JUDGMENT
V.B. Gupta, J.
1. Both these petitions involve same question of law with almost same factual foundation. Therefore, these are being disposed of by this common judgment. Crl. M.C. No. 1108/2007
2. Brief facts of this case are that on the basis of specific information, the officers of Directorate of Revenue Intelligence (DRI) intercepted the petitioner Ajay Gulati while he was entering security lounge at departure hall of I.G.I. Airport, New Delhi on the night intervening 11/12th August, 2002. He was scheduled to travel by Flight No. TG-316 for Bangkok. As a result of detailed examination of his bag as well as his personal search, 4,500 U.S. dollars were recovered from the personal search of the petitioner while from his baggage 15,000 (Traveler s Cheque) U.S. dollars were recovered.
3. On enquiry, petitioner Ajay Gulati explained the recovery of U.S.$ 4,500 from his personal possession as amount brought by him on his arrival from Hong Kong on 2nd August, 2002.
4. In the absence of any true and proper declaration and any true legal acquisition/possession of U.S.$ 4,500, the adjudicating authority ordered absolute confiscation thereon. During the course of follow up action, his residence was searched on 12th August, 2002 and some foreign currency was also recovered from his residence. As petitioner Ajay Gulati could not produce any satisfactory documentary evidence or otherwise for legal acquisition/possession of the foreign currency, the same was ordered to be absolutely confiscated.
5. The adjudicating authority imposed a penalty of Rs. 10 lacs on the petitioner Ajay Gulati.
6. Aggrieved by the order of the adjudicating authority, appeal was filed by the petitioner Ajay Gulati before Commissioner of Customs (Appeals). However, the appeal filed by the petitioner Ajay Gulati was dismissed.
7. Thereafter, petitioner Ajay Gulati filed a revision petition under Section 35 EE of the Central Excise Act, 1944. Vide impugned order dated 30th January, 2006, the order of adjudicating authority dated 30th May, 2005 was set aside and penalty imposed on the Petitioner Ajay Gulati was set aside. Crl.M.C. No. 1109/2008
8. Both petitioners Kapil Rai and Jatin Kapoor were similarly intercepted by officers of DRI on the night intervening 11/12th August, 2002 at I.G.I Airport while they were scheduled to travel to Bangkok. As a result of detailed examination of their bags as well as personal search US$ 2,000 and 27,000 US$ (Traveler s cheque) each were recovered from their possession. In the absence of any true and proper declaration and any legal acquisition/possession of the Traveler s cheque and US Dollars recovered from the petitioners Kapil Rai and Jatin Kapoor, the adjudicating authority ordered absolute confiscation of the same. The adjudicating authority imposed a penalty of Rs. 5 lacs each upon both the petitioners. Aggrieved by the order of adjudicating authority, appeals were filed by the petitioner Kapil Rai and Jatin Kapoor before Commissioner of Customs (Appeals). However, their appeals were dismissed. Thereafter, both the petitioners filed revision petition under Section 35EE of the Central Excise Act, 1944. Vide impugned order dated 30th January, 2006, the orders of adjudicating authority dated 31st May, 2005 was set aside and penalty imposed upon both the Petitioners namely Kapil Rai and Jatin Kapoor was set aside.
9. It has been contended by learned Counsel for the petitioners that these petitioners have been absolved by the impugned order passed by Joint Secretary (Revisionary Authority) Government of India, whereby a categorical finding of facts have been recorded that petitioners have not contravened any provision of Customs Act and the same were in consonance of the provision of the Customs Act and had thereby absolved them of their liability towards the personal penalties imposed on them by the lower authorities. Further, the order passed by the Joint Secretary absolving the Petitioners has been accepted by the Government under the communication dated 21st September, 2006 whereby it has been candidly accepted that the order passed by the Joint Secretary is acceptable and consequently the penalties which were deposited as a condition of hearing the appeal were ordered to be refunded in favor of the petitioners. It is further contended that besides the adjudication proceedings, independent criminal prosecution has been initiated under Section 135(1)(a) of the Customs Act, 1962 for the same set of allegations. The Apex Court and this Court in various judgments have taken the view that although both the proceedings are initiated independently but the finding of facts recorded in adjudication proceedings shall have the direct bearing on the criminal prosecution and in case the petitioners have been discharged and absolved under the adjudication proceedings on merits, no purpose would be served by continuing the criminal prosecution on the same set of allegations. The reason being, if on the same evidence, a lower standard of proof required in adjudication proceedings has not been achieved, higher standard of proof required in a criminal trial would be incapable of being achieved.
10. Learned Counsel for the petitioners in support of his contentions has cited following judgments:
Bhavnesh Kumar v. Union of India and Ors. Crl.M (M) 2139/91 decided on 31.7.1992, G.L. Didwania v. Income Tax Officer , R.K. Goenka v. Collector of Customs and Anr. , Surkhi Lal v. Union of India, 2005 (85) DRJ 11, Standard Chartered Bank v. Directorate of Enforcement , Sunil Gulati v. R.K. Vohra 2007 (1) JCC 220,. Bihariji Mfg. Co. P. Ltd. v. Commissioner of Central Excise, Crl.M.C. 938/2005, D.K. Rastogi v. Union of India and Usha Gupta and Ors. v. Commissioner of Central Excise, Crl.M.C. 5453-54/2006 decided on 29.8.2007.
