M/S RIMJHIM ISPAT LIMITED AND OTHERSversusUNION OF INDIA & ANOTHER

                 [2025] 7 S.C.R. 1744 : 2025 INSC 901

                M/s Rimjhim Ispat Limited and Others
                                 v.
                      Union of India & Another
                     (Criminal Appeal No. 268 of 2017)
                                  24 July 2025
           [B.R. Gavai, CJI and Augustine George Masih,* J.]


                            Issue for Consideration
       Matter pertains to the legality of having parallel and continuation
       of adjudication proceedings and criminal proceedings against the
       appellants.

                                   Headnotes†
       Central Excise Act, 1944 – ss.9, 9AA – Code of Criminal
       Procedure, 1973 – ss.245(2), 482 – Continuation of parallel
       adjudication proceedings and criminal proceedings –
       Legality – Criminal proceedings initiated against the
       appellants u/ss.9 and 9AA of the 1944 Act – Discharge
       application by the appellants on the ground that quashing
       of the departmental proceedings initiated by the respondent-
       department against the appellant by the High Court in the
       Writ, on the similar grounds, the criminal proceedings are
       not sustainable against the appellants – Dismissed by the
       trial court holding that adjudication and prosecution were
       independent processes and that the appellants had not yet
       been absolved of the underlying liabilities in the departmental
       proceedings – Revision thereagainst dismissed by the High
       Court – Interference with:
       Held: No bar on parallel proceedings, with one being by the
       Department and the other being criminal in nature, under the 1944
       Act – Direction for de novo proceedings on technical or procedural
       grounds cannot be assumed to be in equivalence to having been
       set-aside on merits, when it was specifically mentioned that the
       merits have not been considered – Plea of the appellant that non-
       existent Order dated 31.03.2011 was set aside, even assuming it
       to be so, it is clear from the materials on record that investigation


* Author
[2025] 7 S.C.R.                                                              1745

   M/s Rimjhim Ispat Limited and Others v. Union of India & Another


     and the complaint are still in sustenance against the appellants –
     Contents of the complaint reveal that no reliance placed on the
     now-set aside Order dated 31.03.2011 rather it was only referred
     as an addendum – Irregularities which came to light on search and
     the contents of the investigation report, are sufficient to observe
     and opine prima facie on the existence of allegations against the
     appellants, at the time of the consideration made by the trial court
     justifying the passing of the summoning order – Even the contention
     on the conditional stay of the subsequent Order passed by the
     Commissioner of Central Excise, by the High Court does not come to
     the assistance of the appellants – Furthermore, it cannot be said that
     the allegations for the purpose of criminal complaint, were rendered
     “groundless” – Proceedings by the respondent-Department were
     passed on merits and not on technical foundation – Contentions
     raised by the appellants on jurisprudence of discharge misconceived
     and outside the scope of adjudication – Contents of the complaint
     prima facie makes out an offence under the statute for which it
     had been preferred – Having perused the alleged conduct and
     the orders passed by the concerned authorities and the courts
     below, the authorities relied upon by the appellants are unable to
     substantiate their claim – Impugned judgment passed by the High
     Court does not call for interference. [Paras 28-36]

                              Case Law Cited
     Radheshyam Kejriwal v. State of West Bengal and Another [2011]
     4 SCR 889 : (2011) 3 SCC 581; Air Customs Officer IGI, New
     Delhi v. Pramod Kumar Dhamija [2016] 2 SCR 561 : (2016) 4
     SCC 153 – relied on.
     Ajoy Kumar Ghose v. State of Jharkhand and Another [2009] 4 SCR
     515 : (2009) 14 SCC 115; State of Tamil Nadu v. R. Soundirarasu
     and Others [2022] 7 SCR 630 : (2023) 6 SCC 768; Ram Prakash
     Chadha v. State of Uttar Pradesh (2024) 10 SCC 651; A.R.
     Antulay v. R.S. Nayak and Another [1988] Supp. 1 SCR 1 : (1988)
     2 SCC 602; Videocon Industries Limited and Another v. State of
     Maharashtra and Others [2016] 2 SCR 741 : (2016) 12 SCC 315;
     Vishnu Kumar Shukla and Another v. State of Uttar Pradesh and
     Another [2023] 13 SCR 1071 : (2023) 15 SCC 502; State of Tamil
     Nadu v. N. Suresh Rajan and Others [2014] 1 SCR 135 : (2014)
     11 SCC 709 – referred to.
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                               List of Acts
     Central Excise Act, 1944; Code of Criminal Procedure, 1973;
     Foreign Exchange Regulations Act, 1973.

