2026-VIL-499-MP-CE
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CENTRAL EXCISE High Court Cases

Central Excise - Bail application in criminal case related to evasion of central excise duty and cess - The applicant was arrested in connection with a case registered under Sections 9(1)(B) of the Central Excise Act, 1944 and Rule 22 of the Chewing Tobacco Zarda, Sentenced Tobacco and Gutkha Packing Machines (Determination and Collection of Duty) Rules, 2006 - The applicant was alleged to have been engaged in illegal manufacture and packing of chewing tobacco, zarda and scented tobacco pouches through packing machines installed in his premises, without payment of the requisite central excise duty - Whether the applicant should be granted bail in the present case – HELD - The offences alleged are economic offences involving substantial evasion of Government revenue, and such offences constitute a class apart and need to be visited with a different approach in the matter of bail. The prosecution has made out a prima facie case against the applicant, with material including statements, seizure of machines, raw materials and finished products, supporting the prosecution allegations. There is substance in the prosecution's argument that under the amended statutory regime and newly introduced Chewing Tobacco, Zarda, Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026, the liability extends to notified stock and installed packing machinery, and the material collected during the investigation indicates deliberate non-disclosure of packing machines and evasion of statutory obligations – There is possibility of the applicant tampering with evidence and influencing witnesses, as the investigation is still in progress regarding procurement of machinery, supply chain, purchasers, suppliers and involvement of other persons. Given the gravity and nature of the allegations, the huge alleged tax evasion, the statutory scheme under the Rules of 2026 and Notification dated 31.12.2025, and the non-bailable nature of the offence under Section 9A(1A) of the Central Excise Act, the Court is not inclined to extend the benefit of bail to the applicant at this stage - The bail application filed by the applicant stands dismissed
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