1

REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1045 OF 2017

CHANDPAKLAL RAMANLAL SHAH AND ANR.             …APPELLANTS

VERSUS RELIANCE INDUSTRIES LTD.   ...RESPONDENT

J U D G M E N T   

ADARSH KUMAR GOEL, J.

1. This appeal has been preferred against the Order dated 17th

October,  2015  of  the  High  Court  of  Gujarat  at  Ahmedabad  in

Criminal Revision Application No.192 of 2014.  Thereby, the High

Court set aside the order of the trial court dated 22nd March, 2013

and discharged the respondent in Criminal Case No.441 of 1987

under Section 9 of the Central Excises and Salt Act, 1944 (the Act)

read with Rules 52A, 56A, 173G, 9(2) and 173(Q) of the Central

Excise Rules, 1944 (the Rules) read with Section 11-A of the Act.

2

2. Complaint dated 4th August, 1987 was filed by the appellant in

his capacity as Superintendent, Central Excise, Group –II, Central

Excise  Collectorate,  Hqrs.  Jivabha  Mension,  Ahmedabad  alleging

commission  of  offence  mentioned  in  the  complaint.   The  trial

Magistrate summoned the accused.  On 20th May, 1994, Rule 56A

was omitted by a notification.  On that basis, the respondent filed

an application  for  discharge.   The  application  was rejected and

charge was framed by the trial Magistrate vide order dated 22nd

March, 2013 as follows :

“A  charge  is  framed  against  the  accused  for  the offence  punishable  under  Section  9  of  Central Excises & Salt Act, 1944 read with violation of Rule 52(A),  56(A),  173(G),  9(2) of  Central  Excise Rules and  Rule  173(Q)  read  with  Section  11(A)  of  the Central Excises  & Salt Act, 1944.”

3. The respondent moved the High Court by way of a revision

petition.   The High Court has allowed the revision petition.   It was

held  that  since  Rule  56A  was  omitted  without  prescribing  any

saving  clause,  proceedings  could  not  continue.   Referring  to

Section 38A added to the Act  by the Finance Act,  2001,  it  was

observed that Explanation to Section 132 of the Finance Act, 2001,

laid  down that  an act  or  omission,  which would not  have been

3

punishable but for the said section, will not be punishable.  It was

also observed that omission of the provision was not at par with

repeal  and Section  6  of  the  General  Clauses  Act,  1897 did  not

apply  to  repeal  of  a  rule.   Reliance  was  placed  on  Rayala

Corporation (P) Ltd. versus Director of Enforcement, New

Delhi1 and Kohlapur Cane Sugar Works Ltd. versus Union of

India2.  Hence this appeal.

4. Learned  Solicitor  General  appearing  for  the  appellant

submitted that the view taken by the High Court is erroneous.  The

charge against the respondent was of evasion of excise duty under

Section 9(1)(b) which remains unamended.  The evasion was on

account of the respondent having taken credit without following

the procedure under Rule 56A.  By omission of the said Rule, the

charge did not suffer from any legal infirmity. Alternatively, it was

submitted that  Section 6  of  the General  Clauses Act  applied to

omission which was also repeal.  It also applies to a Rule.  In this

regard,  reliance  has  been  placed  on  Fibre  Boards  Pvt.  Ltd.

Bangalore versus Commissioner of Income Tax, Bangalore3,

Shree Bhagwati Steel Rolling Mills versus Commissioner of

1  (1969) 2 SCC 412 2  (2000) 2SCC 536 3  (2015) 10 SCC 333

4

Central  Excise4 .   It  was  also  submitted  that  retrospective

amendment has been made to the Act by the Finance Act, 2001

making it clear that actions taken under a rule will not lapse even

if the rule is omitted.  The Explanation applied only to future action

and not to continuing action.  Reliance has been placed on a full

Bench Judgment of the Allahabad High Court in  Simholi Sugar

Mills Ltd. versus Union of India5  It  was also submitted that

penalty for  wrongly  taking credit  was upheld by the Tribunal  in

Reliance  Industries  Ltd.  versus  CCE6,  which  has  attained

finality.

5. Opposing the above submissions,  learned senior counsel  for

the respondent submitted that Section 6 of the General Clauses

Act did not apply omission and applied only to repeal.  It did not

apply to a rule and applied only to an Act or Regulation as held in

Kohlapur  Cane  Sugar  Works  Ltd. (supra).   He  further

submitted that in view of Explanation to Section 132 of the Finance

Act,  2001,  prosecution  could  not  continue  as  there  was  no

retrospective validation of the prosecution.

4  (2016) 3 SCC 643 5  2006 (205) ELT 141 6  1995 (75) ELT 77

5

6. It is not necessary to go into all the rival contentions.  In our

view, the matter  can be decided on a short  point.   The charge

against the respondent is of evasion of duty.  The ingredient of the

offence  is  the  evasion.   The  omission  of  a  procedural  rule  for

availing the credit cannot in any manner affect the said charge.

The  prosecution  cannot  be  deprived  of  opportunity  to  prove

evasion which by itself is an offence.  In this view of the matter,

there was no justification for the High Court to quash the charge

merely on the ground of Rule 56A having been omitted.

7. Accordingly, we allow this appeal, set aside the order of the

High Court and restore the order of the trial court.

………………………………………………..J.                           [ADARSH KUMAR GOEL ]

………………………………………………..J.        [ UDAY UMESH LALIT ]

NEW DELHI; SEPTEMBER 12, 2017.

6

ITEM NO.1501               COURT NO.11               SECTION II-B (For judgment)                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Criminal Appeal  No(s).  1045/2017 CHANDPAKLAL RAMANLAL SHAH AND ANR.                 Appellant(s)                                 VERSUS RELIANCE INDUSTRIES LTD.                           Respondent(s) Date : 12-09-2017 This appeal was called on for pronouncement of  judgment today. For Appellant(s) Mr. Ranjit Kumar, SG.

Mr. Rupesh Kumar, Adv. Mr. Ritesh Kumar, Adv.

                   Mr. B. Krishna Prasad, AOR                     For Respondent(s) Mr. K. R. Sasiprabhu, AOR                      

Hon'ble  Mr.  Justice  Adarsh  Kumar  Goel  pronounced  the judgment  of  the  Bench  comprising  His  Lordship  and  Hon'ble  Mr. Justice Uday Umesh Lalit.     

The appeal is allowed in terms of the signed reportable judgment.

 (SWETA DHYANI)                         (PARVEEN KUMARI PASRICHA) SENIOR PERSONAL ASSISTANT                      BRANCH OFFICER

(Signed reportable judgment is placed on the file)