                            List of Keywords
     Continuation of parallel adjudication proceedings and criminal
     proceedings; Discharge application; Quashing of the departmental
     proceedings; Absolved of the liabilities in the departmental
     proceedings; Bar on parallel proceedings; De novo proceedings
     on technical or procedural grounds; Irregularities; Investigation
     report; Conditional stay of the subsequent Order.

                           Case Arising From
     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
     268 of 2017
     From the Judgment and Order dated 05.02.2016 of the High Court
     of Judicature at Allahabad in CRLR No. 4581 of 2015

                        Appearances for Parties
     Advs. for the Appellants:
     Jaideep Gupta, Sr.Adv., Syed Shahid Hussain Rizvi, Zeeshan Rizvi.
     Advs. for the Respondents:
     S. Dwarakanath, A.S.G., Rupesh Kumar, Sr. Adv., Gurmeet Singh
     Makker, Adwaitya Awasthi, Suyash Pandey, Ms. Prerna Dhal,
     Rajat Vaishnw, Prabhakar Yadav, S. Vijaya Adithya, Ankit Goel,
     Vikas Bansal.

               Judgment / Order of the Supreme Court

                               Judgment

     Augustine George Masih, J.

1.   The present Criminal Appeal is moved against concurrent findings
     of dismissal of discharge application by the Special Chief Judicial
     Magistrate at Kanpur Nagar, Uttar Pradesh (hereinafter, “Trial
     Court”) and the High Court of Judicature at Allahabad (hereinafter,
     “High Court”) as moved by M/s Rimjhim Ispat Limited, M/s Juhi
[2025] 7 S.C.R.                                                        1747

