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TMI Blog2016 (7) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has argued that it is an economic offence and no leniency should be shown. The counsel has ignored the fact that matter is pending for last more 5 years and nothing new had occurred in Jan’2016 which prompted the department to take harsh action of arrest. Further, it is an economic offence where separate Assessment/Adjudication proceedings are going on. It is not a case of mass level cheating, as involved in the cited and relied case, where except criminal trial no effective remedy was available. In the present case, if the department succeeds in adjudication, the department shall have all rights to recover the dues. So, the contention of Department is repelled. Bail granted on furnishing of bail bond of ₹ 5 lacs with two sureties of equal amount. - CRM-M No. 14587 of 2016 (O&M) - - - Dated:- 8-7-2016 - Jaswant Singh, J. For the Petitioner : Mr. Manoj K. Singh, Advocate, Mz. Madhu Dayal, Advocate, Mr. Vishal Garg, Advocate For the Respondent : Mr. Kirat Singh Sidhu, Deputy Advocate General, Punjab Mr. Satya Pal Jain, Sr. Advocate assisted by Mr. Sunish Bindlish, Sr. Standing Counsel, Indirect Taxation JUDGMENT Jaswant Singh, J. CRM No. 15390 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and not deriving any kind of benefit from the company. He is merely a relative of the Director of the company who happens to be his maternal uncle (Mama). (ii) The respondent has arrested the petitioner in respect of demand raised vide Show Cause Notice dated 06.01.2016 and the petitioner has no concern with the demand raised on earlier occasions. (iii) The Company is a 100% Export Oriented Unit (EOU) and selling its products in domestic tariff area. The Company is liable to pay excise duty which is computed as aggregate of customs duty. As per judgment of Hon ble Supreme Court, it is not customs duty which is payable but it is excise duty. (iv) The process carried out by the company is milling of rice from paddy and it does not amount to manufacture, resultantly Section 3 of the Act itself is not invokable. (v) The rate of duty in Chapter 10 of first schedule to the Central Excise Tariff Act, 1985 is blank so no duty is payable. (vi) The learned Customs Excise and Service Tax Appellate Tribunal (for short Tribunal ) has already stayed recovery of Rs. 11 crores. The Tribunal in its order dated 02.12.2013 (Annexure P-9) has observed that how the mathematical exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is statement, he has admitted that he was looking after production and other activities of the company and Managing Director of the Company is his maternal uncle (Mama). The other employees of the companies had also confirmed that they were getting instructions from the petitioner. In these circumstances, it is fallacious on the part of the petitioner to canvass that he is not concerned with the company. 8. Learned counsel for both the parties cited few judgments relating to goods sold by EOU, inviting duty based on the un-amended proviso to Section 3 of the Act which contained the phrase allowed to be sold in India . Court finds that Section 3 has been amended w.e.f 11.05.2001 and proviso to said Section has been substituted with phrase brought to any other place in India meaning thereby duty would be attracted irrespective of permission accorded or not to sell goods in Domestic Tariff Area by Development Commissioner, the competent authority constituted under Foreign Trade (Development and Regulation) Act, 1992 unless goods sold are notified to be duly exempted or within permissible limits. Therefore, all the judgments which are dealing phrase allowed to be sold in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional Customs Duty and Special Additional Duty as per the statutory provisions. 12. The relevant statutory provisions i.e. proviso of Section 3 of the Central Excise Act, 1944, Section 12 of the Customs Act, 1962 and Section 2, 3(1) and 3(5) of the Customs Tariff Act, 1975 are reproduced for ready reference as under:- Proviso to Section 3(1) of the Central Excise Act, 1944: Provided that the duties of excise which shall be levied and collected on any excisable goods excluding goods produced or manufactured in special economic zones which are produced or manufactured- (i) xxxxxxx (ii) by a hundred per cent export-oriented undertaking and brought to any other place in India, Shall be an amount equal to the aggregated of the duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured in different States or, if a like alcoholic liquor is not produced or manufactured in any State, then, having regard to the excise duty which would be leviable for the time being in different States on the class or description of alcoholic liquor to which such imported alcoholic liquor belongs. Explanation.- In this sub-section, the expression the excise duty for the time being leviable on a like article if produced or manufactured in India means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty. (2), (3) (4) xxxxxxx (5) If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article whether on such article duty is leviable under subsection (1) or, as the case may be, sub-section (3) or not such additional duty as would counter-balance the sales tax, value added tax, local tax or any other charges for the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions and final adjudication by the learned Tribunal in the pending litigation between the parties. Learned counsel for the petitioner next argued that the goods are eligible for exemption in terms of Notification No. 23/2003 issued under Section 5-A of the 1944 Act. There is nothing on record to indicate that whether goods had been sold with or without permission of Development Commissioner. There is also nothing on record that whether goods were sold within permissible limits or not, even though counsel for the petitioner has fairly admitted that sale in Domestic Tariff Area (DTA) was more than permissible 50% of the goods exported. It is not disputed that the Company has manufactured the goods and did not clear (i.e. sold in the domestic area) in a clandestine manner, and their returns were duly filed, as acknowledged the show cause notice (P-6). The Department has collected figures from the record maintained by the Company. Therefore, it would be for the learned Tribunal to interpret and decide as to whether or not the goods sold/cleared by the Company/petitioner would be covered under the exemption notification and thus not liable to pay any duty. 14. As regards the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, if there is no such Central Excise Officer within a reasonable distance to the officer-in-charge of the nearest police station. (21). Inquiry how to be made by Central Excise Officers against arrested persons forwarded to them under section 19 (1) When any person is forwarded under section 19 to a Central Excise Officer empowered to send persons so arrested to a Magistrate, the Central Excise Officer shall proceed to enquire into the charge against him. (2) For this purpose the Central Excise Officer may exercise the same powers and shall be subject to the same provisions as the officer-in-charge of a police station may, exercise and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898) when investigating a cognizable case; Provided that- (a) if the Central Excise Officer is of opinion that there is sufficient evidence or reasonable ground of suspicion against the accused person, he shall either admit him to bail to appear before a Magistrate having jurisdiction in the case, or forward him in custody to such Magistrate; (b) if it appears to the Central Excise Officer that there is not sufficient evidence or reasonable ground o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions 19 and 21 of the Act, This contention has not been controverter either in the counter affidavit or in course of argument and with respect to authorization what has been stated in the counter affidavit is with respect to Section 13 of the Act, which relates to power to arrest and which power was delegated to respondent no. 2 by the Additional Director General of Central Excise, Intelligence, Kolkata Zonal Unit. The power of arrest as envisaged in Section 13 of the Act does not co relate with sections 19 and 21 of the Act. The respondent no. 2 may have been given the power to arrest, which he had exercised but nothing has been indicated as to whether he was empowered to send such person arrested to a Magistrate in order to forward him to judicial custody. In absence of any authorization to act in terms of Sections19 and 21 of the Central Excise Act, 1944, the remand of the petitioner pursuant to the prayer made by an officer not authorized to forward the petitioner for remand, the consequent order of remand dated 21.12.2015 automatically gets vitiated. It has been submitted at the Bar by the learned counsel for the petitioner that the remand of the petitioner is being extended ..... X X X X Extracts X X X X X X X X Extracts X X X X
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