Circular 171/6/2013-Service Tax, F.No. 137/47/2013-Service
Tax, dated 17th
September, 2013
Section 103 (K) of the Finance Act,
2013 has introduced Sections 90 & 91 in the Finance Act, 1994, with effect
from 10th May, 2013. In terms of section 90 of the Finance Act ,
1994, as amended, offences under section 89(1) (ii) shall be cognizable and all
other offences shall be non-cognizable and bailable. In terms of section 91(1)
read with section 89(1) (i) and (ii) of the Finance Act, 1994, as amended, the
power to arrest has been introduced in cases involving evasion of service tax
covered under section 89(1) (i) and (ii) of the Finance Act, 1994, as amended
and the amount of service tax evaded exceeds rupees fifty lakh. In this
context, the following points may be noted for strict compliance:-
1.2 The
following cases are covered under section 89(1) (i):
1.2.1 where a person knowingly evades the payment of service tax,
or
1.2.2 avails and utilizes
credit of taxes or duty without actual receipt of taxable service or excisable
goods either fully or partially in violation of the rules, or
1.2.3 maintains false books of accounts or fails to supply any
information which he is required to supply or supplies false information, and
the amount of service tax involved is more than fifty lakh rupees.
In such cases, the Assistant
Commissioner or the Deputy Commissioner
shall, for the purpose of releasing an arrested person on bail or
otherwise, have the same powers and be
subject to the same provisions as an officer in-charge of a police station has,
and is subject to, under Section 436 of
the Code of Criminal Procedure, 1973( 2 of 1974). This is in terms of section
91(3) of the Finance Act, 1994, as amended.
1.3 The
following cases are covered under section 89(1) (ii):
1.3.1 where a
person has collected any amount exceeding fifty lakh rupees as service tax but
fails to pay the amount as collected to the credit of the Central Government
beyond a period of six months from the date on which such payment becomes due.
In such cases, after following the due procedure of arrest,
the arrested person must be produced before the magistrate without unnecessary
delay, and definitely within 24 hours. This is in terms of section 91(2) of the
Finance Act, 1994, as amended. The magistrate will decide on whether or not to
grant bail.
2.0. Conditions Precedent
2.1 Since
arrest impinges on the personal liberty of an individual, this power must be
exercised carefully. The Finance Act 1994, as amended, has
specified categories of offences in respect of which only powers of arrest may
be exercised and these offences are covered under clause (i) or clause (ii) of
sub-section (1) of section 89 of the Finance Act, 1994. Further, the Finance Act 1994 has also
prescribed value limits of evasion of service tax exceeding Rs 50 lakh, for
exercising the powers of arrest.
2.2 The legal
stipulations in the Finance Act 1994, as amended, contained in section 91 read
with section 89 must be strictly adhered to. An
officer of Central Excise not below the rank of Superintendent of Central
Excise can carry out an arrest on being authorized by the Commissioner of
Central Excise. To authorize the arrest the Commissioner should have reason to
believe that the person proposed to be arrested has committed an offence
specified in clause (i) or clause (ii) of sub-section (1) of section 89.
The reason to believe must be based on credible material which will stand judicial
scrutiny.
2.3 Apart
from fulfilling the legal requirements, the need to ensure proper
investigation, prevention of the possibility of tampering with evidence or
intimidating or influencing witnesses and large amounts of service tax evaded
are relevant factors before deciding to arrest a person.
3.0. Procedure for Arrest
3.1 The
provisions of the Code of Criminal Procedure 1973 (2 of 1974) relating to
arrest and the procedure thereof must be adhered to. It is therefore advised that the Commissioner
should ensure that all officers are fully familiar with the provisions of the
Code of Criminal Procedure 1973 (2 of 1974).
