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2016 Supreme(P&H) 1118
IN THE HIGH COURT OF PUNJAB AND HARYANA
Before
The Hon’ble Mr. Justice Jaswant Singh
CRM-M No. 14587 of 2016 (O&M)
Mandeep Singla
v.
State of Punjab & Ors.
{Decided on 08/07/2016}
For the Petitioner:Mr. Manoj K. Singh, Advocate, Mz. Madhu Dayal, Advocate, Mr. Vishal Garg, Advocate.
Mr. Kirat Singh Sidhu, Deputy Advocate General, Punjab.
Mr. Satya Pal Jain, Sr. Advocate assisted by Mr. Sunish Bindlish, Sr. Standing Counsel, Indirect Taxation.
Headnote:(A) Criminal Procedure Code, 1973, S.439--Bail--Evasion of duty--Sale in Domestic Tariff Area by 100% export house--Petitioner was arrested by Inspector of Police and presented to Magistrate where as he was to be presented by Central Excise Officer--Held; at least a strong case for grant of bail is made out--Bail granted--Central Excise Act, 1944, S.3. (Para 15)
(B) Criminal Procedure Code, 1973, S.439--Bail--Evasion of duty--Sale in Domestic Tariff Area by 100% export house--Matter was pending for last more than 5 years and nothing new had occurred which prompted the department to take harsh action of arrest--Further, it is an economic offence where separate Assessment/Adjudication proceedings are going on--It is not a case of mass level cheating, where except criminal trial no effective remedy was available--In the present case, if the department succeeds in adjudication, the department shall have all rights to recover the dues--Bail granted--Central Excise Act, 1944, S.3. (Para 16)
Company cleared goods during last couple of years and continued to reflected in their records and also filed their returns with the Department, thus, it is not an isolated instance of clearance of goods--The respondent-Department continued to issue Show Cause notices and in respect of prior periods even orders by 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. (Para 16)
Mr. Jaswant Singh, J.:- CRM No. 15390 of 2016
The petitioner has filed the application for placing on record orders dated 02.12.2013 and 20.10.2014 passed by Customs Excise & Service Tax Appellate Tribunal, and order dated 15.07.2014 passed by a Division Bench of this Hon’ble Court as Annexures P-9, P-10 & P-11, respectively.
CRM allowed and P-9 to P-11 are taken on record.
MAIN CASE
1. The present application/petition under Section 439 Cr.P.C. has been filed by the accused-petitioner seeking grant of regular bail in criminal complaint bearing No. 1766/2016 dated 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 the said Show Cause Notice, the duty has been demanded from the said company and penalty under Rule 26 of the Central Excise Rules, 2002 has been proposed against the petitioner. As per show cause notice, M/s Dunar Foods Ltd. has cleared in Domestic Tariff Area (DTA) goods i.e. broken rice, basmati rice (small size), rice bran and basmati rice without payment of duty leviable in terms of proviso to Section 3 of the 1944 Act.
4. The petitioner has raised below mentioned contentions in the bail application as well as during the course of arguments:-
(i) The petitioner is neither a Director nor a Share Holder of the company. He is not an employee and not deriving any kind of benefit from the company. He is merely a relative of the Director of the company who happens to be his maternal uncle (Mama).
(ii) The respondent has arrested the petitioner in respect of demand raised vide Show Cause Notice dated 06.01.2016 and the petitioner has no concern with the demand raised on earlier occasions.
(iii) The Company is a 100% Export Oriented Unit (EOU) and selling its products in domestic tariff area. The Company is liable to pay excise duty which is computed as aggregate of customs duty. As per judgment of Hon’ble Supreme Court, it is not customs duty which is payable but it is excise duty.
(iv) The process carried out by the company is milling of rice from paddy and it does not amount to manufacture, resultantly Section 3 of the Act itself is not invokable.
(v) The rate of duty in Chapter 10 of first schedule to the Central Excise Tariff Act, 1985 is blank so no duty is payable.
(vi) The learned Customs Excise and Service Tax Appellate Tribunal (for short ‘Tribunal’) has already stayed recovery of Rs. 11 crores. The Tribunal in its order dated 02.12.2013 (Annexure P-9) has observed that how the mathematical exercise shall be made when the rate of duty does not appear in excise tariff.
(vii) The petitioner was arrested for alleged evasion of duty amounting to Rs. 25 crores and the department has filed complaint with respect to duty amounting to Rs. 29 crores.
(viii) The maximum sentence prescribed for the alleged offence is 7 years so the respondent could be arrested only in the case of reasons and ne
