SC Sets Ball Rolling For A Case Against Reliance Industries Pending Trial For Over 3 Decades [Read Judgment]

The omission of a procedural rule for availing of credit cannot in any manner affect or undo the offence of evasion of duty, the Supreme Court has held setting the ball rolling in a case against Reliance Industries awaiting trial for over three decades.

A bench of Justice AK Goel and Justice UU Lalit decided the appeal which revolved around the question whether evasion of excise duty due to not following procedure prescribed under Rulea 56A of the Central Excise Rules would be open to prosecution after the section stands omitted by a notification.

"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," the bench held.

It set aside the order of the Gujarat High Court which had quashed the charge against the accused merely on the ground of Rule 56A having been omitted.

In the instant case, the Superintendent of Central Excise in Ahmedabad filed a complaint on August 4, 1987, against Reliance Industries for claiming credit without following due procedure as per Rule 56A.

The trial magistrate summoned the accused.On May 20, 1994, Rule 56A was omitted by a notification.

The accused filed an application for discharge which was rejected and charges were framed in 2013 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.

The high court allowed the revision petition, holding that since Rule 56A was omitted without prescribing any saving clause, proceedings could not continue.