CRIMINAL MISCELLENEOUS NO. 11282 OF 2005 with CRIMINAL MISCELLENEOUS NO.56343 oF 2006 with CRIMINAL MISCELLENEOUS NO.13705 OF 2007 with CRIMINAL MISCELLENEOUS NO.24956 OF 2007 with CRIMINAL MISCELLENEOUS NO.24968 OF 2007 with CRIMINAL MISCELLENEOUS NO.24980 oF 2007 ***** ( In the matter of applications under Section 482 of the Code of Criminal Procedure,1973 ) ****** SRI. F. R. VEVAINA, SON OF LATE DR. RUSTOM COOVERJI VEVAINA, THE JACKERS # 8, 113, CARTER ROAD, BANDRA (WEST), MUMBAI – 4000050 …………..……..PETITIONER (In Cr. Misc. 11282/05, 56343/06 & 13705/07) WITH SRI S. K. MEHTA, SON OF LATE P. N. MEHTA, A-93, NEETIBAGH, POLICE STATION NEETIBAGH, NEW DELHI -110049 …………..……..PETITIONER (In Cr. Misc. 24956/07, 24968/07 & 24980/07) VERSUS 1. THE UNION OF INDIA 2. THE STATE OF BIHAR 3. THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, BHAGALPUR DIVISION ………………..………..……………………OPPOSITE PARTIES (IN ALL CASES) ******************** FOR THE PETITIONERS :- MR. BIBHUTI PD. PANDEY, SR. ADV. (IN ALL CASES) MR. RANJIT K. DAS, ADVOCATE MR. ROHITABH DAS, ADVOCATE FOR THE S T A T E :- MR. JHARKHANDI UPADHYAY, A.P.P. FOR O.P.NO. 3 :- MR. P. L. JAISWAL, C.G.C. (In Cr. Misc. 11282/05) FOR O.P. NO. 3 :- MRS. NIVEDITA NIRVIKAR, SR.S.C. ********** P R E S E N T THE HON'BLE JUSTICE SMT. SHEEMA ALI KHAN 2 O R D E R Sheema Ali Khan, J. The petitioner is aggrieved by the order dated 20.11.2004 by which the learned Special Judge, Economic Offences, Patna has refused the application for discharge under Section 245 of the Code of Criminal Procedure for the offences allegedly to have been committed under Section 9 (1) (b) (c) (d) of the Central Excise Act, 1944 (earlier known as Central Excise and Salt Act). 2. The Director General, Investigation vide order no. 01 of 1986 held that assessable value of cigarettes have to be determined in accordance with rule 5 of the Central Excise Act and thereafter raised a demand of Rs. 1,12,76,000/- M/s Indian Tobacco Company Limited then on 25.07.1986 paid the said amount. Thereafter, several attempts were raised which kept mounting up and were finally held to be Rs. 9,41,86,883.29/-. Out of the entire Rs. 9 crores and odd, Rs. 1,12,76,000/- was shown to be paid by the company and the rest was shown to be due. The petitioner challenged the demand raised on behalf of Central Excise Department by filing CWJC No. 1713 of 1990. In this writ application, the High Court allowed the petitioner’s prayer to the extent that the respondents were asked to issue a show cause to the petitioner to determine 3 whether the additional amount of excise duty charged for the relevant period was justified or not. The Central Excise Department moved before the Supreme Court and by that time, the matter can be taken. The proceedings then initiated, show cause was issued to the petitioner and they had appeared and file their claims. The matter was decided against the petitioners. They filed an appeal under Section 35 A of the Central Excise Act and finally in the appeal, the Commissioner, Central Excise, Patna came to the following conclusion. “14. In view of the findings as made by the CEGAT as well as by the Apex Court, I hold that additional amounts received by the assessee, will require t6o be included in the whole sale price and not in the assessable value, for the purpose of charging Central Excise duty under the provisions of Rule 5 of the erstwhile valuation Rules 1975. Since the said demand had surfaced only due to addition of additional amount in the assessable value itself, instead of adding to whole sale price, the said demand i.e. demand for Rs. 8,29,10,883.25/- is not maintainable and sustainable on merit itself. It has to be therefore, dropped. There are no other points or issues of stake which need findings and determination of money value in whole sale price of 4 the cigarettes for the relevant period and recovery of the differential duty is concerned, that exercise has already been done and the differential amount has already been paid by M.s I.T.C. as stands recorded at ….para 4 (supra).” 