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1993 Supreme(P&H) 591
PUNJAB & HARYANA HIGH COURT
Jai Singh Sekhon, J.
K.C.Vanaspati
Versus
Asstt Collector Of C.Ex.And Cus.
Criminal Miscellaneous No. 4237 of 1990,
Decided On : AUGUST 16, 1993
The territorial jurisdiction of the Courts is determined by the place where the offence was committed. The Assistant Collector (Audit) is empowered to file a complaint and issue a requisition for producing the record under Section 14 of the Central Excises and Salt Act, 1944. The documents summoned must be relevant to the inquiry. The production of documents after the filing of the complaint is of no consequence as the refusal to produce the documents is a continuing offence. The trial court must apply its mind to the facts and circumstances of the case before summoning the accused.
Headnote:
CENTRAL EXCISE ACT - SUMMONS FOR PRODUCTION OF DOCUMENTS - JURISDICTION - TERRITORIAL JURISDICTION OF COURTS AT CHANDIGARH - POWER OF ASSISTANT COLLECTOR (AUDIT) TO FILE COMPLAINT - RELEVANCE OF DOCUMENTS SUMMONED - PRODUCTION OF DOCUMENTS BEFORE AUDIT AUTHORITIES - APPLICATION OF MIND BY TRIAL COURT - QUASHING OF SUMMONING ORDER.
Fact of the Case:
The petitioner, a registered firm engaged in the manufacture of vegetable products, was accused of recovering additional amounts from dealers over and above the control price and not paying Central Excise duty on those additional charges. The audit party detected that the firm had changed its modus operandi and was issuing debit notes to dealers in lieu of distribution charges and levies. The firm failed to produce the relevant records despite summons and notices. A complaint was filed against the petitioner and other accused for the offence under Section 9 of the Central Excises and Salt Act, 1944.
Finding of the Court:
The court held that the Courts at Chandigarh had jurisdiction to take cognizance of the offence as the summons were issued from Chandigarh and the accused failed to produce the records there. The Assistant Collector (Audit) was empowered to file a complaint and issue a requisition for producing the record under Section 14 of the Act. The documents summoned were relevant to the inquiry and not a fishing inquiry. The production of documents after the filing of the complaint was of no consequence. The trial court failed to apply its mind to the facts and circumstances of the case before summoning the accused.
Issues: 1. Whether the Courts at Chandigarh had jurisdiction to take cognizance of the offence? 2. Whether the Assistant Collector (Audit) was empowered to file a complaint and issue a requisition for producing the record? 3. Whether the documents summoned were relevant to the inquiry? 4. Whether the production of documents after the filing of the complaint absolved the accused of the offence? 5. Whether the trial court applied its mind to the facts and circumstances of the case before summoning the accused?
Ratio Decidendi: 1. The territorial jurisdiction of the Courts is determined by the place where the offence was committed. In this case, the offence of refusing to produce the records was committed at Chandigarh where the summons were issued and the accused failed to produce the records. 2. Section 14 of the Central Excises and Salt Act, 1944 empowers the Collector to summon any assessee to produce the record at any place within the jurisdiction of the Collector. 3. The documents summoned were relevant to the inquiry as they were necessary to determine the assessable value of the goods. 4. The production of documents after the filing of the complaint was of no consequence as the refusal to produce the documents is a continuing offence. 5. The trial court failed to apply its mind to the facts and circumstances of the case before summoning the accused. The court concluded that the accused had defaulted in making payment of excise duty and avoided service without considering the specific averments in the complaint.
Final Decision: The court quashed the summoning order and resultant proceedings on the ground of non-application of mind by the trial court. The trial court was directed to pass a fresh order after due application of mind in accordance with law regarding the summoning or non-summoning of all the accused-respondents.
Jai Singh Sekhon, J.
1. Messrs K. C. Vanaspati is a duly registered firm and is an assessee under the various Acts including the Central Excises and Salt Act, 1944 (for short the Act)- The said firm is a licensed unit and is engaged in the manufacture of vegetable products falling under Tariff Item No.13. Accused-respondents 2 to 7 are incharge and responsible for the conduct of the business of the firm. The audit party during its visit to the factory of accused No.1 (the present petitioner) in the month of August and November, 1983, noticed that its partners accused respondents Nos.1 to 7 were recovering additional amounts shown as distribution charges and levies from their dealers over and above the control price and they were not paying any Central Excise duty on those additional charges. The Range Officer, Jammu created certain demands of excise duty for the period from September 1, 1981 to March 31, 1983. The partners of the said firm-accused No.1, however, stopped this practice of charging additional amounts after 1983. On its next visit, the headquarters audit-party in August, 1985, detected that these accused had changed the modus operandi and were issuing debit notes to their dealers in lieu of the so-called distribution charges and levies. The firm through Shri Ganesh Dass, accused No.2 was asked to produce the sale ledger that the same was not produced before the audit-party on the plea that the said ledger was with the Dealing Assistant, who was reported to be not available in the factory. The audit party also noticed that accused Nos.8 and 10 were lifting the entire stocks of products of accused No.1 and that accused Nos.8 and 10 were self-floated bogus firms existing on papers only as the products were being delivered directly to the ultimate consignee and the gate passes and invoices were being issued in the name of either of accused Nos.8 or 10 purportedly showing the sales through accused Nos.8 and 10. The headquarters audit party noticed the transactions to be shady and suspicious. The Chandigarh Collectorate on September 10, 1985, issued summonses requiring accused No.1 to produce its ledgers and RT-12 while accused Nos.8 and 10 were asked to produce their sale invoices for September 24,1985 received from Messrs K. C. Vanaspati (accused No.1 ). However, these accused did not produce the said documents despite issuing summonses and registered notices on one pretext or the other. Ultimately, these accused-respondents were served to appear on January 7, 1986 alongwith the documents mentioned therein and on the failure of these accused persons to produce the relevant record, a complaint dated November 17, 1986 was filed by the Assistant Collector (Audit), Central Excise Collectorate, Chandigarh, for offence under Sec.9 of the Act.
2. The learned Chief Judicial Magistrate vide order dated October 13, 1987, summoned the accused-petitioners for November 26, 1987, but notice was not issued for failure to file process fee, et cetera. Thereafter, on November 26, 1987, notice was ordered to be issued to the accused-respondents for January 7, 1988. The petitioner then got the orders of summoning quashed in Criminal Writ Petition No.426 vide order dated July 28, 1989, passed by S. D. Bajaj, J. of this Court (as he then was), on the ground of non-application of mind.
3. Thereafter, the learned Chief Judicial Magistrate passed a detailed order dated March 9,1990 and summoned the accused including the petitioner for April 10, 1990. The accused No.1 petitioner being aggrieved against that order had sought the quashment of the complaint, Annexure P-l as well as summoning order, Annexure P-2 on the ground of non-application of mind as well as on the ground that the allegation in the complaint does not make out any offence. The jurisdiction of the Court, at Chandigarh, to entertain the complaint was challenged on the ground that the offence was committed at Jammu and not in the territorial jurisdiction of Chandigarh. Ob