     M/s Rimjhim Ispat Limited and Others v. Union of India & Another


      Alloys Limited, and Shri Yogesh Aggarwal (hereinafter, “Appellants”)
      in the criminal proceedings that were initiated against it under
      Section 9 and 9AA of the Central Excise Act, 1944 (hereinafter,
      “CEA 1944”).
2.    Against the Judgment dated 05.02.2016 passed by the High Court
      (hereinafter, “Impugned Judgment”), the strength of the argument
      for discharge application, as raised by the Appellants has primarily
      been the quashing of departmental proceedings initiated by the
      Respondent No.2 herein (hereinafter, “Respondent-Department”)
      against the Appellant by the High Court in Writ Tax No.771 of 2015
      on similar grounds, the criminal proceedings are, not sustainable
      against the Appellants.
3.    The factual matrix, as selectively presented by the Appellants, reveals
      that on 22.11.2007, a search was conducted at the premises, offices
      and factories, of Appellant No.1, unearthing serious irregularities that
      culminated in the initiation of proceedings via two separate Show
      Cause Notices (hereinafter, “SCNs”). The first, dated 16.05.2008
      (hereinafter, “First SCN”), alleged clandestine manufacture and
      illicit removal of excisable goods. The second, dated 06.03.2009
      (hereinafter, “Second SCN”), attributed direct and vicarious liability
      to the Director(s) of Appellant No.1 (specifically, Appellant No.3)
      and M/s Juhi Alloys Limited, being Appellant No.2 herein, for such
      unlawful removal of excisable goods during the Financial Year
      2006-07, along with evasion of excise duty, interest, and penal
      consequences.
4.    While the proceedings under the First SCN were dropped by the
      Additional Commissioner of Central Excise at Kanpur, the seized
      goods were released vide Order dated 14.07.2009. The said
      decision was subsequently affirmed by the Commissioner (Appeals)
      on 18.01.2010, and this outcome appears to have emboldened the
      Appellants, who overlooked the serious and distinct liabilities arising
      under the Second SCN.
5.    In relation to the Second SCN, the Commissioner of Central Excise
      at Kanpur, vide Order dated 31.03.2011, upheld a substantial
      demand amounting to INR 6,68,94,028/- (Rupees Six Crores Sixty-
      Eight Lakhs Ninety-Four Thousand and Twenty-Eight only) along
      with interest against Appellants No.1 and 2, and further imposed a
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     penalty of INR 25,00,000/- (Rupees Twenty-Five Lakhs only) upon
     Appellant No. 03 under Section 11AC of the CEA 1944, indicative
     of the gravity of their violations.
6.   The Appellants sought relief before the Customs Excise and Service
     Tax Appellate Tribunal at New Delhi (hereinafter, “CESTAT”),
     which, while setting aside the said order on procedural grounds
     vide Order dated 25.02.2013, rather than addressing the merits
     of the findings, remanded the matter for de novo consideration,
     inter alia, observing that joint confirmation of duty against separate
     legal entities was impermissible, and liability was required to be
     assessed individually.
7.   Exploiting the CESTAT’s procedural indulgence, the Appellants then
     proceeded to contest the initiation of criminal proceedings by the
     Respondent-Department. These proceedings stemmed from the
     Sanction Order dated 03.05.2013 by Directorate General of Central
     Intelligence (hereinafter, “DGCEI”) for prosecuting the Appellants
     under Sections 9 and 9AA of the CEA 1944, a sanction that was
     said to be based on the Commissioner’s findings dated 31.03.2011,
     which the Appellants allege was relied upon through suppression of
     the CESTAT’s remand order by the very same Commissioner.
8.   An inquiry letter dated 07.10.2013 was issued by the concerned
     Assistant Commissioner seeking clarification regarding the validity of
     the Sanction Order dated 03.05.2013, particularly given that it was
     premised on a now-set-aside adjudication order. Nevertheless, the
     Commissioner reiterated his direction to proceed with prosecution,
     persisting in his stand despite the procedural setback.
9.   Consequently, Complaint Case No. 841 of 2014 was instituted
     before the Trial Court under Sections 9 and 9AA of the CEA 1944
     (hereinafter, “Complaint”), and summons were issued against the
     Appellants on 02.05.2014, signalling the commencement of criminal
     proceedings based on the evidence then available.
10. In response, the Appellants sought to stall the criminal trial by invoking
    the jurisdiction of the High Court under Section 482 of the Code
    of Criminal Procedure, 1973 (hereinafter, “CrPC 1973”), through
    Criminal Misc. 482 Application No. 31300 of 2014. The High Court,
    while granting interim protection, refused to quash the proceedings
[2025] 7 S.C.R.                                                      1749

