PROSECUTION AND CRIMINAL JUSTICE RESPONSE IN CUSTOMS AND CENTRAL EXCISE – A STUDY
By Dr. G. Gokul Kishore & Mr. T.M. Kothandaraman
Crime-prevention through punitive action is sine qua non for the existence and sustenance of society and the human civilisation. In any society, more so in the modern era, the consequences of criminal acts determine the magnitude of correctional actions. With Politics leaving the centre-stage in Inter-national relations and economics occupying its place, economic crimes assume more significance as the latter increases in geometric proportion compared to the development of a monetised and complicated economic structures both in the canvass of nation-states and in the international horizon. The damage that is inflicted by economic crimes to a national economy and hence the society mandates the need to prevent them. The trial and punishment of such offences by the judicial system secures two ends i.e. the offender is reformed (reformative end) and the potential offenders are deterred from indulging in such activities (deterrence effect). Thus prosecution of an economic offender serves at both the individual and social levels.
Indirect taxes contribute the maximum ( 50 % of Gross Tax Receipts of Govt. of India during 1997-2001)(CMIE 2002) among all other tax revenues to the Central Exchequer and every leakage in such revenue has far-reaching implications. K.D.Gaur ( 1987) identifies, inter alia, (i) inadequate prosecution machinery (ii) lack of adequate legal advice on potential prosecution cases (iii) lenient judicial attitude towards tax evasion as causes of tax evasion. The Indirect tax laws, viz., the Customs Act, 1962 and the Central Excise Act, 1944 provide for prosecution and punishment by the Judiciary in addition to the financial penalties imposed by the department. With the advent of New Economic Policy in 1991, the overall climate in so far economic offences are concerned, has become more of ‘fine-only’ offences with the criminal intent/effect receding to the back-stage. The role of the Criminal Justice System has been under greater strain in such a scenario. This Paper, therefore, attempts to study the present-day statutory provisions pertaining to prosecution in respect of evasion of Customs and Union Excise duties as provided in the relevant statutes, the performance of the Indirect Tax Administration in bringing tax offenders to book and the Criminal Justice Response in this sphere. An evaluation of the prosecution performance is also made along with a discussion of relevant recommendations of various committees constituted by the Government of India. The extent of implementation of various reforms and consequential results in tackling such crimes also form part of the discussion.