The Commissioner of Central Exices, Vs M/S Unimental Ispat Limited

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1 - NC: 2025:KHC-D:10310 CRL.A No. 2746 of 2010

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 14^TH DAY OF AUGUST 2025

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BEFORE

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THE HON'BLE MR. JUSTICE C.M. POONACHA CRIMINAL APPEAL NO. 2746 OF 2010 (A-)

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BETWEEN:

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THE DEPUTY COMMISSIONER OF CENTRAL EXCISE, BELLARY DIVISION, GANDHI NAGAR, GOPALSWAMY MUDALIAR ROAD, BELLARY.

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…APPELLANT

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(BY SRI. GIRISH S. HULMANI, ADVOCATE)

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AND:

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M/S. UNIMETAL ISPAT LIMITED, HONNURAHALLI (POST), DISTRICT: BELLARY.

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SHRI S.K. BHAGATH, MANAGING DIRECTOR, M/S. UNIMETAL ISPAT LIMITED, A-21 & 22, APIE BALANAGAR, MEGANA COMPLEX, HYDERABAD, (ANDRA PRADESH).

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YASHAVANT NARAYANKAR

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Digitally signed by YASHAVANT NARAYANKAR Location: HIGHCOURT OF KARNATAKA DHARWAD BENCH DHARWAD

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SHRI A. BHUJANGA RAO, GENERAL MANAGER (WORKS), BELLARY ROAD, POST: SIRUGUPPA, DISTRICT: BELLARY.

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SRI. MASTAN REDDY, CHIEF CHEMIST, M/S. JINDAL VIJAYANAGAR STEEL LIMITED, POST: TORANAGALLU, DISTRICT: BELLARY.

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…RESPONDENTS (BY SRI. R.H. ANGADI, ADVOCATE FOR R1, R2 & R4; SRI. K.L. PATIL, ADVOCATE FOR R4; NOTICE TO R3 IS SERVED)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) CR.P.C. 1973 SEEKING TO SET ASIDE THE JUDGMENT DATED 25.02.2010 PASSED BY THE PRINCIPAL CIVIL JUDGE (JUNIOR

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2 - NC: 2025:KHC-D:10310 CRL.A No. 2746 of 2010

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HC-KAR

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DIVISION) & JMFC, BELLARY IN C.C.NO.40/2001 AND CONVICT THE RESPONDENTS HEREIN/ACCUSED PERSONS FOR THE OFFENCES PUNISHABLE UNDER SECTION 9(1)(b), 9(1)bb, 9(1)(bbb) AND 9(1)(c) OF CENTRAL EXCISE & SALT ACT 1944 READ WITH SECTION 9AA OF THE SAID ACT.

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THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: THE HON'BLE MR. JUSTICE C.M. POONACHA

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ORAL JUDGMENT

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The present appeal is filed under Section 378(4) of the

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Code of Criminal Procedure, 1973¹ , by the appellant/complainant challenging the judgment dated 25.02.2010 passed in C.C.No.40/2001 by the Principal Civil Judge (Jr.Dn.) and JMFC, Bellary² , whereunder, the complaint filed by the Deputy Commissioner of Central Excise, Bellary Division, Bellary, under Section 200 of the Cr.P.C. alleging commission of the offences punishable under Sections 9(1)(b), 9(1)(bb), 9(1)(bbb) and 9(1)(c) of the Central Excise and Salt Act, 1944³ , read with Section 9AA of the said Act, 1944, was ordered upon and the accused was acquitted.

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1 Hereinafter referred to as the ‘Cr.P.C.’

