2011 (1) TMI 1216 - HC - Central Excise

Compounding of offence under Section 9 - Whether bail should be granted or not Search conducted on the factory premises and godown of the petitioner - Found three pouch packing machines and one Tobacco Mixture machine ,finished goods, raw Tobacco, packing materials - These machines were found not to have been declared by the firm - Officer seized all these machines and materials - Petitioner was found to have evaded the excise duty. It is true that the alleged offence is non-cognizable and also compoundable as envisaged by Section 9A of the Act of 1944, but the amount of excise duty, the petitioner is found to have evaded, is undoubtedly large and shocking - It amounts to Rs. 338.25 lac - Therefore the act of the petitioner may be termed as Royal Thievery which is opposed to both democracy and society order. Held that - Since, accused petitioner has evaded the excise duty causing a great loss to the public exchequer, and the offence being of grave nature, therefore petitioner should not be allowed bail. Bail petition filed dismissed.

Summary

Issues:
Bail application under Section 439 of Cr. P.C. in a case under Section 9 of the Central Excise Act, 1944.

Analysis:
The judgment concerns a bail application filed by the accused-petitioner, who is the Director of a company, against whom the Anti-Evasion Wing of the Central Excise Department conducted a search and found unregistered machines and finished goods in the factory premises. The accused-petitioner was alleged to have evaded excise duty amounting to Rs. 338.25 lac. The petitioner's counsel argued that the tax liability was based on presumptions and that the petitioner was falsely implicated. The Union of India contended that the liability was in accordance with the Rules of 2010 and opposed bail, stating that the accused evaded duty causing a significant loss to the public exchequer.

The court considered the arguments presented by both parties and acknowledged the seriousness of the offence, noting the substantial amount of excise duty evaded. The court highlighted the detrimental impact of tax evasion on the economy and society, describing it as a form of corruption and emphasizing the importance of curbing such practices to maintain socio-economic stability. The court concluded that the act of the petitioner could be likened to "Royal Thievery" and refused to grant bail, deeming the offence grave in nature.

Ultimately, the court dismissed the bail petition, emphasizing the gravity of the offence and the significant amount of excise duty evaded. The judgment underscores the court's stance against economic offences and the importance of upholding tax compliance to prevent adverse impacts on the economy and society.