   M/s Rimjhim Ispat Limited and Others v. Union of India & Another


     outright and directed the Appellants to avail the remedy of discharge
     before the Trial Court vide Order dated 21.08.2014.
11. Following this direction, the Appellants moved a discharge application
    under Section 245(2) of CrPC 1973 before the Trial Court. The matter
    was heard on 24.08.2015 and listed for orders on 01.09.2015, with
    the Appellants attempting to shield themselves from prosecution
    based on technicalities.
12. Meanwhile, the re-adjudication pursuant to the Order dated 25.02.2013
    of the CESTAT, culminated in a fresh Order dated 28.08.2015 by the
    Commissioner of Central Excise at Kanpur, again recording adverse
    findings against the Appellants, including reimposition of demands
    and penalties. This order was duly submitted as an addendum in
    the pending Complaint.
13. A writ petition being Writ Tax No. 771 of 2015 was thereafter filed by
    the Appellants challenging this second adjudication. It was only after
    the Trial Court rejected the discharge applications, the High Court
    vide Judgment dated 17.11.2015 intervened in the writ, not due to
    any exoneration on the merits of the claim put forth on the part of
    the Appellants, but primarily due to procedural lapses and conduct
    attributable to the Commissioner of Central Excise at Kanpur. The
    High Court set aside the Order dated 28.08.2015 and directed the
    matter to be re-adjudicated afresh this time by the Commissioner at
    Lucknow, instead of Kanpur.
14. During the pendency of the above writ petition, as stated above, the
    Trial Court dismissed the discharge application of the Appellants vide
    Order dated 09.10.2015, holding that adjudication and prosecution
    were independent processes and that the Appellants had not yet been
    absolved of the underlying liabilities in the departmental proceedings.
15. Dissatisfied with the rejection of their discharge plea, the Appellants
    preferred Criminal Revision No. 4581 of 2015 before the High Court,
    seeking to overturn the Order dated 09.10.2015 of the Trial Court.
    This approach to the High Court again reflected the Appellants’
    repeated attempts to evade prosecution without securing a clean
    slate on merits from the Respondent-Department.
16. The High Court, while passing the Impugned Judgment, relied on
    decision of this Court in Radheshyam Kejriwal v. State of West
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     Bengal and Another1 to reiterate the findings of the Trial Court. It
     went on to observe that the objection(s) to taking of Order dated
     28.08.2015 on record have no force as there exists prima facie
     evidence against the Appellants to proceed with the concerned
     Complaint. It is not for the Trial Court to determine whether matter
     will lead to conviction or not, rather only material on record is to be
     analyzed to determine sufficiency of a prima facie case while issuing
     the summons. Therefore, observing that the adjudication is still not
     settled in favour of the Appellants and that there is a prima facie
     case against the Appellants, the Criminal Revision No. 4581 of 2015
     was dismissed by the learned Single Judge of the High Court vide
     judgment dated 05.02.2016.
17. Challenging the said Impugned Judgment, the Appellants moved
    this Court vide Special Leave Petition (Criminal) No. 2583 of 2016
    for which leave was granted, leading to the instant Criminal Appeal.
18. Assailing the Impugned Judgment, it is argued by the learned
    Senior Advocate on behalf of the Appellants that the basis of the
    Complaint was solely the sanction granted on the strength of the
    Order dated 31.03.2011, which had been set aside already, making
    it non-maintainable. Even the Order dated 28.08.2015, which was
    passed behind the back of the Appellants, was also set aside with
    harsh observations against the Commissioner of Central Excise at
    Kanpur. This fact was ignored by both the Trial Court and the High
    Court while considering their discharge application, and revision
    petition respectively.
19. It is further brought on record that the subsequent order passed by
    the Commissioner of Central Excise at Lucknow vide Order dated
    31.03.2017 was also conditionally stayed by the High Court in Writ
    Tax No. 370 of 2017 vide Order dated 31.05.2017. Collectively, it is
    argued that there is a violation of Article 21 for dealing the instant
    case in contravention or violation of the procedure established by law.
20. Taking exception to the approach adopted by the Trial Court, learned
    Senior Counsel contends that the Trial Court failed to maintain the
    mandatory distinction in approach while dealing with an application


1   (2011) 3 SCC 581
[2025] 7 S.C.R.                                                      1751

    M/s Rimjhim Ispat Limited and Others v. Union of India & Another


     for discharge under Section 245(1) of CrPC 1973 and that under
     245(2) of CrPC 1973. For this, he submits that, as is the case for
     Section 245(1) of CrPC 1973, the Trial Court considered and relied
     upon evidence that emerged subsequent to filing of the Complaint.
     Reference is also made to the observation vis-à-vis Section 8 of
     the CEA 1944, wherein, allegedly, the non-existent application by
     the Appellants was relied upon by the Trial Court. Instead, it is the
     case of the Appellants that only the contents of the Complaint and
     the application for discharge should have been considered. To
     substantiate the aforesaid claim, reliance is placed on the aspect
     of this legal distinction as elaborated by this Court in Ajoy Kumar
     Ghose v. State of Jharkhand and Another2.
21. Moving on to the approach of the High Court, he assailed the non-
    appreciation of fact that no order existed which could be made the
    basis of the prosecution against the Appellants. Even the Order
    dated 28.08.2015 had already been quashed by the Division
    Bench of the High Court. Even further, the learned Single Judge
    did not take note of the erroneous approach as adopted by the
    Trial Court while dealing with the application for discharge. Had
    it been so done, the Appellants would have been successful in
    their application for discharge, as the Complaint would have been
    recorded as “groundless”, as was defined in State of Tamil Nadu
    v. R. Soundirarasu and Others3.
22. Having said that, the learned Senior Advocate, placing reliance on
    Ram Prakash Chadha v. State of Uttar Pradesh4, further asserts
    that owing to no legal evidence, the charge would be groundless
    and thereafter compelling the Appellants to face the trial is contrary
    to the procedure established by law as envisaged under Article 21
    of the Constitution of India, 1950. He further asserts that having lost
    the case before the CESTAT, the Respondent-Department had only
    acted in vindication against the Appellants and has not followed the
    principles of natural justice, which would, held in the decision of




