Companies Act, 1956 – Central Excise Act, 1944 – Code of Criminal Procedure, 1973 – Immunity from the prosecution – Grant of – Allegations against the appellant-Company that it cleared its goods into the Indian Market on payment of Countervailing Duty-CVD on the invoice value of the concerned goods, rather than the payment of the CVD on the Maximum Retail Price of the said goods, thereby caused a wrongful gain to themselves and a corresponding wrongful loss to the Government exchequer – Show Cause Notice issued to the company under Customs Act, CE Act and CA Act – Pursuant thereto, registration of FIR under IPC and PC Act – Thereafter, the appellant granted immunity from the prosecution, however, order passed by the trial court taking cognizance – Discharge application by the appellant – Rejected by the Special Judge – High Court upheld the same – Justification:
Held: Both the provisions-section 127H of the CA Act and section 32 K of the CE Act, provide for an explicit bar from prosecution on grant of immunity in cases where the proceedings for any offence have been instituted subsequent to the date of receipt of the application seeking such immunity under the relevant law – Furthermore, mere registration of FIR cannot be interpreted to mean that it constitutes the initiation of such proceedings – Registration of FIR necessitates an investigation by a competent officer – It is only after a Final Report/Challan/Chargesheet is submitted as per the compliance of s. 173(2) CrPC, cognizance for the offence is taken – However, the court is not bound by the said report – On facts, on remand to the Assessing Authority for decision afresh on the liability, it had observed that the appellantCompany was entitled to a refund of INR 1.39 Crores out of the INR 1.51 crores paid by it to the Revenue Authorities as per the demand made earlier for the purpose of clearance of the concerned goods – Said Order attained finality – Furthermore, the appellantCompany had successfully claimed immunity from prosecution under the CA 1962, CE Act 1944, and IPC – As such, there was no fiscal liability on the appellant-Company, and accordingly, the order passed by Special Judge, taking cognizance against the appellant-Company, ought not to have sustained – As the very basis of the allegation of offence against the appellant-Company was found to be non-existent, it would have amounted to misuse rather abuse of the process of law – In view thereof, application for discharge ought to have been accepted by the Special Judge – Thus, the proceedings against the appellant-Company quashed by setting aside the impugned order passed by the High Court and the order passed by the Special Judge – Customs Tariff Act, 1975 – Customs Act, 1962 – Prevention of Corruption Act, 1998 – Penal Code, 1860. [Paras 18, 19, 21-23]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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