S.A. KHAN Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition is filed to call for the records and quash E.O.C.C.No.166 of 1997 pending on the file of the Additional Chief Metropolitan Magistrate EO1, Egmore.

(2.) The case of the prosecution is that the respondent/The Assistant Commissioner of Central Excise, Prosecution Unit, Chennai-34, filed a complaint before the Additional Chief Metropolitan Magistrate for Economical Offences, Egmore, Madurai-600 008 against M/s.Printwraps, Chennai and Mr.S.Subash, Managing Partner of M/s.Printwraps and Mr.S.A.Khan, Ex-partner of M/s.Printwraps, who were arrayed as A1 to A3. The first accused/Company is manufacturing articles of packing goods, falling under Chapter 3929 of Central Excise Tariff Act, 1985 and the factory is situated at No.5, SIDCO Industrial Estate, Gummidipoondi. Based on the intelligence gathered against the accused who were persistently and deliberately violating the provisions of Central Excise Act, the Officers belonging to the Central Excise Department visited the office premises and the factory, the second accused was present in the office. The third accused, who is in-charge of the factory, was available there. During the search of residential premises of the second accused, the Accountant Mr.J.Ganesh of the first accused company was questioned and, lot of self incriminating documents were found and seized. Further, from the residence of the third accused, 1738 kgs of non-duty paid printed polyester philaminated rolls valued at Rs.2,52,010/- were found. Further, it was found that the accused were using second set of invoices, indicating removal of excusable goods to the tune of Rs.21,23,113.40/-, without payment of duty. Thereafter, as per Central Excise Act, show cause notice was issued, adjudication proceedings were initiated, wherein, the accused persons evading duty was confirmed. In this regard, Commissioner of Central Excise passed an order in Original No.43/95 dated 22.02.1995, wherein, in lieu of confiscation, fine was imposed against the first, second and third accused. Added to it, criminal prosecution was launched by the Central Excise Department, wherein the company had been arrayed as A1 and the Managing Director, Mr.Subash arrayed as A2 and Ex-partner of Mr.S.A.Khan arrayed as A3.

(3.) The contention of the petitioner is that as per Section 9AA of the Central Excise Act, it is mandatory requirement to implead the company/firm as an accused. There cannot be any prosecution against the accused without arraying the Company/Firm as an accused. Further, as per Section 305(3), it is made clear that the method of selecting a person is unique right vested with the Company/Firm and the said power cannot be stretched further to say that the Court has the power to direct any person, whom it considers to be a representative of the company/firm. Further, it is submitted that in this case, no person represents the said firm. The second accused on the date of commission of the alleged offence was responsible for the conduct of the business of the firm. It is submitted that if the Company/Firm has been made as an accused, there is no bar in further proceedings and no proceeding shall go on without any one representing the company/Firm, despite the Company/Firm made as accused. In this case, charges were framed. It is further submitted that if the first accused Company/Firm is not represented by the Director or the partner of the company, the case cannot proceed further, and the entire proceedings will be nullity in the eye of law. For maintaining a prosecution under the Central Excise Act, arraying the Company/Firm as an accused is imperative. In the absence of any person to represent the Company/Firm, the petitioner cannot be prosecuted as the partner of Print Wraps.