Jharkhand High Court
Nirmal Kumar Agarwal vs Union Of India ..... Opp. Party on 24 April, 2018
Author: Anant Bijay Singh
Bench: Anant Bijay Singh
IN THE HIGH COURT OF JHARKHAND AT RANCHI
A.B.A. No. 477 of 2018
1. Nirmal Kumar Agarwal
2. Kanhiya Kejriwal
3. S.N. Goswami ..... Petitioners
Versus
Union of India ..... Opp. Party
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CORAM: HON'BLE MR. JUSTICE ANANT BIJAY SINGH
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For the Petitioners : Mr. Nitin Pasari, Advocate. For the UOI : Mr. Ratnesh Kumar, Advocate.
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05/Dated: 24/04/2018 Three petitioners are apprehending their arrest in connection with Complaint Case No. 2550 / 2017, registered and cognizance was taken under Section 9 and 9AA of the Central Excise Act, 1944 and under Section 89 (1)(b) of the Finance Act, 1994, pending in the court of learned Special Judge, Economic Offences, Jamshedpur, lodged on the basis of one Complaint Case No. 2550 / 2017 filed by Union of India, through Shri Ashutosh Kumar, Assistant Commissioner, Central GST and Central Excise Division - III, Jamshedpur.
2. The present case has been registered on the basis of a complain given by Union of India through Sri Ashutosh Kumar, Assistant Commissioner Central GST, and Central Excise Division III, Jamshedpur alleging therein that M/s Adhunik Alloys & Power Limited, Kandra Chowk, Kandra, Saraikela Kharsawan, Jharkhand (hereinafter referred to as AAPL) having registered with the Central Excise Registration No.AAECA5290RXM001 and engaged in the manufacture of Sponge Iron and Iron & Steel products classifiable under chapter 72 of the first schedule to the Central Excise Tariff Act, 1985.
That the petitioner no. 1 Nirmal Kumar Agarwal was the Managing Director, petitioner no. 2, Kanjaiya Kejriwal, was the Assistant General Manager (Accounts & Finance) and petitioner no. 3 S.N. Goswami was the Manager (Commercial) of M/s Adhunik Alloys & Power Limited and during the period from 2011-12 to 2012-13 manufactured their finished product i.e. -2- Sponge Iron and Iron & Steel products and paid Central Excise Duty on clearance of these products by availing CENVAT Credit of duty paid on input and input services.
That AAPL have been working within the purview of the provisions of the Central Excise Act, 1944 and rules made thereunder, and therefore, are liable to pay Central Excise Duty on transaction value of the goods manufactured and cleared from there factory as well as to avail CENVAT Credit of duty paid on input and input services correctly and to follow the procedures as prescribed under the provisions of the Central Excise Act, 1944 and rules made thereunder.
That during aforesaid period from 2011-12 to 2012-13 petitioner no.1, Shri Nirmal Kumar Agarwal was the Managing Director of AAPL and thus was in charge of and responsible to the company for the conduct of its business. He was looking after the entire works of the company.
That during aforesaid period from 2011-12 to 2012-13 petitioner no.2, Sri khanhaiya Kejriwal, Assistant General Manager (Commercial), AAPL has abetted in fabricating the documents on the basis of which AAPL has claimed/ availed irregular CENVAT Credit under the CENVAT Credit Rules, 2004 and caused huge loss to the Government revenue. On his act of abetment, fraud, collusion, willful mis-statement and suppression of material facts, the irregular CENVAT credit has been availed by AAPL.
That during aforesaid period from 2011-12 to 2012-13 petitioner no.3, Sri S.N.Goswami, Manager (Commercial) AAPL, has abetted in fabricating the documents on the basis of which AAPL has claimed/ availed irregular CENVAT Credit under the CENVAT Credit Rules, 2004 and caused huge loss to the Government revenue. On his act of abetment, fraud, collusion, willful mis-statement and suppression of material facts, the irregular CENVAT credit has been availed by AAPL.
-3-Further, it is alleged that AAPL by way of their aforesaid act of fraud, collusion, willful mis-statement, suppression of facts and contravention of provisions of Central Excise Act, 1944 and rules made thereunder causing loss of amounting to Rs.2,06,00,000/- . On the basis of the present complaint has been filed.
Learned counsel for the petitioner has submitted that petitioner no. 1 Nirmal Kumar Agarwal was the Managing Director, petitioner no. 2, Kanjaiya Kejriwal, was the Assistant General Manager (Accounts & Finance) and petitioner no. 3 S.N. Goswami was the Manager (Commercial) of M/s Adhunik Alloys & Power Limited.
Learned counsel for the petitioner has submitted that against the order dated 17.03.2015, the appeals are already pending before the Appellate Authority being the Customs Excise & Service Tax Appellate Tribunal, East Zone Bench, Kolkata and the appeal was filed on 03.06.2015. That the CENTVAT Credit which has been availed by the company in question has already been reversed and now the situation is such that there is no evasion as on today inasmuch as the company in question does not have to pay a single paisa.
Learned counsel for the petitioners relied upon the judgment reported in 2011 (14) SCC 1 and referred to para-40, 41, 42, 43, 44, 45, 46 & 47 of the judgment.
