The Court of the Remand Magistrate/Additional Chief Judicial Magistrate, Meerut, has remanded accused Nitin Rajesh to judicial custody till May 8, 2026, in connection with an alleged tax evasion of approximately ₹14 crore involving pan masala and tobacco products under Health Security Cess Act, 2025.

The accused, Nitin Rajesh, son of Rajeshwar Kumar Garg and a resident of Meerut, was produced before the court on April 25, 2026, following an application filed by the Senior Intelligence Officer, Sachida Yadav. According to the prosecution, the accused is a director in two companies—M/s Pulkiya Organics Pvt. Ltd. and M/s Bright Life Fragrance Pvt. Ltd.—which were allegedly engaged in clandestine manufacturing and sale of pan masala and tobacco without payment of applicable taxes.

Based on intelligence inputs, authorities discovered that the firms were evading taxes by producing and distributing goods under the brand names “Dakak” (pan masala) and “P-9” (tobacco), resulting in substantial loss to government revenue.

Investigating authorities conducted extensive search operations at the business premises of the companies as well as the residential premises of the accused. During these searches, officials recovered large quantities of raw materials, finished goods, and machinery used in the manufacture of pan masala and tobacco products.

Further searches at additional disclosed and undisclosed locations led to the seizure of more stock and three manufacturing machines, strengthening the case of organized, large-scale evasion.

The alleged tax evasion has been quantified under the Health Security Cess Act, 2025 (effective February 1, 2026), and the Central Excise Act. Authorities calculated Rs. 9.09 crore evasion on pan masala, and Rs. 4.98 crore evasion on tobacco products

The total evasion, amounting to approximately ₹14 crore, was determined based on seized records, application of Schedule II provisions, and Notification No. 04/2025.

The Special Public Prosecutor informed the court that the accused was initially summoned on April 24, 2026, and his statement was recorded over several hours before being released. He was again summoned on April 25, 2026, and after further questioning, was arrested at around 4:00 PM from the CGST office in Meerut, considering that the alleged tax evasion exceeded ₹5 crore.

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The accused was produced before the court at 6:30 PM on the same day. Authorities confirmed that all legal formalities, including providing the arrest memo and grounds of arrest, were duly complied with and furnished to the accused and his relative.

The prosecution placed substantial material before the court, including samples of raw materials and finished goods, seized manufacturing machinery, registers and business records and statements of the accused and machine operators

The accused opposed the remand, arguing that the accused has been falsely implicated. No direct recovery was made from him personally. He possesses a valid license for manufacturing activities. The action was a result of harassment

The accused suffers from medical conditions including blood pressure, diabetes, and heart ailments (supported by medical documents)

The defense sought rejection of the remand application on these grounds.

After hearing both sides and examining the record, the court observed that there exists prima facie evidence indicating involvement in a serious economic offence. The alleged tax evasion is substantial, amounting to Rs. 14 crore. Arrest and procedural requirements appear to have been duly followed. The investigation is at a crucial stage, and further facts are likely to emerge.

The prosecution case was prepared by SPP Lakshay Kumar Singh, Meerut Zone.

Legal Provision 

Schedule II of the Health Security Cess Act, 2025 prescribes the monthly cess payable based on the method of packing—machine-based or wholly manual. The liability primarily depends on the speed of packing machines (measured in pouches per minute) and the weight of goods per pouch, tin, or container.

For machine-based processes, the cess increases with both the speed of the machine and the weight category of the goods. Where the machine operates up to 500 pouches per minute, the cess ranges from ₹101 lakh per month for goods up to 2.5 grams, ₹364 lakh for goods above 2.5 grams but below 10 grams, and ₹849 lakh for goods above 10 grams. For machines operating between 501 and 1000 pouches per minute, the cess increases to ₹202 lakh, ₹728 lakh, and ₹1698 lakh respectively for the same weight categories.

For higher capacity machines operating between 1001 and 1500 pouches per minute, the cess is ₹303 lakh for goods up to 2.5 grams, ₹1092 lakh for goods above 2.5 grams but below 10 grams, and ₹2547 lakh for goods above 10 grams. In cases where the machine speed exceeds 1500 pouches per minute, the cess is calculated proportionately using a formula based on the machine’s maximum rated capacity (denoted as “S”). The applicable cess is derived by multiplying the base cess with S divided by 450.

In contrast, for wholly manual processes, the cess is fixed at ₹11 lakh per month, irrespective of the speed of operation or the weight of the goods being packed.

The Schedule also clarifies that where a packing machine contains multiple tracks or lines and performs supplementary processes such as moulding or shaping for branding or anti-counterfeiting purposes, each pair of tracks or lines may be treated as a separate machine for cess computation. Additionally, the number of machines to be considered for calculating cess liability is to be determined in accordance with rules prescribed by the Central Government.

Machine-Based Process

Manual Process

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