Rajiv Krishna, a senior Border Security Force officer, rejected the desecration charges.
Indian Home Minister Sushilkumar Shinde ordered a probe into the incident. Rights groups say such investigations rarely lead to prosecutions and are mainly used to try to calm public anger.
The violence, which comes during the Muslim holy month of Ramadan, could trigger widespread protests in the disputed Himalayan region, with separatist groups that reject India's sovereignty over the region calling for three days of strikes and demonstrations.
In response, the government put a curfew in place. On Friday, thousands of police and paramilitary soldiers erected checkpoints and laid barbed wire on roads in Srinagar, the main city in Kashmir to try and enforce the curfew and prevent any anti-India protests. They drove through neighborhoods warning people to stay indoors and barred Friday prayers in Srinagar's main mosque.
Several other Kashmiri towns were also deserted as shops, businesses and public transportation shut down due to the curfew and strike. Authorities have postponed university examinations scheduled for Friday and blocked Internet services on cell phones in an attempt to prevent demonstrators from organizing.
Kashmir is divided between India and Pakistan, with both countries claiming the region in its entirety.
Anti-India feelings run deep in Indian-held Kashmir, where about a dozen rebel groups have been fighting against Indian rule since 1989. More than 68,000 people have been killed in the conflict.
The rebel groups have largely been suppressed by Indian troops in recent years, and resistance is now principally expressed through street protests.