3.2 There is
no prescribed format for arrest memo but an arrest memo must be in compliance
with the directions in D.K Basu vs State of West Bengal reported in 1997(1) SCC
416 ( see paragraph 35). The arrest memo should include:
3.2.1 brief facts of the case;
3.2.2 details of the person arrested;
3.2.3 gist of evidence against the person;
3.2.4 relevant section (s) of the Finance Act, 1994 or other laws
attracted to the case and to the arrested person;
3.2.5 the grounds of arrest must be explained to the arrested
person and this fact noted in the arrest memo;
3.2.6 a nominated person (as per the details provided by arrested
person) of the arrested person should be informed immediately and this fact
also may be mentioned in the arrest
memo;
3.2.7 the date and time of arrest may be mentioned in the arrest
memo and the arrest memo should be given to the person arrested under proper
acknowledgment;
3.2.8 a separate arrest memo has to be made and provided to each
individual/arrested person. This should particularly be kept in mind in the
event that there are several arrests in a single case.
3.3 Further
there are certain modalities that should be complied with at the time of arrest
and pursuant to an arrest, which include the following:
3.3.1 A female should be arrested by or in the presence of a woman
officer;
3.3.2 Medical examination of an arrested person should be conducted
by a medical officer in the service of Central or State Governments and in case
the medical officer is not available, by a registered medical practitioner,
soon after the arrest is made. If an arrested person is a female then such an
examination shall be made only by, or
under supervision of a female medical officer, and in case the female medical
officer is not available, by a female
registered medical practitioner.
3.3.3 It shall be the duty of the person having the custody of an
arrested person to take reasonable care of the health and safety of the
arrested person.
4.0. Post Arrest Formalities
4.1 The
procedure is separately outlined for the different categories as listed in
section 89(1) (i) and (ii) of the Finance Act, 1994, as amended:
4.1.1. In cases covered under section 89(1) (i), the Assistant
Commissioner or Deputy Commissioner is bound to release a person on bail
against a bail bond. The bail conditions should be informed in writing to the arrested person and also
informed on telephone to the nominated person of the person (s) arrested .The
arrested person should be also allowed to talk to a nominated person. The
conditions will relate to, inter alia, execution of a personal bail bond and
one surety of like amount given by a local person of repute, appearance before
the investigating officer when required and not leaving the country without
informing the officer. The amount to be indicated in the personal bail bond and
security will depend, inter alia, on the amount of tax involved.
4.1.2. If the conditions of the bail are fulfilled by the
arrested person, he shall be released by the officer concerned on bail
forthwith. However, only in cases where
the conditions for granting bail are not fulfilled, the arrested person shall
be produced before the appropriate Magistrate without unnecessary delay and
within twenty-four (24) hours of arrest.
The arrested person may be handed over to the nearest police station for
his safe custody, within 24 hours, during the night under a challan, before he
is produced before the Court.
4.2 In cases
covered under section 89(1) (ii) and only in the event of circumstances
preventing the production of the arrested person before a Magistrate without
unnecessary delay, the arrested person may be handed over to nearest Police
Station for his safe custody, within 24 hours, under a proper challan, and
produced before the Magistrate on the next day, and the nominated person of the
arrested person may be also informed accordingly.
4.3 Formats of
the relevant documentation i.e. the Bail Offer Letter, the Bail Bond and the
Challan for handing over to the police, in the Code of Criminal Procedure,
1973. (2 of 1974) may be followed.
4.4 Every
Commissionerate should maintain a Bail Register which will have the details of
the case, arrested person, bail amount, surety amount. The
money/instruments/documents received as surety should be kept in safe custody.
The money should be deposited in the treasury. The other instruments/documents
should be kept in the custody of a single nominated officer. It should be
ensured that the instruments/documents received as surety are kept valid till
the bail is discharged.
5.0. Reporting System
5.1 A report
on every person arrested should be sent to the jurisdictional Chief Commissioner
with a copy to DGCEI (Headquarters) the same day or on the next day.
5.2 Chief
Commissioners shall send a report on every arrest to the Zonal Member within 24
hours of the arrest giving such details as prescribed in the monthly report. To
maintain an all India record of arrests made in service tax, a monthly report
of all persons arrested in the Zone shall be sent by the Chief Commissioner to
DGCEI (Headquarters), New Delhi, by the 5th of the succeeding month,
in the following format:
Monthly
Report on Persons Arrested in a Zone
S.
No
|
Name, designation
and age of
arrested person
|
Date
of
Arrest
|
Commissionerate
|
Name and
Registration
Number of
Company
|
Amount
of
duty
evaded
|
Role in
evasion
and
nature of
evidence
collected
|
Total
|
0 comments:
Post a Comment