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2 Hereinafter referred to as the ‘Trial Court’

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3 Hereinafter referred to as the ‘Act, 1944’

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3 - NC: 2025:KHC-D:10310 CRL.A No. 2746 of 2010

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HC-KAR

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It is the case of the appellant/complainant that the accused No.1 is a company manufacturing pig iron and the accused Nos.2 to 5 are described to be General Manager, Managing Director, General Manager (Works) and Chief Chemist of accused No.1/Company. That the accused No.1/Company was manufacturing pig iron of low as well as a high phosphate grade. That the pig iron containing high phosphate grade of more than 0.2% of phosphorus was exempted from payment of central excise duty as per the notification bearing No.99/93 C.E. dated 07.12.1993. That the Preventive Unit of the complainant received credible information that the accused No.1/Company was manufacturing low grade phosphorus content pig iron, but clearing the same as a high grade phosphorus content pig iron and thus evading Central Excise Duty by mis-declaring the facts. That, on the said information, the complainant detained four lorries on 18.01.1996 transporting pig iron manufactured, and consignment was checked, which revealed that the phosphorus in the said pig iron was more than 0.2%. The panchanama was conducted on 19.01.2006,

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HC-KAR

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samples were taken from four lorries and they were sent to the Laboratory for analysis. Subsequently, another seven lorries were also detained on 19.01.1996, and samples were taken for analysis. That, from the 11 lorries of accused No.1, 149.985 metric tonne of pig iron was seized. That out of the said investigation it appeared that there are 11 lorries transporting pig iron, which had phosphorus content of less than 0.2%. That the accused No.1/Company with an intention to misuse for the benefit of exemption for high phosphorus grade in the pig iron, had mis-stated the actual phosphorus content in the pig iron. That the accused No.1 fabricated documents and misled the Department to believe that the clearances were for high phosphorus pig iron and eligible for exemption. That the option was given to accused No.1/Company to redeem the seized goods on payment of the requisite fine and penalty. Hence, the accused No.1 has violated provisions of the Act, 1944.

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The accused appeared before the Trial Court and

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contested the proceedings. PW.1 to PW.3 were examined on behalf of the complainant and Exs.P1 to Ex.P40 were marked

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5 - NC: 2025:KHC-D:10310 CRL.A No. 2746 of 2010

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HC-KAR

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in evidence. The Trial Court, by its order dated 25.02.2010, acquitted the accused. Being aggrieved, the present appeal is filed by the Deputy Commissioner of Central Excise, Bellary Division, Bellary.

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Heard submissions of the learned counsel

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Sri.Girish S. Hulmani for appellant/complainant, the learned counsel Sri.Pranav Badagi appearing for the learned Counsel Sri.R.H. Angadi for respondent Nos.1 and 2 and the learned counsel Sri.K.L. Patil for respondent No.4. Perused the records, including the records of the Trial Court.

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It is the vehement contention of the learned counsel for the appellant that the finding of the Trial Court on the issue of jurisdiction is erroneous, since the accused No.1 is situated at Bellary. Further, it is contended that the department, having examined the concerned officials and having demonstrated that the quantity of pig iron seized belonged to the accused No.1, and that the said pig iron was having contained low grade of phosphorus, which has been confirmed by the test reports that were issued by the

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HC-KAR

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laboratory, the acquittal of the accused by the Trial Court is erroneous and unsustainable.

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Per contra, the learned counsels appearing for the respondents would jointly submit that the complainant having failed to prove the commission of the offences as alleged by the complainant, the Trial Court was justified in acquitting the accused.

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The submissions of the learned counsels appearing for both parties have been considered and the material on record including the records of the Trial Court has been perused. The question that arise for consideration is:

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“Whether the Trial Court was justified in acquitting the accused?”

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It is forthcoming that PW.1, who is the complainant, has deposed regarding filing of the complaint. The authorization (Ex.P40) has been produced, which demonstrates that he was authorized to represent the complainant. However, as noticed by the Trial Court, PW.1

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HC-KAR

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has admitted in the cross-examination that he had no personal knowledge regarding the seizure of 11 lorries, as has been alleged in the complaint. PW.2 has deposed regarding detaining of four lorries on 18.01.1996 at Siripuram Junction. PW.3 has deposed regarding detaining of seven lorries on 19.01.1996 and samples taken from the same. The Trial Court has noticed that, apart from the testimony of PW.2 and PW.3, who are officials of the complainant, the evidence of panchas have not been adduced nor have the drivers of the lorries been examined. Hence, the Trial Court has recorded a finding that there is no evidence to prove that the consignment was taken and transported from the accused No.1/Company. It is further noted by the Trial Court that although the invoices seized from the lorries were produced, they have not been proved through the examination of the lorry drivers. Further, although the panchanamas dated 18.01.1996 and 19.01.1996 (Ex.P3 and Ex.P4) have been marked, the panch witnesses have not been examined to prove the said documents. The statements of the lorry drivers, which were

