Central Excise - Arrest and Prosecution - Board issues instructions
Board has reiterated its earlier instructions that the inspector can arrest; that prosecution may be launched when duty involved is Rs. 25 Lakhs or more; that prosecution may be considered of habitual offenders even for lesser amount of duty that Chief Commissioner has the power to sanction prosecution.
Board feels that arrest and prosecution are effective tools to tackle evasion and to raise tax compliance levels. So, the Board wants the best possible use of these provisions by following the Board instructions scrupulously.
How to launch Prosecution?
You have arrested a person, got the sanction of the Chief Commissioner to prosecute him but how do you really proceed to prosecute him? The long journey of prosecution starts with filing a complaint. Now for an offence under Central Excise, who is to file the complaint? Neither under the Central Excise Act nor under the Customs Act, any officer has been specified as one authorised to file a complaint.
Under the Drugs and Cosmetics Act, an Inspector has been authorised to institute prosecution. Under the Companies Act, the Registrar is authorised to file a complaint. In our related Acts, under the FERA, the Director of Enforcement and certain other officers were authorised to file a complaint. Even under the old Sea Customs Act, the complaint had to be filed by the Chief Customs Officer or an Officer authorised by him not below the rank of Assistant Collector. The old Central Excise Rules also had a provision that no charge of an offence can be made by an officer inferior to an inspector. There are judicial decisions especially an interesting one in which an accused was found to have evaded excise duty and was so liable for punishment. He was required to take licence but did not do so and was liable for conviction; he forged gate passes and could have gone to jail on every charge but the court discharged him for the simple reason that the Assistant Collector was not competent to file the complaint.
It is time the Board seriously considered this lapse.
Board's F.No. -6, Dated June 15, 2007