TaxTMI 
TaxTMI 
2026 (7) TMI 1937
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....search was conducted on 19.03.2026 at the business premises of M/s Hunka Traders, a proprietorship concern of the applicant situated at AB Road, Purani Chhawani, Shankarpur Tal, Industrial Area Motijheel, Gwalior, Madhya Pradesh, in exercise of powers under Section 67(2) of the C.G.S.T. Act read with Section 12F of the Central Excise Act, 1944. 3. During search proceedings conducted in the presence of independent panch witnesses, it was found that the applicant, while portraying himself as a trader of detergent and scented tobacco, was engaged in illegal manufacture and packing of chewing tobacco, zarda and scented tobacco pouches through packing machines installed in the premises. It is alleged that two electricity-operated single-track packing machines were found installed in the premises. One machine bearing Motor No. PGD 65315 was operational having packing capacity of approximately 105 pouches per minute and the second machine, though claimed by the applicant to be non-functional, was installed with electric panel switch VFD-L RS-485 and allegedly capable of production at 115-120 pouches per minute. 4. The raw tobacco, perfume/flavour and menthol were mixed in a mixer ma....
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....ild. The investigation is substantially documentary in nature and all relevant documents, machinery and goods have already been seized, therefore, there is no requirement of custodial interrogation and also there is no possibility of tampering with evidence or influencing witnesses. 7. Additionally, it is further argued that at this stage, private complaint has already been filed and charges thereupon have already been framed. None of the offences, alleged against the present applicant, are punishable more than seven years of imprisonment. The applicant has already suffered four months' pretrial detention. It is further contended that all the prosecution witnesses are official witnesses, therefore, there is no possibility of winning over the prosecution witnesses. The co-accused namely- Ramu Gupta, has already been enlarged on bail by this court vide order dated 25.06.2026 passed in M.Cr.C. No.21372 pf 2026, under the similar facts and circumstances, therefore, applicant seeks parity also. 8. Learned counsel for the applicant relied upon certain judgements which have been passed from time to time and the same are reproduced herein for ready reference:- 9. This Court ha....
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....ly manufacturing and packing tobacco products through undeclared packing machines in violation of Rule 6 and Rule 22 of the Chewing Tobacco, Zarda, Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026. The applicant intentionally concealed existence and use of the machines from the department. He also evaded central excise duty and cess. The Notification No. 04/2025-Central Excise dated 31.12.2025 clearly prescribed fixed monthly duty liability based upon installed machine capacity. The offence is serious economic offence affecting public revenue and national economy. The statements recorded under Section 70 of the CGST Act establish involvement of the applicant. The applicant failed to disclose supplier details, purchaser details and source of raw materials. If the applicant is enlarged on bail, the applicant may tamper with evidence or influence witnesses. The offence under Section 9 read with Section 9A(1A) of the Central Excise Act is of non-bailable nature. Even, the applicant failed to cooperate during interrogation even while in judicial custody. 11. It is further argued that the present applicant is accused of not only t....
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....) 7 SCC 439, and State of Gujarat v. Mohanlal Jitamalji Porwal, AIR 1987 SC 1321, as well as the decisions of the Rajasthan High Court in Rajesh Goyal v. Union of India (supra) and Amal Mubarak Salim Al Rayami v. Union of India(supra), to contend that economic offences stand on a different footing and deserve a stricter approach while considering bail. 17. There cannot be any quarrel with the proposition laid down in Y.S. Jagan Mohan Reddy (supra) that economic offences are serious in nature and affect the economy of the country. Similarly, the observations made in Mohanlal Jitamalji Porwal (supra) emphasise that deliberate tax evasion adversely affects public interest. 18. However, it is equally well settled that neither of the aforesaid judgments lays down an absolute proposition that bail must invariably be refused in every economic offence irrespective of the facts of the individual case. 19. The Hon'ble Supreme Court in Arnesh Kumar v. State of Bihar, (supra), while dealing with offences punishable up to seven years, has held that arrest is not to be made routinely and deprivation of liberty must be justified by compelling reasons. 20. The principles governing ....