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22 Sep 2013

Guidelines for arrest and bail in relation to offences punishable under the Finance Act, 1994

Section 103 (K) of the Finance Act, 2013 has introduced Sections 90 & 91 in the Finance Act, 1994, with effect from  10th May, 2013

According to Circular No. 171/6/2013-Service Tax, dated 17th September, 2013, offences under section 89(1) (ii), in terms of section 90, shall be cognizable and all others shall be non-cognizable and bailable.
Further, in terms of section 91(1) read with section 89(1) (i) & (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 Rs.50 lakhs.
The powers conferring to the Assistant Commissioner/ Deputy Commissioner for the purpose of releasing such person on bail shall coincide with the powers that have been granted to an officer-in-charge, subject to the provisions under Section 436 of the Code of Criminal Procedure, 1973. Further, an officer of Central Excise not below the rank of Superintendent of Central Excise can carry out an arrest after being duly authorized.
The procedure to arrest involves issuing an arrest memo, but there is no format has been prescribed for the same. However, it should be in compliance with the directions as given in the case of D.K. Basu v/s State of West Bengal reported in 1997(1) SCC 416 (Essentials of Arrest memo attached herewith).
Further, post arrest, the Assistant Commissioner or Deputy Commissioner is bound to release a person on bail against a bail bond. The conditions of bail bond should be informed in writing to the arrested person and telephoned to the nominated person of the person so arrested. If all the pre-requisites for grant of bail are satisfied by the arrested person, then he shall be released. On the contrary, if the conditions are not fulfilled, then the arrested person shall be produced before the appropriate magistrate within 24 hours. Further, the arrested person shall be handed over to the nearest police station for his safe custody.
Lastly, every Commissionerate must maintain a bail register containing details of the arrested person and a report on every person arrested should be sent to the Jurisdictional Chief Commissioner with a copy to DGCEI, the same day or next day.