Page 24 - GSTL_13th August 2020_Vol 39_Part 2

J32 GST LAW TIMES [ Vol. 39
tion 9 of Central Excise Act, 1944 laid down the offences and penalties. The max-
imum punishment for repeat offence was seven years imprisonment and fine.
Similarly, Section 135 of Customs Act, 1962 laid down the offences and penalties.
The maximum punishment being seven years imprisonment and fine. As per
Section 9A of Central Excise Act, 1944 and Section 104(4) of Customs Act, 1962,
notwithstanding anything contained in the Code of Criminal Procedure the of-
fence under those respective Acts were non-cognizable.
In the case of Om Prakash v. Union of India the common question to be de-
cided was since all offences under Central Excise Act, 1944 and the Customs Act,
1962 are non-cognizable, are such offences bailable? It was argued on behalf of
State that even though the maximum punishment under both the Acts is seven
years yet Section 9A of Central Excise Act, 1944 and Section 104(4) of Customs
Act, 1962 created a fiction whereby all offences under the Act were treated as
non-cognizable. This fiction was created to debar Police Officers from arresting
the persons committing offences under these Acts without warrant. However,
under both the Acts it did not anywhere say that the officers functioning under
the Act were debarred from arresting without warrant even though the offences
are defined as non-cognizable. Finally, the Apex Court held that in the case of
Central Excise Act the provisions of Sections 9 and 9A read with Section 20 of the
Central Excise Act, 1944 besides being non-cognizable are also bailable. In the
same case and on similar logic it was held that the offences under the Customs
Act, 1962 were also non-cognizable and bailable.
Position After Apex Court’s judgment in Om Prakash v. Union of India - 2011 (272)
E.L.T. 321 (S.C.) :
Taking note of the above judgment, Finance Bill, 2013 proposed changes
in Central Excise Act, 1944 and Customs Act, 1962. In Central Excise Act, 1944 a
new sub-section (1A) was inserted in Section 9A to specify that the offences relat-
ing to excisable goods, where the duty involvement exceeds ` 50 lakhs and
which are punishable under clause (b) or clause (bbb) of sub-section (1) of Sec-
tion 9 are cognizable. All other offences under Section 9 are non-cognizable and
bailable. Similarly, in Customs Act, 1962 Section 135 was amended declaring fol-
lowing offences to be cognizable and non-bailable.
(I) Evasion/attempted evasion exceeding ` 50 lakhs; or
(II) Prohibited goods notified under Sections 11 and 135(1)(i)(C) irre-
spective of its value; or
(III) Goods of value exceeding ` 1 crore not declared in accordance with
the provisions.
So barring above offences, other offences under the Customs Act, 1962 will be non-
cognizable and bailable.
Provisions of prosecution in Service Tax, i.e., under Finance Act, 1994 :
Though Service Tax was introduced in form of Finance Act, 1994 in the
year 1994, the prosecution provisions were introduced for the first time as late as
10th May, 2013. Sections 90 and 91 were introduced in Finance Act, 1994 and Sec-
tion 89 of the Act was amended. Further amendments were carried out in these
sections with effect from 14th May, 2016. As a consequence of these amend-
ments, the power of arrest in Service Tax is available only if a person collects any

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