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2015 DIGILAW 143 (JHR)

Tata Motors Ltd. v. State of Jharkhand

2015-02-02

RONGON MUKHOPADHYAY

body2015
Judgment Heard Mr. V.P. Singh, learned senior counsel appearing on behalf of the petitioners and Mr. Shekhar Sinha, learned counsel appearing for the State. 2. In this application, the petitioners have prayed for quashing the entire criminal proceeding in connection with C/2 (Excise) Case No. 01 of 2003 including the order dated 10.07.2003 passed by the learned Special Judge (Economic Offence), Jamshedpur, whereby and whereunder, cognizance has been taken for the offences punishable u/s 9 read with Section 9(AA) of the Central Excise Act, 1944. 3. It appears that a complaint case was lodged by the Assistant Commissioner, Central Excise Division II, Jamshedpur being, the complainant (opposite party No. 2 herein), in which it was alleged, inter alia, that the petitioner No. 1 (the company) was asked by the Department of Central Excise (for short the Department) to furnish the prices charged from the Regional Sales Offices (RSOs) on sales of different models of Motor Vehicle Chassis (MVC) and other information for assessment of excise duty of MVCs, but the company did not furnish information and the Department had approved prices lists provisionally and assessment of the Companies MVCs manufactured and removed since April, 1981, were made provisionally. It was stated therein that the petitioner company in order to stall the investigation for final assessment, filed a writ petition being CWJC No. 802 of 1988 (R) before the Patna High Court (Ranchi Bench) and the same was allowed and it was held that the excise department could not call for information on prices charged from RSOs as the same were not relevant for passing final orders. However, the Hon'ble Court further directed to pass final orders on the basis of the given price lists. It also stated in the complaint petition that being aggrieved by the order passed in CWJC No. 802 of 1988, the Department preferred an appeal before the Hon'ble Supreme Court. The Hon'ble Supreme Court was pleased to set aside the said order of High Court vide order dated 10.11.1997 and it was observed that the Assistant Collector is entitled to complete the assessment as he thinks fit in exercise of his judgment and according to his understanding of the law and facts. The Hon'ble Supreme Court was pleased to set aside the said order of High Court vide order dated 10.11.1997 and it was observed that the Assistant Collector is entitled to complete the assessment as he thinks fit in exercise of his judgment and according to his understanding of the law and facts. Based on the order of the Hon'ble Supreme Court, investigation was initiated by the Department for obtaining relevant information and documents of the company for finalizing the assessment which remained provisional since the year 1981. It has been alleged that inspite of repeated approaches, the company in connivance with its officials delayed the investigation. It was also alleged that an investigation was conducted by the Department and the amount of central excise and the automobile cess evaded by the company was assessed and quantified. It was also alleged in the complaint petition that the petitioner No. 1, the company in connivance with the other accused persons who were its officials had suppressed and mis-declared the relevant facts and as such under assessed the excise duty of the MVCs for the period 1981 to 1998. On conclusion of the investigation and on receipt of the investigation report, the department issued demand-cum-show cause notice to the accused persons on 8.3.2001 to which reply was submitted on 10.5.2001, requesting the Commissioner, Central Excise, Jamshedpur to adjudicate the case himself as the amount involved was very high. The Commissioner, Central Excise, Jamshedpur after hearing the parties and considering all the facts on record, adjudicated the matter and assessed the amount and confirmed the complainant's demand for Rs. 1,53,43,68,025/- and ordered to recover the same from the accused No. 1 and also imposed a penalty of Rs. 1,53,43,68,025/-. Therefore, it was alleged by the complainant that the petitioner No. 1/company and its officials had meticulously planned to undervalue the finished goods and deliberately and willfully suppressed material facts during the investigation and thus have violated the provisions of rules 9, 52(A), 173(C), 173(F) and 173(G) of the Central Excise Rules 1944, thereby committing offence punishable u/s 9 of the Central Excise Act, 1944. 4. After the complaint was filed, a detailed order was passed on 10.7.2003 by the learned Special Judge (Economic Offence), Jamshedpur in C/2 Case No. 1/2003, whereby and whereunder, cognizance was taken for the offence punishable u/s 9 of the r/w Section 9(AA) of the Central Excise act, 1944. 5. 4. After the complaint was filed, a detailed order was passed on 10.7.2003 by the learned Special Judge (Economic Offence), Jamshedpur in C/2 Case No. 1/2003, whereby and whereunder, cognizance was taken for the offence punishable u/s 9 of the r/w Section 9(AA) of the Central Excise act, 1944. 