2020 (11) TMI 239 - HC - Central Excise

Court denies bail in economic offence case involving excise duty evasion under CrPC & Central Excise Act.

Manoj Kumar Arora Versus Union of India Through Asst Commissioner Central Excise Noida

The Court denied the bail application under Section 439 of the CrPC in a case involving Sections 9 and 9AA of the Central Excise Act. The applicant, ... Clandestine Manufacture and removal - Pan Masala and scented zarda - Release of applicant on Bail - benefit of Section 436-A of Cr.P.C. - HELD THAT:- The applicant evaded the excise duty by procuring the raw material and also not accounting the clandestine and surreptitious production in the statutory books. The clandestinely manufactured goods were supplied in the market without cover of lawful documents.The applicant is the master mind and beneficiary of entire scheme of duty evasion . The applicant had knowingly and willingly made distance in order to create a veil and to escape legal liabilities cast upon him. According to section 9AA of Central Excise Act, every person who at the time, the offence was committed was in charge shall be severally and jointly liable for being prosecuted for the aforesaid offence. There is nothing in the Act that the prosecution depends upon the result of the adjudication. Two proceedings are quite independent . The finding in one is not conclusive in the other proceedings. Both can go on simultaneously and finding in the adjudication proceedings is not binding on the criminal proceedings.A prosecution can be launched even after the completion of adjudication. Since the offence under section 9 (1A) Excise Act is cognizable and nonbailable and is grievous in nature, hence this Court does not deem it congruous to interfere in such matters. The bail application filed on behalf of the applicant stands rejected. Whether the benefit of Section 436-A Cr.P.C. can be extended to the applicant to release him on bail merely because he has served half of the maximum sentence prescribed under sections 9, 9AA of the Central Excise Act, 1944? - HELD THAT:- The explanation to Section 436-A Cr.P.C. places a restriction that in case there is a delay in proceeding caused by the accused, the period of detention shall be excluded for granting bail - a person cannot claim as a matter of right to be released on bail merely because he was under detention for half of the maximum sentence prescribed, as when there is lapse on the part of the accused to delay the proceeding, such benefit will not be extended to him. The applicant is not entitled to the benefit of Section 436-A Cr.P.C. His detention is justified for longer period than he has already undergone. The bail is granted to the applicant - bail rejected. Issues:Bail application under Section 439 of Criminal Procedure Code for release on bail in a complaint case involving Sections 9 and 9AA of Central Excise Act, pending in the Court of Special Chief Judicial Magistrate, Meerut.Detailed Analysis:1. Nature of Offence and Detention Period:- The applicant sought bail under Section 439 of the CrPC due to facing trial for offences under Sections 9 and 9AA of the Central Excise Act, being in jail since 15.3.2017. The applicant argued for release based on having served half the maximum imprisonment period and eligibility under Section 436-A of the CrPC.2. Contentions of Applicant and Union of India:- Applicant's counsel emphasized the prolonged detention affecting personal responsibilities towards ailing family members and the slow pace of trial progress. In contrast, Union of India's counsel highlighted the rejection of the first bail application, substantial evidence against the applicant, and the ongoing trial proceedings.3. Judicial Observations and Previous Order:- The Court noted the seriousness of the economic offence related to evading excise duty, leading to significant loss to the government exchequer. The rejection of the first bail application was based on the applicant's involvement in clandestine manufacturing and supply of goods without payment of duty.4. Application of Section 436-A CrPC:- The Court deliberated on the applicability of Section 436-A CrPC in economic offences, emphasizing the need for a distinct approach towards bail in such cases. The provision allows release on bail after serving half the maximum sentence, subject to considerations of delay caused by the accused.5. Consideration Amid Covid-19 Pandemic:- Acknowledging the impact of the pandemic on court proceedings and prison conditions, the Court highlighted the directions of the Supreme Court to decongest jails. However, in this case, the Court found the applicant ineligible for bail due to the economic nature of the offence and potential evasion of trial proceedings.6. Conclusion and Trial Directions:- The Court rejected the bail application, citing the applicant's past attempt to escape custody and the substantial amount involved in the case. The trial court was directed to ensure witness presence for cross-examination and conclude the trial promptly as per the Supreme Court's timeline.7. Legal Interpretation and Discretion:- The judgment reflects a cautious approach towards economic offences, balancing the rights of the accused with the seriousness of the charges and the need for timely trial completion. The Court exercised discretion in denying bail based on the specific circumstances and legal provisions applicable to the case.