POWER TO ARREST IN SERVICE TAX

[Dr. Sanjiv Agarwal]

Finance Act, 2013 has inserted new section 91 in the Finance Act, 1994 w.e.f. 10.05.2013 as follows :

"91. (1) If the Commissioner of Central Excise has reason to believe that any person has committed an offence specified in clause (i) or clause (ii) of sub-section (1) of section 89, he may, by general or special order, authorise any officer of Central Excise, not below the rank of Superintendent of Central Excise, to arrest such person.

(2) Where a person is arrested for any cognizable offence, every officer authorised to arrest a person shall, inform such person of the grounds of arrest and produce him before a magistrate within twenty-four hours.

(3) In the case of a non-cognizable and bailable offence, the Assistant Commissioner, or the Deputy Commissioner, as the case may be, 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.

(4) All arrests under this section shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973 relating to arrests.”

According to Notes on Clauses explaining the provisions of Finance Bill, 2013, section 91 seeks to provide for power to arrest. It seeks to empower the Commissioner of Central Excise, to authorize any officer of Central Excise not below the rank of Superintendent of Central Excise, to arrest a person for the offences specified in clause (i) or clause (ii) of sub-section 89.

It further seeks to empower the Assistant Commissioner or the Deputy Commissioner to release the person so arrested on bail in case of non-cognizable and bailable offences, and for this purpose, he shall have the same power as that of an officer-in-charge of a police station and shall be subject to provision under section 436 of the Code of Criminal Procedure, 1973.

It also seeks to provide that the arrests so made shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973, relating to arrests. 

Arrest provisions at a glance

—  Similar provisions existed earlier but withdrawn in 1998

—  Provides power to arrest (where evasion exceeds Rs. 50 lakhs)

—  Covers all classes of assessees

—  Empowers Commissioner of Central Excise

—  He may authorize any officer not below the rank of Superintendent to arrest

—  Who can be arrested – any person as per Section 89

—  Trigger for arrest – offences – as per Section 89(1) (Reasons to believe that offence has been committed to exist )

—  Arrests to be made in terms of Code of Criminal Procedure, 1973 (CCP)

—  For Cognizable offences

• Grounds of arrest to be informed to such person
• Produced before Magistrate within 24 hours

—  Assistant / Deputy Commissioner empowered to release an arrested person on bail in case of non -cognizable / bailable offences

—  To have same powers as Officer -in -charge of Police Station in terms of Section 436 of CCP

Thus, section 91 provide the power to arrest. Commissioner of Central Excise is empowered to authorize any officer of Central Excise not below the rank of Superintendent of Central Excise, to arrest a person for specified offences, particularly non-payment of collected service tax.