2016 (6) TMI 830 - HC - Central Excise

Evasion of duty of excise - Anticipatory bail - MRP based valuation - valuation dispute of ceramic tiles - difference of Maximum Retail Price and the product sold at more than the Maximum Retail Price - clandestine removal of goods by the manufacturer. - the applicants are ready and willing to pay 50% of the Central Excise duty reserving all their rights to contend at an appropriate time in accordance with law to such proposal. He has also submitted that there is no dispute nor any objection qua the ongoing investigation. Held that - the applicants are ordered to be released on anticipatory bail in the event of their arrest - The applicants shall deposit 50% amount of central excise duty demanded i.e. the amount of ₹ 50,00,000/- ( Rupees Fifty Lakh only) (rounded off) within a period of 15 days (fortnight) - Granted relief subject to conditions.

Summary

Issues:
Application for anticipatory bail under section 438 of the Code of Criminal Procedure, 1973 in connection with evasion of central excise duty.

Analysis:
The applicants sought anticipatory bail in connection with a case registered under the Central Excise Act, 1944. They argued that their company, a top ceramic tile producer, had not sold products above Maximum Retail Price or received cash exceeding the MRP. The offense under section 9 of the Act is non-bailable and carries severe penalties for duty evasion exceeding ?1 crore. The respondents alleged that the company issued invoices with lower MRP, collecting the price difference in cash. The prosecution claimed evasion of approximately ?2,01,06,434 by the company.

Judgment:
After hearing both sides, the Court accepted the applicants' proposal to pay 50% of the central excise duty demanded, amounting to ?50,00,000, within 15 days. The applicants were granted anticipatory bail upon fulfilling conditions, including providing sureties, cooperating with the investigation, refraining from influencing witnesses, and surrendering passports. The Court allowed the authorities to seek remand if necessary, emphasizing that trial courts should not be influenced by the bail order's observations. The deposit was made without prejudice to the applicants' right to challenge it. The judgment concluded by directing bail before the trial court and permitting direct service.