Published On: Sun, Nov 1st, 2015

No indiscriminate prosecution: CBEC tells officers

New Delhi: Prosecution should not be launched “indiscriminately” against all directors of a public limited company but be restricted to only those who have taken active part in smuggling and customs duty evasion, the CBEC has told its officers.

CBEC Chairman Najib Shah

CBEC Chairman Najib Shah

The move, officers say, is aimed at removing fear from the minds of businessmen and promote ease of doing business.

In its latest directive, the Central Board of Excise and Customs (CBEC) said prosecution should not be launched as a matter of routine in cases of technical nature where the additional claim for duty is based solely on a difference of interpretation of the law.

“Before launching any prosecution, it is essential that the department should have sufficient evidence to prove that the person, individual or company, against whom prosecution is being considered, had guilty knowledge of the offence or had fraudulent intention of committing the offence, or in any manner possessed mens-rea (guilty mind) which would indicate his guilt,” the board said.

It follows, therefore, that in the case of Public Limited Companies, prosecution should not be launched indiscriminately against all the Directors of the Company, but should be restricted to only such persons who have taken active part in committing, or have connived at, the offence relating to either of smuggling or of customs duty evasion or of mis-declaration of value, quantity etc, it said.

“There is a fear of discrimination in the minds of businessmen. The directive will make it more clear that the government does not want to harass anyone and, at the same time, guilty will not be spared,” a senior Finance Ministry official said.

Senior officials in the Directorate of Revenue Intelligence, lead agency to check smuggling and customs duty evasion, and in Commissionerates have been directed to go through the relevant case files thoroughly and ascertain for themselves the definite involvement of partners, directors, executives or officials, against whom reasonable evidence about involvement in an offence exists and should be proceeded against, while launching the prosecution, the order said.

Normally, prosecution may be launched immediately on completion of adjudication proceedings.

However, prosecution in respect of cases involving offences relating to Fake Indian Currency Notes (FICN), arms, ammunitions and explosives, antiques, art treasures, wildlife items and endangered species of flora and fauna may preferably be launched immediately after issuance of show cause notice, it said.


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