Cir. No. 30/30/94-CX

Subject : Central Excise - prosecution under the Central Excise and Salt Act,1944, Clarifications - Regarding.

I am directed to refer to Board’s F.No. 218/7/89-CX.6 dated 9.8.1990 regarding guidelines for launching prosecution under the Central Excise and Salt Act, 1944.

2. Instructions contained in the aforesaid letter envisage that before launching any prosecution, it is necessary that the department should have evidence to prove that the person, company or individual had guilty knowledge of the offence or had fraudulent intention to commit the offence or in any manner possessed mens-rea (mental element) which would indicate his guilt. The letter further emphasises that prosecution once launched, should be vigorously followed.

3. Consequent to issue of above guidelines Board has received references regarding the procedure to be followed for withdrawal of prosecution on the ground that certain factors like weak evidence on records; age of the accused and prompt payment of duty; fine and penalty etc., have come to the notice of the department after a decision has already been taken to launch the prosecution or the complaint filed in the court.

4. The issue has been examined by the Board in consultation with Ministry of Law. Ministry of law has opined that the authority to withdraw prosecution should rest with an authority superior to the authority which approves launching of prosecution. However, where the complaint has already been filed in the court, the discretion to allow withdrawal of prosecution ultimately rests with the court.

5. In view of above it has been decided that where a decision has been taken by the concerned principal. Collector to prosecute entity or a corporate body but the complaint has not been filed in the court and in the interim period however facts come to the notice of the Principal Collector which are against initiating prosecution, in such cases Principal Collectors may recommend to Board for considering the withdrawal of prosecution.

In cases where a complaint has already bee filed in the court, it will be upto the court to decide whether or not to pursue prosecution in terms of Section 257 and 321 of Cr. P.C. 1973. If the order for withdrawal has been given by a court, the prosecution can be withdrawn by the Assistant Collector after getting a formal order from the Principal Collector.

6. Board desires that each case for withdrawal of prosecution should be closely scrutinized by the Principal Collector concerned and if found fit he should forward it with his recommendation for Board’s consideration. It is however reiterated that in cases where complaint is already filed by the court it is for the court to pass the order.