FM removes draconian powers on excise, customs duty cases

Buckling under pressure from various quarters, the government on Monday withdrew the harsh provisions relating to excise and customs duty evasion cases. In Finance Bill 2012-13, it had earlier proposed to make certain excise and customs duty evasion cases non-bailable until the court had heard the public prosecutor.

Finance Minister Pranab Mukherjee on Monday withdrew these provisions, which many members of Parliament had termed draconian and similar to those under the old Prevention of Terrorist Activities Act.

"Certain amendments were proposed in the Customs and Central Excise Law in respect of classification of offences as cognisable and non-bailable. In response to concerns expressed by members that the proposal regarding grant of bail only after hearing the public prosecutor is too harsh, I propose to omit this provision entirely," Mukherjee said in his opening remarks during a debate on the Finance Bill in the Lok Sabha.

Several members of Parliament had met Mukherjee to press for rolling back the proposals that sought to make all excise and customs offences punishable with imprisonment of three years or more cognisable and non-bailable, unless the public prosecutor presented his case.

Mukherjee said only serious offences involving the import of prohibited goods would be made cognisable. The list of prohibited and restricted items include narcotic drugs, psychotropic substances, counterfeit and pirated goods, antiquities,

firearms and ammunition, live birds and animals, etc. Customs duty evasion exceeding Rs 50 lakh would also be cognisable. This figure was proposed at Rs 30 lakh. However, all these offences would now be bailable.

Earlier, finance ministry officials had allayed concern on the fact that bail would be denied in petty cases of tax evasion. The Bill had earlier proposed that the floor for excise duty evasion be increased from Rs 1 lakh to Rs 30 lakh. This means the offence would be cognisable if the amount evaded exceeds Rs 3 crore (duty levied at 12 per cent).

The finance ministry had to propose an amendment to Section 13 of the Excise Act and Section 104 of the Customs Act to undo a Supreme Court ruling in September that said all offences in excise and customs should be non-cognisable and bailable. The provisions were similar to the powers under the Prevention of Money Laundering Act.

Section 13 of the Excise Duty Act and Section 104 of the Customs Duty Act grant powers of arrest to excise and customs officials.

Leader of the Opposition in the Rajya Sabha, Arun Jaitley, had attacked the government for provisions which "should not even apply to terrorists".

Earlier, in post-Budget interactions with the finance minister, industry representatives had raised the issue of draconian powers to tax officials. To these, Mukherjee had said tax officials would not be allowed to act as policemen. "We are concerned about the realisation of taxes and not to sit on judgment, whether it is a crime or not," he had said.