IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JULY, 2019 BEFORE THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION No. 5103 /2015 BETWEEN:
1. M/s.Rachana Rubbers (P) Ltd. KIADB Industrial Area, Plot No.82, P1, Nanjangud-571302.
Also at No.658, 12th Cross, M.C.Layout, Vijayanagar, Bengaluru – 560 040.
Represented by B.S.Siddalingaswamy Chairman cum Managing Director, M/s.Rachana Rubbers (P) Ltd.
2. B.S.Siddalingaswamy S/o Shivalingaiah, Aged about 56 years, Residing at No.15, 3rd Cross, Mahajan High School Road, Jayalakshmipuram, Mysore – 570 012.
(By Sri.M.S.Venugopal, Advocate) AND:
The Assistant Commissioner Central Excise, Mysore – III Division, ... Petitioners Office of the Commissioner of Central Excise S-1 and S-2, Vinaya Marga, Siddarthanagar, Mysore – 570 011.
(By Sri.C.Shashikanta, CGC) ... Respondent This Criminal Petition is filed under Section 482 of Cr.P.C praying to quash the entire proceedings in CC No.342/2014 pending on the file of the Spl.Court for Economic Offences, Bengaluru by allowing the petition.
This Criminal petition coming on for Admission, this day, the Court made the following:
O R D E R Heard learned counsel for petitioners and learned counsel for respondent.
2. Prosecution is launched against the petitioners for violation of Sections 9(i)(b) and 9AA of the Central Excise Act, 1944. The allegation against the petitioners is that on scrutiny of CD Account No.11318 of M/s.PRC and 40069 of M/s.SRC indicated that a total amount of Rs.4,12,34,880/- has flown directly or indirectly from M/s.PRC and SRC to the accused. During the year 2003-04 the total value of sale made by the Accused to units SRC and PRC in respect of PCTR, Bonding Gum and BVC is Rs.2,54,94,069/- (Rupees two crores fifty four lakhs ninety four thousand and sixty nine only), therefore, the amount receivable by the accused from the above two units for sale of goods is Rs.2,54,94,069/- (Rupees two crores fifty four lakhs ninety four thousand and sixty nine only) against which the two units have made payment of Rs.2,80,14,835/- towards the purchase of raw materials to the suppliers on behalf of the accused. All these financial transactions revealed that there is a flow of sale proceeds of units PCR and SRC to the accused.
3. It is stated in the complaint that in respect of above voilation adjudication proceedings were commenced and the order passed by the Commissioner of Central Excise dated 30.03.2007 has been challenged before the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bengaluru and by order dated 26.04.2010 in Appeal No.E/992, 1027, 1028/2009 (Stay order numbers 302 to 304/2010) the operation of the order dated 30.03.2007 has been stayed. In para 4 of the order dated 26.04.2010 it is observed as under :
“On careful consideration of the submissions made by both sides and perusal of the records, we notice that vide order No.127/2005 dated 5/1/2007, the Board for Industrial and Financial Reconstruction has declared the appellant as sick unit and despite that they have deposited Rs.2 lakhs as ordered by the Id. Commissioner (Appeals). We consider that this amount as enough deposit to hear and dispose the appeals. Applications for waiver of pre-deposit of the balance amounts involved are allowed and recovery thereof stayed till appeals are disposed off.”
4. In view of the said order, the very basis for the prosecution of the petitioner having been taken away for the present, to secure the ends of justice, further proceedings in CC No.342/2014 pending on the file of the Special Court for Economic Offences, Bengaluru are quashed, reserving liberty to the respondent to take further action as per law, subject to the decision of Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bengaluru in Appeal No.E/992, 1027, 1028/2009.
With these observations, the petition is disposed of.
Sd/- JUDGE UN