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Prosecution provisions to be made more stringent

15th March, 2013

Arrest and prosecution provisions in Customs, Central Excise and Service tax laws will become more stringent as per Budget 2013 proposals. While certain offences will be non-bailable and cognizable, there is also an amendment to impose penalty on directors and other officers of a company. 

Non-bailable offences -Customs

Section 104 of the Customs Act, empowering Customs officers to arrest, is proposed to be amended as per Finance Bill, 2013. The offences which will be made non-bailable are those relating to evasion of duty exceeding Rs. 50 lakh, import and export of specified prohibited goods and import or export of misdeclared goods with market value exceeding Rs. 1 crore. Cases where drawback or exemption with amount exceeding Rs. 50 lakh has been availed fraudulently will also be non-bailable. Earlier all these offences were bailable. 

Cenvat Credit violations

On the Central Excise side, offences of evasion of payment of duty or contravention of provisions relating to Cenvat credit utilization, where the duty leviable exceeds Rs. 50 lakh, are proposed to be made cognizable and non-bailable. These changes are proposed to be incorporated in Section 9A of the Central Excise Act, 1944.

New Sections 90 and 91 in service tax
In case of Service Tax, offence of non-payment of service tax even after collecting the same, is proposed to be made more stringent by increasing the maximum term of imprisonment to seven years if the amount involved in more than Rs. 50 lakh. This offence is further being made as cognizable while making all other offences as non-cognizable and bailable in terms of the new Section 90 proposed to be inserted from date of enactment of the Finance Bill 2013. New Section 91 specifying powers of officers to arrest, will also get inserted once the bill is enacted.
Further, in Service tax, new provisions are being proposed to impose penalty on director, manager, secretary or other officers of company who were responsible for the specified contraventions by the company. This provision proposes penalty up to Rs. 1 lakh on such persons.  
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