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HC-KAR

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produced at Ex.P6, have also not been proved by examining the said lorry drivers. It is further noticed by the Trial Court that the Test Certificates have been produced as Ex.P17. However, there is no other evidence that has been adduced to demonstrate that the level of phosphorus was 0.2%. The Trial Court has further noticed that PW.2 had admitted that the report given by the Madras Lab was favouring the case of the accused inasmuch as tallying with the report given by the accused No.1/Company.

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It is clear from the aforementioned that the complainant has merely examined PW.2 and PW.3, who have deposed regarding filing of the complaint and seizing of lorries. Apart from the officials of the complainant, no other independent witnesses have been examined like the panch witnesses or the drivers of lorries examined to depose regarding the particulars of the seizure of lorries. Further, with regard to the content of phosphorus in the pig iron that was allegedly seized by the complainant, reliance is placed on the Test Certificates (Ex.P17). However no witness has been examined to prove Ex.P17.

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HC-KAR

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The learned counsel for respondent No.4 placing reliance of the judgment of the Hon’ble Supreme Court in the case of State of Himachal Pradesh Vs. Jai Lal and Others⁴ , contends that mere production of test reports cannot be considered in the absence of an expert being examined with regard to the same. The Hon’ble Supreme Court in the said case of Jai Lal⁷ , held as follows:

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“19. The report submitted by an expert does not go in evidence automatically. He is to be examined as a witness in Court and has to face cross-examination. This Court in the case of Hazi Mohammed Ikramul Hague v. Stateof West Bengal : AIR 1959 SC 488 concurred with the finding of the High Court in not placing any reliance upon the evidence of an expert witness on the ground that his evidence was merely an opinion unsupported by any reasons.”

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(emphasis supplied)

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It is clear that the complainant, having failed to examine the expert, has not been able to demonstrate the allegation that the phosphorus content was below the permissible limit.

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4 1999 Supp(2) SCR 318

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HC-KAR

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It is also pertinent to note that the Trial Court observed the following: accused No.1/Company is situated in Siruguppa taluk; “accused No.2 is a resident of Koppal; accused No.3 is shown to be a resident of Andhra Pradesh; accused No.4 is shown to be a resident of Siruguppa taluk; and accused No.5 is shown to be a resident of Toranagallu Post. The detention of the lorries took place at Siripuram Junction, which is beyond the jurisdiction of the Court.” The Trial Court, having considering these facts, recorded a finding that the cause of action did not arise within the jurisdiction of the Court.

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It is clear and evident from the foregoing that the complainant has not examined any independent witness to demonstrate the seizure of pig iron from the lorries of accused No.1 detained by the complainant. Furthermore, the complainant, having failed to examine any expert in support of the Test Certificates (Ex.P17), has also failed to substantiate the allegation that the pig iron allegedly seized contained the level of phosphorus as stated in the complaint.

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HC-KAR

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In view of the aforementioned, the appellant has

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failed in demonstrating that the order of the Trial Court is in any manner erroneous and liable to be interfered with. Hence, the question framed for consideration is answered in the affirmative.

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Accordingly, the appeal is dismissed as being devoid of merit.

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In view of the dismissal of the appeal, pending I.A.’s, if any, shall also stand dismissed as they do not survive for consideration.

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Sd/(C.M. POONACHA) JUDGE

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PMP CT-MCK List No.: 1 Sl No.: 4

The Commissioner of Central Exices, v. M/S Unimental Ispat Limited

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The Commissioner of Central Exices, v. M/S Unimental Ispat Limited

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