AdvocateKhoj
Login : Advocate | Client
Home Post Your Case My Account Law College Law Library
    

Report No. 47

Chapter 15

Recommendations as to Individual Acts

15.1. Central Excise and Salt Act-Addition of offence as to unauthorized removal.-

We may now take up the major points relevant to particular Acts1.

It has been stated that2 under the present Central Excise Law, while unauthorised removal of excisable goods has to be departmentally adjudicated, prosecution under section 9 can be resorted to only for evasion of duty. The suggestion is to amend section 9 of the Central Excise and Salt Act, to provide for prosecution in cases of unauthorised removals also.

1. The Acts are discussed in chronological order.

2. Suggestion of a Ministry of the Government of India.

We accept the principle of the suggestion and recommend amendment on the subject.

15.2. Central Excise Act-punishment.-

It has been suggested1 that the present punishment of imprisonment for a term upto six months or fine or both under section 9 of the Central Excise and Salt Act should be enhanced to a maximum term of imprisonment of 3 years and a minimum term of imprisonment of 6 months, and also fine. In cases in which the loss of duty is more than one lakh, a higher minimum of one year with a maximum of 7 years' imprisonment is also proposed to be provided for. In the case of second or subsequent, convictions, higher minimum of two years is proposed. The discretion of the court not to award at least the minimum period of imprisonment will be limited to only such cases in which special circumstances exist and for adequate reasons to be recorded in writing.

We are separately recommending2 an increase in the maximum punishment, which should suffice.

1. Suggestion of a Ministry of the Government of India.

2. See para. 15.5, infra.

15.3. Central Excise Act-provision to save power of confiscation.-

It has been suggested1 that a new section should be inserted to the effect that confiscation or penalty imposed in departmental proceedings under the Excise Act shall not prevent the infliction of any other punishment to which the person affected thereby is liable under the provisions of the Act, or under any other law.

We have no objection to such a clarification2.

[In this connection, it may be noted that under the existing scheme, for a contravention of the provisions of the Customs Act, punishments can be awarded in departmental adjudications which entail confiscation of the offending goods etc. and imposition of penalty on the persons concerned in the offence. In addition, the accused can also be prosecuted in court. The Customs Act specifically3 lays down that the award of any confiscation or penalty shall not prevent the infliction of any punishment by the court.]

1. Suggestion of a Ministry of the Government of India.

2. Compare section 127, Customs Act.

3. Section 127, Customs Act, 1962.

15.4. Central Excise Act-Public Censure.-

It has been suggested1. that a provision should be introduced under section 37 of the Central Excises and Salt Act, to provide specifically for making rules for giving publicity to the names and other particulars of persons who are guilty of contravention of the provisions of the Act, rules and other orders. We accept the principle of the suggestion.

1. Suggestion of a Ministry of the Government of India.

15.5. Amendment of section 9, Excise Act as to punishment.-

In accordance with our general recommendation for increase in the maximum punishment1, and provision for minimum imprisonment and fine, it will be necessary to revise section 9 of the Central Excise Act2.

1. Chapter 7.20, supra.

2. Actual amendment will be indicated separately.

15.6. Section relating to burden of proof recommended.-

In accordance with our general recommendation of shifting the burden of proof1, it will be necessary to insert a section in the Central Excise Act relating to burden of proof of mens rea.

1. Para. 7.12, supra.

15.7. Consequential amendment of section 9(c), Central Excise Act.-

In consequence of the above amendment1, section 9(c) of the Central Excise Act will require amendment, to remove words which will become redundant. Our recommendation therefore is-In section 9(c) of the Central Excise and Salt Act, 1944, the words "the burden of proving which shall be upon him", shall be omitted.

1. Para. 15.6, supra.

15.8. Recommendation as to the Foreign Exchange Act.-

In the Foreign Exchange Regulation Act, the following provisions are absent from the penal and connected sections:

(i) Modification of mens rea.

(ii) Mandatory imprisonment.

(iii) Minimum period of imprisonment.

(iv) Stoppage of business.

(v) Summary trial.

Of these No. (i) has been covered by judicial interpretation1. Nos. (ii) and (iii) will be dealt with later2. It may also be stated that many cases under the Act are dealt with by penalties imposed by the Director of Enforcement or officers subordinate to him3.

As regards No. (iv)-Stoppage of business,-the matter will be discussed separately4.

1. See State of Maharashtra v. M.N. George, AIR 1965 SC 722.

2. See paras. 15.10 and 15.33, infra.

3. Section 23(1), Foreign Exchange Regulation Act, 1947.

4. See para. 15.21, infra.

No. (v)-summary trial in the sense known to the Criminal Procedure Code-may be inappropriate, as complicated questions of law or fact are often involved in prosecutions under the Foreign Exchange Act. Instead, the procedure which we are recommending would serve the purpose of quick disposal1.

1. We are separately recommending special courts, which will achieve the object of speed without being unfair to the accused. (Paras. 9.9. and 9.10, supra).

15.9. Foreign Exchange Regulation Act, 1947-Increase in departmental penalty considered.-

A few other points may also be dealt with. Section 23, Foreign Exchange Act provides that if the case is adjudicated by the Director of Enforcement, the maximum penalty of 3 times the value of the foreign exchange involved or Rs. 5,000, whichever is more, may be imposed, and that if the offender is prosecuted before a Court, the punishment that can be awarded is imprisonment upto a maximum of two years, or fine, or both.

It has been suggested1 that the punishment in the departmental adjudication should be enhanced to a penalty upto 5 times the foreign exchange involved. Further, the section, it has been suggested, should be reworded suitably so as to provide for the imposition of a penalty of more than Rs. 5.000. These provisions, it is further stated, should apply equally even when the offence is detected in Indian currency.

We accept the suggestion in principle.

1. Suggestion of a Ministry of the Government of India.

15.10. Foreign Exchange Act-Suggestion for minimum punishment considered.-

It has been stated1 that in the case of offences under the Foreign Exchange Act, tried by a Court, for serious offences like over-invoicing and under invoicing of goods, making or receiving compensatory payments, non-repatriation of foreign exchange earned abroad, and maintaining of an account abroad without the Reserve Bank's approval, there should be a minimum imprisonment of 6 months where the amount involved is Rs. 1 lakh or more, with the proviso that a lesser punishment than the minimum so prescribed could be awarded by the Court where the Court is convinced that such action is necessary and for reasons to be recorded in writing.

We are separately proposing an increase in punishment under the Act2, which will suffice.

1. Suggestion of a Ministry of the Government of India.

2. Para. 15.33, infra.



Trial and Punishment of Social and Economic Offences Back




Client Area | Advocate Area | Blogs | About Us | User Agreement | Privacy Policy | Advertise | Media Coverage | Contact Us | Site Map
powered and driven by neosys