2   (2009) 14 SCC 115
3   (2023) 6 SCC 768
4   (2024) 10 SCC 651
1752                                                      [2025] 7 S.C.R.

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     this Court in A.R. Antulay v. R.S. Nayak and Another5, render the
     act or proceedings a nullity.
23. Finally, in his attempt to distinguish the decision in Radheyshyam
    Kejriwal (supra), learned Senior Counsel submits that unlike in this
    case, the dispute involved in the said case was under the Foreign
    Exchange Regulations Act, 1973, which cannot be equated to CEA
    1944. Moreover, the criminal prosecution and the adjudication
    proceedings were initiated almost simultaneously, with independent
    specific averments of facts. Even the application for discharge was
    not filed under Section 245(2) of CrPC 1973. Furthermore, while the
    adjudication proceedings were not held as binding on the criminal
    proceedings, herein, the entire Complaint is based on a non-existent
    Order as it stood quashed by the High Court.
24. On the basis of the above submissions, prayer has, thus, been made
    for allowing the appeal by setting aside the Impugned Judgment and
    allowing the application for discharge of the Appellant.
25. The learned Additional Solicitor General (hereinafter, “ASG”)
    appearing on behalf of the Union of India, has primarily placed
    reliance on the observations made in the decision of this Court in
    Radheyshyam Kejriwal (supra) to assert the legality of having
    parallel and continuation of adjudication proceedings and criminal
    proceedings against the Appellants. Reference was also made to
    the decision in Air Customs Officer IGI, New Delhi v. Pramod
    Kumar Dhamija6 wherein the aforesaid decision was relied upon
    to observe that when exoneration in the adjudication proceedings
    was not based on merits or that the accused was not yet found to
    be innocent, the concerned High Court had committed an error in
    accepting the prayer for quashing of the proceedings.
26. Further reliance is placed on the contents of the Complaint to
    assert and reiterate the liability of the Appellants. While denying the
    assertions made by the Appellants, the learned ASG denies that the
    proceedings were vindictive, there is no independent basis for the
    Complainant, or there was suppression of facts by the Commissioner


