Central Excise Officers duly authorized by the Central Government have the power to arrest a person without a warrant if they have reason to believe that the person is liable to be punished under the Central Excise Act, 1944.

Jawahar Lal Gupta, J.

1. Is a Central Excise Officer debarred from arresting a person without a warrant despite the fact that he has reasons to believe that the person is liable to be punished under the Central Excise Act, 1944? This is the short question that arises for consideration in these two writ petitions. Learned Counsel for the parties have referred to the facts in C.W.P. No. 1647 of 1999. These may be briefly noticed.

2. The petitioner is the Managing Director of M/s. GCUL Limited. This company has its registered office in Village Khandsa, District Gurgaon. It is engaged in the manufacture and export of terry towels. The petitioner claims that

#28;the company is a 100% Export Oriented Unit.#29; It is #28;exempted from paying the Central Excise Duty on the terry towels being manufactured and exported.....#29;

3. Till July, 1996, Mr. S.K. Aggarwal was working as the General Manager of the Company. He was looking after the day to day affairs and was #28;the authorised signatory as far as the Central Excise Act, 1944 ..... is concerned.#29; He worked as General Manager till July, 1996. After that, Mr. Sandeep Aggarwal was authorised by a resolution dated July 12, 1996. A copy of the resolution has been produced as Annexure P.1 with the writ petition. The petitioner alleges that the copy of the resolution was #28;duly communicated to the persons concerned in the respondent department for their information, record and necessary action at their end.#29; He was #28;in no way connected with the day to day functioning of the company and basically was only looking after the marketing operations .... and usually remains abroad for about six months in a year for the purpose of securing orders and also ensuring the payments for the materials already supplied .....#29; It has been averred that during the year 1997-98, the Company has earned foreign exchange to the tune of Rs.19 crores. During the current year till the filing of the petition, the Company had earned about Rs. 31 crores in foreign exchange.

4. On July 8, 1978, the factory premises of the company were searched. The books of account etc. were seized. Even though an #28;evasion of the Central Excise Duty to the tune of Rs. 40 crores#29; was alleged, yet #28;no show cause notice...... has been issued to the Company.#29; According to the petitioner, Mr. S.K. Aggarwal had indulged in certain #28; mala fide activities along with Shri Umesh Chander Verma, Store Incharge#29; and managed #28;some inward raw material from certain firms situated in the States of Gujarat and Maharashtra.#29; Shri Sandeep Aggarwal had taken over from Shri S.K. Aggarwal. However, #28;on allurement from Shri Umesh Chander Verma, Store In-charge, Shri Sandeep Aggarwal, Director (works) also fell prey to the same attitude of destroying the company by indulging into the issuance of the receipt of raw material on the papers only by issuing form CT-3 and possibly for obtaining undue gain for themselves.#29; The petitioner states that #28;the allegations are that the entire raw material which was supposed to have been received in the factory premises of the Company was diverted elsewhere with the active connivance of the officers of the Central Excise Department.#29; After the search and seizure, the petitioner, Mr. Sandeep Aggarwal and Mr. Umesh Chander Verma, Store Incharge, were called by the respondent authorities. The statement of the petitioner was recorded in the months of September, October and November, 1998. Even the statements of the other persons were recorded. The petitioner complains that #28;the respondent authorities are bent upon (sic) to arrest him on account of the alleged evasion of Central Excise Duty.#29; A copy of the notice dated November 19, 1998 issued by the Intelligence Officer has been produced as Annexure P.7. This order was issued #28;in view of ex parte order dated 14-10-1998 in Criminal Misc. No. 27364-M of 1998 passed by Hon#25;ble Court .......#29; The petitioner