3. The chart of the cases pending before this Court which refers to the complaint case, the period for which the demand was raised, the amount of demand and the date of cognizance is given in the chart below. Case No. Complaint case no. Period Amount Date of cognizan ce Cr Misc. No. 11282/ 2005 151 (C)/ 95 1.10.75 to 31.12.75 49,818/- 5.7.95 Cr Misc. No. 56343/ 2006 152 (C)/ 1995 1976 24,72,378/- 5.7.95 Cr Misc. No. 13705/ 2007 153 (C)/ 1995 1977 14,71,001.1 3/- 5.7.1995 Cr. Misc. No. 24956/ 2007 157 (C)/ 1995 1981 4,10,55,645. 42/- 5.7.1995 Cr. Misc. No. 24980/ 2007 158 (C)/ 1995 1982 2,32,24,795. 05/- 5.7.1995 Cr. Misc. No. 24968/ 2007 159 (C)/ 1995 1983 (up to 28.02.83 ) 53,59,849.6 1/- 5.7.1995 (A) AMOUNT BEFORE HIGH COURT 7,36,33,487.35 5 154(C)/95 1978 14,39,164.47 155 (C)/ 95 1979 24,19,221.83 156(C)/95 1980 1,66,95,009. 39 (B)AMOUNT NOT BEFORE HIGH COURT 2,05,53,395.69 TOTAL AMOUNT INVOLVED (A + B) 9,41,86,883.04 4. The allegation against the petitioner is that there were a deviation of the marketing penalty laid down under rule 4 (1) which is spelt out under the various sub rules of Section 4 in accounting for the price of the sold item. It is alleged that the accused manufactured the price structure of the cigarette in the factory at Munger with a view to lower the assessable fine and evade central excise duty by showing some portion of the price as post manufacturing cost and post manufacturing profit and some portion as expenses incurred by the so called wholesale dealers. The petitioners challenged the demand made on behalf of the Central Excise and in appeal under Section 35 A of the Central Excise Act, the order by which the demand was made, was not substantiated. The Commissioner has held that in fact there was no demand against the petitioner. 5. While the proceedings before the Supreme Court was pending, the Department had filed Criminal case 6 against the Company and its then Directors, alleging that they had tried to evade the payment of excise duty amounting to Rs. 8.29 crores. I may state here that criminal case were also lodged at Kanpur and Bangalore. It is submitted that as far as matters pending in Kanpur are concerned, they have been dropped against the Officials of the Company, similarly, the matter pending in Banglore Court has also been quashed by the High Court. In view of the aforesaid facts, this Court comes to the conclusion that if a demand is raised, the person against whom it is raised, has a right to justify the payment of excise duty before the authorities concerned,. There is also a right to appeal. Once, an incumbent has exhausted its legal remedies provided in the Statute and the authorities have come to a finding that there is an evasion of payment of excise duty or that the incumbent has mis- calculated or has acted in a manner contrary to the provisions of the law, it would perhaps justify certain action taken by the authority, including the lodging of the criminal cases, wherein the authorities in question can show that the intention of the incumbent was not to pay the excise duty to the Central Government or the State Government, as the case may be. 6. In the present facts, the Company immediately paid the demand when it was first raised in the year 7 1986. In the subsequent years, the demand was increased over period to time. Ultimately, the demand raised was dropped on the ground that it was not taxable and the calculation had not been correctly made. 7. Once, the authority, who is competent to raise a demand, comes to a conclusion that there has been a miscalculation by the authority or that the excise duty to the tune of Rs. 8,29,10,883.29/- is not chargeable and the entire payment has been dropped, it cannot be said that the petitioner would be charged with the criminal intention of deliberate withholding the payment of excise duty to the Union of India. 8. In the result, the impugned orders refusing to discharge the petitioners in Complaint Case Nos. 151C of 1995, 152 C of 1995, 153C of 1995, 157C of 1995, 158C of 1995 and 159C of 1995 is quashed. 9. These applications are accordingly allowed. ( Sheema Ali Khan, J. ) PATNA HIGH COURT DATED, THE 28th FEBRUARY, 2011 N.A.F.R./ANAND