No arrest for custom & excise tax evasion without warrants: SC

No arrest for custom & excise tax evasion without warrants: SC

A three judge bench headed by Justice Altamas Kabir said the main object of Custom and Excise Acts was the recovery of excise duties and not really to punish for infringement of its provisions.

"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 with offences under the Indian Penal Code which have been made non-cognizable and non-bailable," the bench said.

"Language of the Scheme of 1944 Act seem to 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 bench also comprising justices Cyriac Joseph and S S Nijjar said while explaining the provision of the Excise Act.

The bench said that all offences under the Central Excise Act, 1944 and the Customs Act, 1962, are non-cognizable, and they are bailable.

According to Criminal Procedure Code in respect of non-cognizable offence a police officer has no authority to arrest without warrant.

"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 bench said.

Consequently, as in the case of offences under the Excise Act, it is held that offences under Customs Act are bailable and if the person arrested offers bail, he shall be released on bail if not wanted in connection with any other offence, the bench said.

It turned down the plea of Centre which contended that the power to arrest must necessarily be vested in Customs and Excise Officer for the efficient discharge of his functions and duties in order to prevent and tackle the menace of black money and money laundering.

"Section 9A of the 1944 Act and Section 104(4) of the Customs Act, 1962, provide that notwithstanding anything in the Code of Criminal Procedure, offences under both the Acts would be non-cognizable," the bench said.

"The provisions of the two above-mentioned enactments (custom and excise) on the issue whether offences under both the said Acts are bailable, are not only similar, but the provisions of the two enactments are also in pari materia(similar) in respect thereof," the bench said.

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