5. The learned counsel for the petitioner has assailed the impugned order and submitted that the petitioner/ company has filed a writ petition being CWJC No. 704 of 1976 against the action of the Excise Department calling for information in which a direction was sought for from the Department to pass final order on the basis of given price lists and further Excise Department again called for information on prices charged from RSO as the same was relevant for passing the final assessment order. The said writ petition was allowed by the High Court on 5.1.1977 and the said order was affirmed up to the Hon'ble Supreme Court. Subsequently, on account of the fact that provisional assessment was being made with respect to the excise duties of MVCs, the petitioner/ company preferred another writ petition being CWJC No. 802 of 1988(R) for direction upon the Department of Central Excise for final assessment of the duties and not to assess provisionally. The said writ petition was allowed. However, the Department moved before the Hon'ble Supreme Court, as has been mentioned in the complaint petition, and a direction was given therein that the Assistant Collector was entitled to complete the assessment as he thinks fit in exercise of his judgment and according to his understanding of the law and facts. Learned senior counsel further submits that in fact, the order which was passed by the Commissioner, Central Excise, Jamshedpur levying an excise duty as well as the penalty upon the accused No. 1/company and separate penalty upon the accused No. 2 to 5 (petitioners No. 2 to 5) was challenged by the petitioner/ company before the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai in Appeal No. E/443, 530, 533, 532, 531/02-MUM and in the said appeal, a composite order was passed on 9.9.2003 and the penalties imposed upon the petitioner/company as well as its officers by the Commissioner, Central Excise, Jamshedpur was set aside. It has further been submitted by the learned senior counsel for the petitioner that after the order of the Commissioner, Central Excise, Jamshedpur was challenged before the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai, there was an interim order of stay on 28.11.2002 and in view of the said order, the department was precluded from filing a complaint case which was the subject mater of adjudication before the appellate tribunal. 6. After hearing the learned senior counsel for the petitioners and the learned counsel for the State, it appears that with respect to the demand of excise duty on final assessment and penalty upon the petitioner/ company and its officials who have been arrayed as an accused, a complaint case was lodged and the said order was also the subject mater of the appeal before the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai. The appellate tribunal as has been indicated above had set aside the order of the Commissioner, Central Excise, Jamshedpur dated 8.9.2003 and the relevant portion of the order is quoted hereunder:- "16. The interest levied under Section 11AB of the central Excise Act and penalty under Rule 173Q imposed upon the appellants company as also the penalties imposed upon the other persons under Rule 198 are set aside in view of our above findings." 7. It would seem that the very basis of the enquiry of the complaint case i.e. the final assessment of excise duty and the penalty imposed upon the accused persons have already been set aside by the Appellate Tribunal as has been quoted above. Moreover in the counter affidavit which has been filed by the opposite party No. 2, the fact that the allegations in the complaint petition and the case before the Appellate Tribunal was the same, which was not denied in the counter affidavit as would be evident from reading of Paragraph-10 of the same:- "10. That in reply to paragraph-6 to 26 of the Criminal Miscellaneous Petition, it is stated ad submitted that the petitioners in these para have defended their case taking plea that they are not guilty and they have done everything as per Central Excise Law. That in reply to paragraph-6 to 26 of the Criminal Miscellaneous Petition, it is stated ad submitted that the petitioners in these para have defended their case taking plea that they are not guilty and they have done everything as per Central Excise Law. The answering respondent avers in this regard that the Central board of Excise & customs has decided not to file appeal against the Tribunal's order in this case as stated herein above. Therefore, under the above facts ad circumstances of the case, the department is not inclined to pursue the matter any further against the petitioners; and the Hon'ble Court may kindly consider to pass orders as deemed fit." 8. Therefore, the department also admits that when the very basis of complaint case has already been set aside by the Appellate Tribunal, the complaint becomes devoid of any substance. In this case reference may be made to the case of G.L. Didwania and another v. Income Tax Officer and another reported in 1995 Supp (2) SCC 724, wherein the matter related to assessment under the Income Tax Act for which a criminal proceeding was also instituted and the Appellate Tribunal having set aside the assessment, the Hon’ble Supreme Court in the context of pending criminal case held as follows:- “4. In the instant case, the crux of the matter is attracted and whether the prosecution can be sustained in view of the order passed by the tribunal. As noted above, the assessing authority held that the appellant-assessee made a false statement in respect of income of M/s Young India and Transport Company and that finding has been set aside by the Income Tax Appellate Tribunal. If that is the position then we are unable to see as to how criminal proceedings can be sustained.” 9. In view of what has been discussed, I do find merit in this application. This application is accordingly allowed and the entire criminal proceeding in connection with C/2 (Excise) Case No. 01 of 2003 including the order dated 10.07.2003 passed by the learned Special Judge (Economic Offence), Jamshedpur, whereby and whereunder, cognizance has been taken for the offences punishable u/s 9 read with Section 9(AA) of the Central Excise Act, 1944 is quashed.