2009 (10) TMI 836 - HC - Central Excise

Arrest made by the respondent No. 3 in purported exercise of power conferred under Section 13 of the Central Excise Act, 1944 whether unconstitutional and unlawful? Held that - Respondent No. 3 never appears to have acted without jurisdiction in the matter of arrest of the petitioner nor the proceeding pending before the Special Judge (Economic Offences), Dhanbad including the order dated 18-5-2009 is bad except that part of the order wherein it has been stated that bail bond of the petitioner shall be cancelled on account of non-observance of direction contained therein which part of the order stands quashed.

Issues Involved:
1. Legality of the arrest under Section 13 of the Central Excise Act.
2. Validity of the proceeding in C.O. No. 1 of 2009.
3. Challenge to the order dated 18-5-2009 directing the petitioner to authenticate printouts from the seized Laptop.

Detailed Analysis:

1. Legality of the Arrest under Section 13 of the Central Excise Act:

The petitioner challenged his arrest by invoking the extraordinary jurisdiction of the court under Article 226 of the Constitution of India, arguing that the arrest made by the respondent was unconstitutional and unlawful. The petitioner contended that the offences under Section 9 of the Central Excise Act are non-cognizable as per Section 9A of the Act, thus requiring a warrant for arrest.

The court analyzed the provisions of the Central Excise Act, particularly Sections 9, 9A, 13, 18, and 21. It was held that Section 13 empowers a Central Excise Officer to arrest any person whom he has reason to believe is liable to punishment under the Act, without the need for a warrant. The court emphasized that the power of arrest under Section 13 is not curtailed by Section 9A, which deems the offences to be non-cognizable. Instead, Section 18 merely requires that the procedures for arrest and search follow the provisions of the Code of Criminal Procedure.

The court relied on the principle of harmonious construction, stating that the intention of the Legislature was not to restrict the Central Excise Officer's power to arrest but to ensure that the procedures are followed as per the Code of Criminal Procedure. The court also referenced the Punjab & Haryana High Court's decision in Sunil Gupta v. Union of India, which supported the view that the Central Excise Officer's power to arrest is absolute and not limited by the non-cognizable nature of the offences under Section 9A.

2. Validity of the Proceeding in C.O. No. 1 of 2009:

The petitioner sought to quash the proceeding in C.O. No. 1 of 2009, arguing that the prosecution was initiated without a proper complaint or FIR and that the matter was still under investigation. The petitioner also referred to an executive instruction that prosecution should not be initiated until the matter is adjudicated.

The court examined the application that initiated the proceeding and noted that it appeared to be an offence report rather than a formal complaint, as the investigation was still ongoing. The court found that the proceeding was legitimate, as it was based on an offence report indicating ongoing investigation, and thus did not require a formal complaint under Section 200 of the Code of Criminal Procedure.

The court also referenced the Supreme Court's decision in Directorate of Enforcement v. Deepak Mahajan, which held that detention authorized by a Magistrate under similar provisions of the FERA and Customs Act is valid. Thus, the court concluded that the proceeding in C.O. No. 1 of 2009 was not illegal.

3. Challenge to the Order Dated 18-5-2009 Directing the Petitioner to Authenticate Printouts:

The petitioner challenged the order dated 18-5-2009, which directed him to authenticate printouts taken from the seized Laptop, arguing that it violated Article 20(3) of the Constitution of India, which protects against self-incrimination.

The court analyzed whether the act of authentication would be self-incriminatory. It found that the printouts were taken in the presence of the parties and only required authentication to avoid further complications. The court determined that simple authentication of the documents did not amount to self-incrimination, as it did not involve confirming the information contained in the printouts.

However, the court quashed the part of the order that stated the petitioner's bail bond would be canceled for non-compliance, noting that the consequences of non-compliance are already provided under Section 14 of the Central Excise Act.

Conclusion:

The court held that the arrest of the petitioner by the Central Excise Officer was lawful and within jurisdiction. The proceeding in C.O. No. 1 of 2009 was also found to be legitimate and not an abuse of process. The order dated 18-5-2009 was upheld, except for the part concerning the cancellation of the bail bond, which was quashed. The application was allowed in part to the extent indicated.

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