2015 (8) TMI 436 - SC - Customs

Supreme Court reinstates charges in duty fraud case, emphasizes trial based on merits.

The Supreme Court overturned the High Court's decision and reinstated the Special Court's order to frame charges against the respondents. The Court found ... Criminal misconduct by public officer – Forged shipping bills – Accused nos. 1-3 filed Shipping Bills and said documents were assessed by respondent No. 1 and after such assessment goods were examined by respondent No. 2 – Accused No. 1 produced different sets of forged shipping bills by adding digit before total quantity of shipment thereby inflating value of shipment and fraudulently claimed duty drawback – Said forged documents were endorsed by respondents – High Court vide impugned order held that no case made out against respondents – Held that:- documents placed on record which were part of charge sheet, certainly raise grave suspicion against respondents and Special Court was right in framing charges against respondents – High Court was not justified in stating that Section 15 of Prevention of Corruption Act, 1988 could not be invoked – Since duty drawback was not actually availed, prosecution had rightly alleged that there was attempt to commit offence under relevant clauses of Section 13(1) of POC Act –Therefore, order of high court set aside – Decided in favour of Appellant. Issues Involved:1. Legitimacy of framing charges against the respondents.2. Application of Section 15 of the Prevention of Corruption Act, 1988.3. Evaluation of material evidence by the High Court.Detailed Analysis:1. Legitimacy of framing charges against the respondents:The case originated from allegations of a criminal conspiracy involving the submission of false and fabricated documents to claim duty drawback fraudulently. The accused allegedly inflated the quantity and value of shipments through forged shipping bills, resulting in an attempted fraudulent claim of Rs. 2.14 crores. The Special Court, upon reviewing the evidence, found sufficient grounds to frame charges under various sections of the IPC, the Prevention of Corruption Act, and the Customs Act. The High Court, however, found no material evidence to justify the charges and set aside the Special Court's order. The Supreme Court disagreed with the High Court, emphasizing that the material on record raised 'grave suspicion' against the respondents, thus justifying the framing of charges.2. Application of Section 15 of the Prevention of Corruption Act, 1988:The High Court observed that Section 15 of the POC Act, which pertains to punishment for an attempt, could only be invoked if charges were framed under Section 13(1)(c) or (d). Since the Special Court did not charge the respondents under these sections, the High Court concluded that Section 15 could not be applied. The Supreme Court countered this by stating that the prosecution's allegation of an attempt to commit an offense under Section 13(1) was valid, even if the duty drawback was not actually availed. The Supreme Court clarified that it is not a legal requirement to charge under Section 13(1)(c) or (d) to invoke Section 15, thus finding the High Court's assessment incorrect.3. Evaluation of material evidence by the High Court:The High Court's decision was based on the absence of material evidence to raise even a strong suspicion against the respondents. The Supreme Court, however, reviewed the documents, including shipping bills and exchange control declaration forms, which showed discrepancies in the quantity and value of shipments. These discrepancies indicated an attempt to inflate duty drawback claims. The Supreme Court referenced established legal principles, highlighting that at the stage of framing charges, the court must evaluate whether the material on record discloses a prima facie case and raises grave suspicion. The Special Court's decision to frame charges was deemed appropriate as it was based on such grave suspicion.Conclusion:The Supreme Court set aside the High Court's judgment, reinstating the Special Court's order to frame charges against the respondents. The Court emphasized that the material on record warranted a trial, and the High Court's interpretation of the applicability of Section 15 of the POC Act was incorrect. The respondents were thus required to face trial, with the Supreme Court clarifying that it had not expressed any opinion on the merits of the case, which should be decided by the concerned court purely on merits. The appeal was allowed, and the trial was to proceed based on the charges framed by the Special Court.