TaxTMI 
TaxTMI 
2016 (7) TMI 435
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....03.03.2016, titled as "Central Excise Commissionerate, Jalandhar Vs. M/s. Dunar Foods Limited and Ors." (Annexure P-5) filed under the Section 9 & 9AA of the Central Excise Act, 1944, pending before the Court of learned CJM, Amritsar. 2. The petitioner-Mandeep Singla has been arrested by an Inspector of Central Excise, Amritsar under Section 13 of the Central Excise Act, 1944 (for short '1944 Act'). The petitioner has been arrested for commission of an offence punishable under Section 9 and 9AA of the 1944 Act. The petitioner was arrested on 05.01.2016 and the respondent-Central Excise Department (for short 'department') vide application dated 05.01.2016 produced and sought judicial remand from the Learned CJM, Amritsar, who sent the petitioner to judicial custody. The respondent- Department filed Complaint No. 39 dated 03.03.2016 in the Court of Learned CJM, Amritsar. 3. The petitioner was arrested being incharge of affairs of M/s Dunar Foods Ltd., alleging evasion of duty amounting to Rs. 29.59 crores for period Aug' 2014 to Jan' 2015 and for the said amount a Show Cause Notice dated 06.01.2016 (Annexure P-6) has already been issued to M/s Dunar Foods Ltd., Tarn Taran. In t....
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....with the summons which are even after thought so there was no reason to arrest. (ix) The petitioner was not produced before the learned CJM on 19.01.2016 and 02.02.2016 so judicial remand is bad in the eyes of law. (x) The goods sold by EOU are exempt from duty in terms of Notification No. 23/2003 dated 31.03.2003 issued under Section 5A of the Central Excise Act, 1944. (xi) The finished goods have not been cleared after obtaining due permission from Development Commissioner, therefore, goods cannot be treated as "allowed to be sold in India". (xii) The goods sold in India are fully exempt from duty, therefore, company is not liable to pay duty. 5. Learned counsel for the respondent-Department vehemently opposed the bail application. As per the respondent, the company (Dunar Food) is liable to pay customs duty in terms of Section 12 of the Customs Act, 1962. The petitioner was supervising all the affairs of the company so he cannot claim that he is stranger to the company. The amount of the duty involved is as much as more than 170 crores based on sales for other periods even though the petitioner was arrested in respect of the evasion of duty....
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....firmed that on 19.01.2016, the petitioner was produced through video conferencing and on 02.02.2016, the petitioner was already admitted in hospital because he had complained chest pain. The judicial remand of the petitioner was extended thereafter in his presence and he did not point out this fact at that stage. Now at this stage especially in view of explanation of department, the court does not consider it as plausible ground of bail. 10. Learned counsel for the petitioner has vehemently argued on the question of levy of duty. It is neither desirable nor appropriate for this Court to consider the question of levy or exemption of duty at this stage because as pointed out by both the parties, Ld. CESTAT (Tribunal) is already seized of the matter, which is the final fact finding authority. As the counsel for the petitioner vehemently and insistently argued the question of levy of duty in support of making out a case for bail, this court is thus constrained to prime facie consider the question of levy of duty. 11. It is a conceded case of the parties that Central Excise Duty is levied under Section 3 of the 1944 Act, and proviso to Section 3 of the Act deals with levy of du....
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....ent export-oriented undertaking" means and undertaking which has been approved as a hundred per cent export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951) and the rules made under that Act; (iii) "Special economic zone" has the meaning assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005). Customs Act, 1962 Section 12. Dutiable goods. (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or exported from, India. Customs Tariff Act, 1975 Section 2. Duties specified in the schedules to be levied. The rates at which duties of customs shall be levied under the Customs Act, 1962 are specified in the First and Second Schedules. Section 3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges. ....
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.... sales tax, value added tax, local tax or any other charges for the time being leviable on a like article on its sale, purchase or transportation in India" means the sales tax, value added tax, local tax or other charges for the time being in force, which would be leviable on a like article if sold, purchased or transported in India or, if a like article is not so sold, purchased or transported, which would be leviable on the class or description of articles to which the imported article belongs, and where such taxes, or, as the case may be, such charges are leviable at different rates, the highest such tax or, as the case may be, such charge. [Emphasis supplied] 13. Learned counsel for the petitioner has pointed out that goods in question are classifiable under Chapter Heading 1006 of first schedule to Central Excise Tariff Act. Under the Column of rate of duty there is no entry (it is left blank), so goods in question i.e. rice is exempt from Excise Duty i.e. Counter Veiling Duty (CVD). It is revealed on a close scrutiny of the contents of the Show Cause Notice (Annexure P-6) that the Department has demanded, in the light of the proviso to Section 3 (1) of the 1944....
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.... the adjudicating officer have already been passed. The records are lying in the custody of the Department, thus there cannot be any apprehension of manipulation or tampering with the record. The petitioner is in custody since 05.01.2016 and the Department has already concluded the investigation, which primarily is record/document based, and also instituted the complaint on 03.03.2016 before the learned CJM, Amritsar. Still further, as per Section 9-A (2) of the 1944 Act, any offence either before or after the institution of prosecution may be compounded by the Chief Commissioner on payment of such amount and in such manner as may be prescribed. 15. Apart from above observations, this court finds that the petitioner was arrested by the Inspector and he was produced before the Learned CJM by an Inspector, namely, Mr. Dhiraj Surangi. The Central Excise Officers have power to arrest under Section 13 of the 1944 Act and after arrest, Department is bound to follow procedure prescribed under the said Act. Power to arrest is independent from disposal of person arrested. The procedure of disposal of person arrested is prescribed under Section 19 and 21 of the 1944 Act. As per Section 21....
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.... case, it is borne out from the produced record that the petitioner was forwarded to custody of Magistrate by an Inspector. It would be appropriate to consider that whether he was empowered to forward the petitioner to custody of the Magistrate. As per the relevant Notification No. 9/99-CE (N.T) dated 10.02.1999/11.05.1999 issued under the 1944 Act concededly governing the issue, only Superintendent can forward arrested person to custody of Magistrate. Based on the said instruction, a similar question has been considered and decided by the Hon'ble Jharkhand High Court in the case of Hemant Goyal Versus Union of India (2016 TIOL 992-HC-Jharkhand) decided on 25.01.2016. The relevant para Nos. 10 to 12 of the said judgment are as under:- 10. Section 19 very categorically states that every person arrested under this Act shall be forwarded without any delay to the nearest Central Excise Officer empowered to send persons so arrested to a Magistrate. 11. Section 21 is a follow up of Section 19, in which if the Central Excise Officer so empowered on enquiry into the charge against the accused, if he is of the opinion that there is sufficient evidence or reasonable ground ....