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2015 (6) TMI 620 - HC - Central ExciseValidity of arrest of Petitioner - Held that - Summons was served on the petitioner and he was called to Pune to appear before the empowered officer. He failed to comply with this summons. Authorization of arrest was then given. It is submitted for the Department that Excise Officer empowered to arrest person like the petitioner was at Pune and so the petitioner was taken to Pune. Admittedly the petitioner was produced before the Magistrate from Pune by such empowered officer and within the prescribed period. It is non bailable offence and the Magistrate refused bail to the two sons of the present petitioner. Even the Sessions Court refused bail and the High Court granted bail subject to aforesaid conditions to the sons of the petitioner. Only due to the circumstance like petitioner s old age, the Magistrate granted him bail. - The competent officer at Pune has the power under section 21 of the Act which is similar to the power of the officer in charge of a police station. Such officer produced the petitioner before the Magistrate of Pune and within the prescribed period. There is provision in the Act like section 22 taking care of search, seizure etc. Thus no relief as claimed by the petitioner can be given in the present case. - Decided against assessee.
Issues Involved:
1. Legality of the petitioner's arrest. 2. Legality of the seizure of Rs. 45 lakh. 3. Validity of adjudication proceedings under the Central Excise Act. 4. Return of the seized amount to the petitioner. Detailed Analysis: 1. Legality of the Petitioner's Arrest: The petitioner argued that his arrest was illegal and that the offense was bailable. However, the court noted that the material collected indicated the creation of false records for evasion of excise duty, amounting to forgery and fraud. The evasion involved goods worth more than Rs. 140 crore, making the offense cognizable and non-bailable under sections 9, 9-A, and 9-AA of the Central Excise Act. The court referenced the Rajasthan High Court case (2006) 202 CTR Raj 231 (Harvest Gold Food (India) Pvt. v. Union of India) to support this position. The court concluded that the arrest was legal, as the empowered officer issued a summons, and the petitioner failed to comply, leading to his arrest and subsequent production before the Magistrate within the prescribed period. 2. Legality of the Seizure of Rs. 45 Lakh: The petitioner claimed that the seizure of Rs. 45 lakh was illegal and sought its return, arguing that the show cause notice was not issued within six months from the date of seizure, as required under section 110(2) of the Customs Act. The court examined the relevant provisions of the Customs Act, including sections 105, 110, 115, 118, 119, 120, 121, and 124, which were made applicable to the Central Excise Act via Notification No.68/63-C.E. The court noted that the definition of "goods" under section 2(22) of the Customs Act includes currency, and thus, the seized amount fell within this definition. The court acknowledged that the law required issuing a notice within six months for confiscation but highlighted the petitioner's involvement in the business and the lack of a plausible explanation for possessing such a large amount of cash. Consequently, the court held that the amount could not be returned to the petitioner. 3. Validity of Adjudication Proceedings: The petitioner sought to quash the adjudication proceedings against him, arguing that he was merely a shareholder and not involved in the company's activities. The court, however, found sufficient material indicating the petitioner's active involvement in running the business and collecting sale proceeds. The court referenced the case of Commissioner of Customs v. M/s Charminar Nonwovens Ltd. (AIR 2004 SC 3328) to support the continuation of the proceedings. The court concluded that the adjudication proceedings for confiscation and imposition of penalties could proceed against the petitioner. 4. Return of the Seized Amount: The petitioner argued for the return of the seized Rs. 45 lakh, citing the failure to issue a show cause notice within the prescribed period. The court examined the relevant provisions and noted that the amount was kept in a fixed deposit by the Excise Department. The court emphasized the petitioner's involvement in evading excise duty and the lack of evidence to support his claim of legitimate income. The court also highlighted the petitioner's undertaking not to dispose of the property, given to secure bail for his sons. The court concluded that returning the amount would effectively dispose of the property, which could be attached under various provisions. Therefore, the court denied the relief of returning the seized amount. Conclusion: The court dismissed the writ petition, upholding the legality of the petitioner's arrest, the seizure of Rs. 45 lakh, and the continuation of adjudication proceedings. The court emphasized the petitioner's active involvement in the business and the evasion of excise duty, justifying the actions taken by the authorities. A copy of the order was directed to be sent to the Income Tax Office in Jalna for further action.
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