40. Section 2(i) Cr.P.C. defines a "non-cognizable offence", in respect whereof a police officer has no authority to arrest without warrant. The said definition defines the general rule since even under the Code some offences, though "non- cognizable"
have been included in Part I of the First Schedule to the Code as being non-bailable. For example, Sections 194, 195, 466, 467, 476, 477 and 505 deal with non-cognizable offences which are yet non- bailable. Of course, here we are concerned with offences under a specific Statute which falls in Part 2 of the First Schedule to the Code. However, the language of the Scheme of 1944 Act seem to -4- suggest that the main object of the enactment of the said Act was the recovery of excise duties and not really to punish for infringement of its provisions. The introduction of Section 9A into the 1944 Act by way of amendment reveals the thinking of the legislature that offences under the 1944 Act should be non- cognizable and, therefore, bailable. From Part 1 of the First Schedule to the Code, it will be clear that as a general rule all non- cognizable offences are bailable, except those indicated hereinabove. The said provisions, which are excluded from the normal rule, relate to grave offences which are likely to affect the safety and security of the nation or lead to a consequence which cannot be revoked. One example of such a case would be the evidence of a witness on whose false evidence a person may be sent to the gallows.
41. In our view, the definition of "non-cognizable offence" in Section 2(l) of the Code makes it clear that a non-cognizable offence is an offence for which a police officer has no authority to arrest without warrant. As we have also noticed hereinbefore, the expression "cognizable offence"
in Section 2(c) of the Code means an offence for which a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant. In other words, on a construction of the definitions of the different expressions used in the Code and also in connected enactments in respect of a non- cognizable offence, a police officer, and, in the instant case an excise officer, will have no authority to make an arrest without obtaining a warrant for the said purpose. The same provision is contained in Section 41 of the Code which specifies when a police officer may arrest without order from a Magistrate or without warrant.
42. Having considered the various provisions of the Central Excise Act, 1944, and the Code of Criminal Procedure, which have been made applicable to the 1944 Act, we are of the view that the offences under the 1944 Act cannot be equated -5- with offences under the Indian Penal Code which have been made non-cognizable and non-bailable. In fact, in the Code itself exceptions have been carved out in respect of serious offences directed against the security of the country, which though non- cognizable have been made non-bailable.
43. However, Sub-section (2) of Section 9A makes provision for compounding of all offences under Chapter II. Significantly, Chapter II of the 1944 Act deals with levy and collection of duty and offences under the said Act have been specified in Section 9, which provides that whoever commits any of the offences set out in Section 9, would be punishable in the manner indicated under Subsection (1) itself.
44. What is even more significant is that Section 20 of the 1944 Act, which has been extracted hereinabove, provides that the Officer in-Charge of a police station to whom any person is forwarded under Section 19, shall (emphasis supplied) either admit him to bail to appear before the Magistrate having jurisdiction, or on his failure to provide bail, forward him in custody to such Magistrate. The said provision clearly indicates that offences under the Central Excise Act, as set out in Section 9 of the Act, are bailable, since the Officer in-Charge of a police station has been mandated to grant bail to the person arrested and brought before him in terms of Section 19 of the Act.
45. The decisions which have been cited by Mr. Parasaran deal mainly with powers of arrest under the Customs Act. The only cited decision which deals with the provisions of the Central Excise Act is the decision of the Division Bench of the Punjab & Haryana High Court in the case of Sunil Gupta Vs. Union of India. In the said case also, the emphasis is on search and arrest and the learned Judges in paragraph 22 of the judgment specifically indicated that the basic issue before the Bench was whether arrest without warrant was barred under the provisions of the 1944 Act and the Courts had -6- no occasion to look into the aspect as to whether the offences under the said Act were bailable or not.
46. In the circumstances, we are inclined to agree with Mr. Rohatgi that in view of the provisions of Sections 9 and 9A read with Section 20 of the 1944 Act, offences under the Central Excise Act, 1944, besides being non-cognizable, are also bailable, though not on the logic that all non- cognizable offences are bailable, but in view of the aforesaid provisions of the 1944 Act, which indicate that offences under the said Act are bailable in nature.
47. Consequently, this batch of Writ Petitions in regard to the Central Excise Act, 1944, must succeed and are, accordingly, allowed in terms of the determination hereinabove, and we hold that the offences under the Central Excise Act, 1944, are bailable.
Learned counsel for the Central Excise Mr. Ratnesh Kumar has filed the counter affidavit and opposed the prayer for bail of the petitioners. In para-8 of the counter affidavit has stated that the company in question does not have to pay anything towards the purported demand, whereas company in question still have to pay interest and penalty and petitioners also have to pay penalties as per adjudicating authority order dated 17.03.2015.
in view of the judgment passed in the case of Om Prakash(Supra), this anticipatory bail application is not maintainable as the offences are bailable in nature.
Accordingly, this anticipatory bail application is hereby disposed of with a direction that the petitioners will appear before the court below within six weeks and shall file regular bail application and the court below shall consider the bail application in the light of the judgment passed in the case of Om Prakash(supra) wherein the Hon'ble Supreme Court has held the offences are bailable and pass appropriate order.
(Anant Bijay Singh, J.) fahim/