OFFENCES AND PENALTIES

OFFENCES Section 3 (38) of the general clause act defines an ‘offences’ as “ any act or omission made punishable by any law for the time being inforce . 0ffences (section 9 to 9E ) (a) contravenes any of section 8 or of a rule made under section 37 (2). (b) evades the payment of any duty payable under this act ; (c) removes any excisable goods in contravention of any of the provision of this act or any rule made thereunder or in any way concerns himself with such removal. (d) acquires possession of, or in any way concerns himself in transporting , depositing , keeping ,concealing or in any other manner deals with any excisable goods which he knows or has reason to believe are liable to confiscation under this act or any rule made thereunder.

(e) contravention of act or rules in relation to CENVAT credit (e) contravention of act or rules in relation to CENVAT credit. (f) fails to supply any information which he is required by rules made under this act to supply or supplies false information. (g) attempts to commit or abets the the commission of any of the offences mentioned in clauses (a) and (b) of this section: certain offences to be non cognizable (section 9A ). Offence under section 9 shall be deemed to be non cognizable. ‘ cognizable offence ‘ means an offence for which a police officer may arrest a person without warrant.

Compounding of offences (section 9A (2)) Any offence under the act can be compounded by CCE either before or after institution of prosecution . An amendments in 2009 has provided for manner of compounding of offences and has provided that certain offences and circumstances shall not be compoundable.

Offences by companies (section 9AA) Where an offence under this act has been committed by a company , then every person who, at the time the offence was committed was in charge of , and was responsible to the company for the conduct of the business of the company , as well as the company , shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly : But any such person is not liable to any punishment provided in this Act , if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

Criminal prosecution for offences Excise law provides for both imprisonment and fines for violation of excise laws. These can be imposed by court of laws only and these are independent of penalty and confiscation that can be imposed by Excise Authority through departmental adjudication. Punishment imposable is imprisonment up to seven years and fine (without limit) if : (a) the duty leviable on the excisable goods exceed one lakh of rupees. Compounded by chief commissioner of central excise on payment , by the accused person to the CG of prescribed amount , either before or after the institution of prosecution.

(b) a person already convicted for offence under central excise act is convicted again. (c) the imprisonment should be minimum for six months unless there are special and adequate reason for granting lesser punishment. if the duty leviable on goods is less than one lakh imprisonment upto 3 years or fine (withot limit) or both can be impossed. In addition to aforesaid, court has powers to order following punishments :- (a) forfeiture to govt of any goods in respect of which offence has been committed. (b) publication of names , place of business or residence , nature of contravention etc under section 9 B.

Powers of court to publish name , place of business , etc , of persons convicted under the act Where any person is convicted under this act for contravention of any of the provisions thereof , it shall be competent for the court convicting the person to cause the name and place of business or residence of such person , nature of the contravention , the fact that the person has been so convicted and such other particular as the court may consider to be appropriate in the circumstances of the case , to be published at the expense of such person , in such newspapers or in such manner as the court may direct . No publication shall be made until the period for preferring an appeal against the orders of the court has expired without any appeal having been preferred , or such an appeal , having been preferred , has been disposed off. The expenses of such publication shall be recoverable from the convicted person as if it were a fine imposed by the court .

Powers of court to publish name , place of business , etc , of persons convicted under the act Where any person is convicted under this act for contravention of any of the provisions thereof , it shall be competent for the court convicting the person to cause the name and place of business or residence of such person , nature of the contravention , the fact that the person has been so convicted and such other particular as the court may consider to be appropriate in the circumstances of the case , to be published at the expense of such person , in such newspapers or in such manner as the court may direct . No publication shall be made until the period for preferring an appeal against the orders of the court has expired without any appeal having been preferred , or such an appeal , having been preferred , has been disposed off. The expenses of such publication shall be recoverable from the convicted person as if it were a fine imposed by the court .

Presumption of culpable mental state (Section 9 c ) In any prosecution for an offence under this act which requires a culpable mental state on the part of the accused , the court shall presume the existence of such mental state but it shall be defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. ‘culpable mental state’ includes intention , motives , knowledge of a fact , and belief in , or reason to believe, a fact. For the purposes of this section , a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.

Relevance of statements under certain circumstances(section 9d) A statement made and signed by a person before any central excise officer of a gazetted rank during the course of any inquiry or proceeding under this act shall be relevant, for the purpose of proving, in any prosecution for an offence under this act, the truth of the facts which it contains- A) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of a case, the court considers unreasonable; or B) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that , having regard to the circumstances of the case , the statement should be admitted in evidence in the interests of justice.

Penalties Excise authorities are empowered to impose which are provided under central excise rules, 2002.These are discussed in belief below- Confiscation and penalty(RULE 25). Whenever commits any of offences under sec.9 shall be punishable- 1) in the case of any offence relating to any excisable goods, the duty leviable thereon under this act exceed one lakh of rupees, with imprisonment for a term which may extend to seven years with fine. But in absence of special and adequate reasons to the contrary to be recorded in the judgement of the court such imprisonment shall not be for a term of less then six months; 2) in any other case, with imprisonment for a term which may extend to three years or with fine or with both. If any person convicted of an offence under this section is again convicted of an offences under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to seven years and with fine. Subject to the provisions of section 11ac of the act, if any producer, manufacturer, registered person of a warehouse of a registered dealer- A) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or B)does not account for any excisable goods produced of manufactured or stored by him; or C) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the act ; or D) contravenes any of the provisions of these rules or the notifications issued under these rules with the intent to evade payment of duty. 2) an order shall be issued by the central excise officer, following the principles of natural justice.

Penalty for certain offences (RULE 26) Any person who acquires possession of, or is in any way, concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he known or has reason to believe are liable to confiscation under the act or these rules, shall be liable to a penalty not exceeding the duty on such goods or rupees ten thousand, whichever is greater. General penalty(RULE 27)-A breach of these rules shall, where no other penalty is provided herein or in the act, be punished with a penalty which may extend to five thousand rupees and with confiscation of the goods in respect of which the offence is committed. Confiscated property to vest in central government(RULE 28)- When any goods are confiscated under these rules, such thing shall thereupon vest in central government. The central excise officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of police, on the requisition of such central excise officer, shall assist him in taking and holding such possession.