2021 (9) TMI 654 - HC - Central Excise

Seeking grant of Bail - detention of finished goods against the pending government dues - violation of the undertaking given by the applicant on 10.11.2016 with regard to non-disposal of goods and to keep them in safe custody - HELD THAT - The undertaking reveals that applicant has declared neither to claim or demand owner-ship of the goods. It is alleged that the applicant has sold the goods after giving such undertaking. The documents in this regard also reveal that final order with regard to detention of the goods to recover government dues was passed on 20.04.2017. Thus, there is delay of more than four years in registration of the FIR as despite having knowledge of selling / detention of goods, the FIR has been filed on 19.04.2021. Considering the facts of the case, the custodial interrogation of the applicant at this stage is not necessary - the applicant is ordered to be released on bail in the event of his arrest, on his executing a personal bond of ₹ 10,000/- with one surety of like amount on the following conditions - application allowed.

Summary

Issues:
Bail application under Section 438 of CrPC for offences under IPC Sections 406, 420, and 424 - Delay in FIR registration - Violation of undertaking regarding goods disposal - Anticipatory bail granted.

Analysis:

Issue 1: Bail Application under Section 438 of CrPC
The applicant sought bail under Section 438 of the Code of Criminal Procedure for offences under Sections 406, 420, and 424 of the Indian Penal Code related to non-payment of Central Excise Duty. The applicant's counsel argued that the department did not follow prescribed procedures for detaining goods and that there was no outstanding demand against the company. The delay in registration of the FIR, lack of demand notice under Section 11 of the Central Excise Act, and the closure of the factory were highlighted to support the bail application.

Issue 2: Delay in FIR Registration
The FIR alleged non-payment of duty from July 2015 to September 2016, with goods detained in November 2016. However, the FIR was registered in March 2021, indicating a significant delay. The applicant's counsel argued that this delay was unexplainable and an afterthought, emphasizing that the company was already in liquidation proceedings by the time the FIR was filed. The delay raised questions about the validity and timing of the allegations.

Issue 3: Violation of Undertaking Regarding Goods Disposal
The core allegation against the applicant was the violation of an undertaking given in November 2016 not to dispose of goods and to keep them in safe custody. The applicant was accused of selling the goods despite the undertaking, leading to a delay in the final order for detention of goods in April 2017. The court noted the delay in FIR registration and the lack of custodial interrogation necessity, leaning towards granting anticipatory bail based on the circumstances presented.

Conclusion
Considering the delay in FIR registration, the nature of the alleged offences, and the applicant's cooperation with the investigation, the court granted anticipatory bail. The court imposed specific conditions, including cooperation with the investigation, appearance at the police station, and restrictions on leaving the country. The court also cited relevant legal precedents and clarified the process for potential police remand. The order emphasized that the observations made were prima facie and should not influence the trial court. The applicant was directed to comply with the conditions set forth in the anticipatory bail order.