R JAGAPATHI RAJU Vs. STATE OF A P

JUDGEMENT

(1.) This criminal petition is filed under Section 482 of Cr.P.C. to quash the proceedings against the petitioner in C.C. No.117 of 1998 on the file of III Metropolitan Magistrate, Visakhapatnam.

(2.) The Crime was registered alleging that the accused is the Proprietor of M/s. Commercial Plastics, Industrial Estate, Visakhapatnam. The said unit is a small scale industry registered with the Department of Industries, Government of A.P. for manufacturing the polythene and polystyrene film and bags including milk packets by using the inputs of LDPE and LLDPE granules on co-extrusion, blown up and slitting method. As per the Central Excise Rules, 1975, the products manufactured or processed and cleared from the industrial premises by the accused during the relevant period is liable for payment of Central Excise Duty. For calculation of annual turnover, the value of the products manufactured and cleared from factory premises during the particular financial year should be taken into consideration. Value of the goods shall mean and include all the raw material cost, various overheads, transportation in sales tax and manufacturers profit. However, the accused firm being SSI unit is exempted from payment of excise duty on the annual turnover. The remaining portion of annual turnover over and above the exempted limit is liable for payment of excise duty. The accused entered into two contracts with Visakha Co-operative Daily and Godavari Co-operative Dairy during 1980 for the manufacture of polythene film meant for milk packets and the said contracts were renewed every year by means of work orders. Besides the above work of the Cooperative Dairies, the accused firm also manufactured certain other plastic goods. As per the Central Excise Law, the accused firm has to furnish the details like value of goods cleared, nature of goods produced, quality and quantity of goods produced in the form of "Annual Declarations" at the end of every financial year. But the accused fraudulently and dishonestly furnished the declarations suppressing the actual turnover to remain within the exempted limits and to avoid excise duty, therefore, he is liable for prosecution.

(3.) After conclusion of the investigation, the police laid the charge-sheet and it was numbered as C.C.No.117 of 1998. A charge under Section 420 was also framed against the petitioner. Subsequently, the petitioner approached this Court through this quash petition contending that he did not suppress any material fact regarding the annual turnover of the factory and as the turnover did not exceed the exempted limits, he is not liable for prosecution. He further submitted that the Central Excise Department sought to collect Rs.25,76,700/-, towards excise duty for the years 1989-90 to 92-93. The Collector after enquiry held that the declarations filed by the petitioner were verified by the concerned Range Superintendent and returned to party assessee with remarks "verified" and as such it is difficult to blame the party that the particulars given by him were not in order. It was further held that since the department was aware of the nature of the manufacture, the question of mis-declaration or suppression of fact cannot be attributed to the assessee. It was further held that if the fact of levy of duty on the sum total of the cost of raw material and the job charge was made known to the party at the time of verification of the declaration, the party would have opted for availing 'MODVAT' on raw materials and would have filed necessary declarations as the duty on the final products was only 20% as compared to the 'MODVAT' credit available on the inputs at 30% to 40% and accordingly the proceedings were dropped through the order No.3/95, dated 17-2-1995.