5   (1988) 2 SCC 602
6   (2016) 4 SCC 153
[2025] 7 S.C.R.                                                       1753

   M/s Rimjhim Ispat Limited and Others v. Union of India & Another


     of Central Excise at Kanpur as contended by the Appellants. He
     further contends that there is no prescribed time limit for launching of
     prosecution. Accordingly, the learned ASG has prayed for dismissal
     of the instant Criminal Appeal, holding the Impugned Judgment as
     good in law.
27. We have perused the pleadings, materials and documents on record,
    including the Complaint as also the submissions rendered before
    us by the parties.
28. Considering the contentions of the Appellant on the aspect of
    reliance on a non-existent Order dated 31.03.2011, on it having been
    set aside, even assuming the said contention to be so, it is clear
    from the materials on record that investigation and the Complaint
    are still in sustenance against the Appellants. The contents of the
    Complaint reveal that there is no reliance placed on the now-set
    aside Order dated 31.03.2011 rather it was only referred as an
    addendum to complete the sequence of facts of the case of the
    Respondent-Department. The irregularities which came to light on
    search and the contents of the investigation report, are sufficient
    to observe and opine prima facie on the existence of allegations
    as mentioned in the complaint against the Appellants, at the time
    of the consideration made by the Trial Court justifying the passing
    of the summoning order.
29. Even the contention on the conditional stay of the Order dated
    31.03.2017 passed by the Commissioner of Central Excise at Lucknow
    by the High Court in Writ Tax No. 370 of 2017 does not come to the
    assistance of the Appellants. The above Order dated 31.08.2017
    has been passed on merits by the Commissioner of Central Excise
    at Lucknow in pursuance to and in compliance with the directions
    issued by the High Court vide Order dated 31.05.2017. Further, stay
    thereof, was subject to the payment of the liability imposed on the
    Appellants by impugned order in the pending writ and submission
    of surety on the penalty imposed.
30. The Order dated 31.03.2017, impugned in the aforesaid writ has been
    passed on merits, and that too not by the concerned Commissioner
    of Central Excise at Kanpur, against whom there were allegations of
    vindication, but by that of Lucknow. Further, stay thereof, was still
    subject to the payment of the liability imposed by the Commissioner
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     of Central Excise at Lucknow on the Appellants and submission of
     surety on the penalty imposed.
31. Collectively, in the light of aforesaid perusal of the relevant orders,
    a reference to Radheyshyam Kejriwal (supra) reveals that, as in
    the present case, there is no bar on parallel proceedings, with one
    being by the Respondent-Department and the other being criminal in
    nature, under the CEA 1944. Further, the attempt of the Appellants
    to distinguish the said decision, is primarily reliant on the observation
    that the Complaint was solely based on the Order dated 31.03.2011,
    which, at the time had been set-aside. However, a direction for de
    novo proceedings on technical or procedural grounds cannot be
    assumed to be in equivalence to having been set-aside on merits,
    when it was specifically mentioned that the merits have not been
    considered. Hence, we are inclined to accept and adopt the decision
    in Pramod Kumar Dhamija (supra) as referred by the learned ASG.
32. Reiterating further, the contention of the Appellants that the allegations
    for the purpose of criminal complaint, were therefore, not rendered
    “groundless” as has been contented on behalf of Appellants through
    reliance on decision in R. Soundirarsu (supra), is again, on the
    assumption and contention that the Order dated 31.03.2011 or even
    the concerned subsequent Order dated 28.08.2015 was on merits.
    We are, therefore, in the light of our aforesaid observations, unable
    to appreciate the submissions to this effect. Even the decision of
    this Court in Videocon Industries Limited and Another v. State of
    Maharashtra and Others7 reiterated the merit of criminal proceedings
    when the orders on the civil side, proceedings by the Respondent-
    Department in the instant case, were passed on merits and not on
    technical foundation.
33. Moving on to the contentions raised and rendered on behalf of the
    Appellants on jurisprudence of discharge and the reliance thereof
    placed on Ajoy Kumar Ghose (supra) are misconceived and outside
    the scope of adjudication in the present case as the said objections
    were never raised before the courts below. Despite the same, even
    placing reliance on the decisions of this Court, which have determined



7   (2016) 12 SCC 315
[2025] 7 S.C.R.                                                      1755

    M/s Rimjhim Ispat Limited and Others v. Union of India & Another


     or reiterated the jurisprudence on law of discharge, such as the
     Vishnu Kumar Shukla and Another v. State of Uttar Pradesh
     and Another8 and State of Tamil Nadu v. N. Suresh Rajan and
     Others9 have been complied with while considering the case of the
     Appellants as the contents of the Complaint prima facie makes out
     an offence under the statute for which it had been preferred.
34. Ergo, having perused the alleged conduct and the orders passed
    by the concerned authorities and the Courts below, the authorities
    relied upon by the Appellants are unable to substantiate their claim
    in the present facts and circumstances.
35. We are in favour of the submissions made by the learned ASG and
    accordingly, are not inclined to interfere with the Impugned Judgment.
36. Hence, the instant Criminal Appeal is dismissed and the Impugned
    Judgment dated 05.02.2016 passed by the High Court of Judicature
    at Allahabad is good in law, calling for no interference by this Court.
37. Any observations made hereinabove are for the purpose of disposal
    of this case only and shall have no bearing, whatsoever, on the
    merits of the proceedings before any court.
38. Pending applications, if any, also stand disposed of.


     Result of the case: Appeal dismissed.




     †
         Headnotes prepared by: Nidhi Jain




8   (2023) 15 SCC 502
9   (2014) 11 SCC 709