs is said to have been stayed. Under these circumstances as of now, in the teeth of the exemption certificate granted by the competent authority prescribed under the notification, and further in the light of the fact that the confiscation orders themselves are under challenge and have been stayed, there re mains no basis for proceeding with the prosecution of the petitioners for an offence under Section 135 of the Customs act, in as much as the foundation for prosecution is that the petitioners have been in possession of the goods which were liable for confiscation under section 11 l (o) of the customs Act. Under these circumstances there appears no reason why the petitioners shall be subjected to the ordeal of trial for an offence under Section 135 of the Customs act. ( 10 ) IN the result, this petition is allowed. The proceedings in CC No. 1 of 2000 on the file of the Special Judge for Economic offences, Hyderabad shall stand quashed.