11. On the other hand, it has been argued by learned Counsel for the respondent that wherever offences are separately and independently prescribed in special legislation, it is open to authorities to proceed independently, irrespective of adjudication order and in support of its case, learned Counsel for the respondent has cited following various judgments:
Standard Chartered Bank and Ors. v. Directorate of Enforcement and Ors. 11 (2006) BC 391 (SC), Commissioner of Income Tax, Mumbai v. Bhupen Chambak Lal Dalas and Anr. Etc. 2001 II AD (SC) 545, P. Jayappan v. S.K. Perumal , Assistant Collector of Customs v. L.R. Malwani 1999 (110) ELT 317 (SC), Santram Paper Mills v. Collector of Central Excise , Sadhana Jain v. P.Sudhir 109 (2004) DLT 769 (Delhi High Court), Sunil Mehdiratta v. UOI 2002 JCC 247 (DHC),. Bandhu Machinery Pvt. Ltd. v. Addl. Chief Metropolitan Magistrate, Crl.830/2001 decided on 13.2.2002, N. Neelakanta Rao v. State of Andhra Pradesh .
12. A somewhat similar question arose in recent case decided by this Court in Crl. M.C. No. 938/05,. Bihariji Mfg. Co. P. Ltd. v. Commissioner of Central Excise (supra).
13. In that case, the allegations against the petitioners were that they indulged in clandestine removal of manufactured goods exceeding rupees one crore and the petitioners were liable to pay excise duty. The adjudicating order was passed against the petitioners by Commissioner of Central Excise. Aggrieved against that order they preferred appeals to the Customs, Excise and Service Tax Appellate Tribunal and the Tribunal allowed the appeals and held inter-alia that no materials were produced nor was there anything brought on record to show that the goods were actually cleared by the petitioners. On the basis of findings and order of the Tribunal (which it is stated, has become final), the petitioners claimed that it was not open for respondent to proceed with the criminal complaint any longer.
14. This Court after taking note of various decisions of Apex Court held that principles which can be culled out from the various judgments, when all the judgments are read out harmoniously, would be following:
1. On the same violation alleged against a person, if adjudication proceedings as well as criminal proceedings are permissible, both can be initiated simultaneously. For initiating criminal proceedings on does not have to wait for the outcome of the adjudication proceedings as the two proceedings are independent in nature.
2. The findings in the departmental proceedings would not amount to resjudicata and initiation of criminal proceedings in these circumstances can be treated as double jeopardy as they are not in the nature of Prosecution.
3. In case adjudication proceedings are decided against a person who is facing prosecution as well and the Tribunal has also upheld the findings of the adjudicators/assessing authority, that would have no bearing on the criminal proceedings and the criminal proceedings are to be determined on its own merits in accordance with law, uninhibited by the findings of the Tribunal. It is because of the reason that in so far as criminal action is concerned, it has to be proved as per the strict standards fixed for criminal cases before the criminal court by producing necessary evidence.
4. In case of converse situation namely where the accused persons are exonerated by the competent authorities/Tribunal in adjudication proceedings, one will have to see that reasons for such exoneration to determine whether these criminal proceedings could still continue. If the exoneration in departmental adjudication is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and it is found that allegations are not substantiated at all and the concerned persons(s) is/are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious; criminal complaint is filed by the departmental authorities alleging violation/ contravention of the provisions of the Act on the part of the accused persons. However, if the departmental authorities themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the departmental proceedings that ex-facie there is no such violation. The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are identical and the exoneration of the concerned person in the departmental proceedings is on merits holding that there is no contravention of the provisions of any Act.
5. The above narrative would show that show cause notice as well as the complaint are premised on identical facts, namely, clandestine and illegal removal without disclosure to the Central Excise Authorities by the petitioners. Though the first round went in favor of the Department in as much as adjudication by the Commissioner fastened liability upon the petitioners, those findings were reversed by the Tribunal, which categorically and unambiguously recorded that there were no materials recovered to prove the charge of clandestine removal, or that evasion of duty stood established. In these circumstances, I am of the opinion that on application of the rule enunciated in Sunil Gulati s case, (particularly, the latter portion of proposition (4) quoted above, i.e. exoneration of the assessed being on merits, and not on a technicality) further proceedings in the criminal complaint would not sub-serve ends of justice.
15. Similarly, when the highest Appellate Authority in the present case has also absolved these petitioners on merits, no useful purpose will served by continuing the criminal proceedings on the same set of allegations.
16. Various judgments cited by learned Counsel for respondent, in the facts and circumstances of the present case are not applicable.
17. Accordingly, both the petitions are allowed and the criminal complaint case No. 995/1 dated 10th January, 2002 titled as DRI v. Ajay Gulati and Ors. pending in the Court of ACMM, Patiala House, New Delhi, qua the present petitioners namely Ajay Gulati, Kapil Rai and Jatin Kapoor is hereby quashed.
18. Copy of this order be sent to the Trial Court.