2018 (1) TMI 1186 - HC - Customs

Discharge petition denied under Kar Vivad Samadhan Scheme. Immunity limited to tax laws. Trial to proceed.

The High Court dismissed the discharge petition of the accused seeking immunity under the Kar Vivad Samadhan Scheme 1998. The court clarified that the ... Misdeclaration of imported goods - duty exemption entitlement certificate scheme (DEEC Scheme) - false and fabricated documents - Held that: - In the light of the provision of Kar Vivad Samadhan Scheme 1998 as well as the order passed by the Commissioner of Customs, the plea of the petitioner that by availing the benefit of Kar Vivad Samadhan Scheme 1998 will grant them immunity for all the prosecution under all enactment is unfound. It is to be pointed out that the trial Court had taken note of the immunity granted by the Customs Department and in view of the settlement arrived at, it pointed out that the amount levied under Kar Vivad Samadhan Scheme 1998 had been paid under protest and it has not been tendered unconditionally - the petition to discharge the accused is unsustainable - revision case disposed off. Issues:Dismissal of discharge petition based on immunity under Kar Vivad Samadhan Scheme 1998.Analysis:The petitioners filed a discharge petition claiming immunity under the Kar Vivad Samadhan Scheme 1998, stating that they were prosecuted for mis-declaration of goods imported under the DEEC scheme. The scheme allowed settlements immunizing parties from prosecutions arising from mis-declaration. Despite submitting Form 2B under the scheme and settling tax arrears, the prosecution filed additional charges. The petitioners argued that the trial court failed to consider the scope of immunity under the scheme, as granted by the Commissioner of Customs. They cited the Hira Lal Hari Lal Bhagwati case to support their claim for immunity.Upon review, the High Court found that the petitioners were accused of conspiracy to cheat the government by importing goods under false pretenses and causing wrongful loss. The accused misused their import license, fabricated documents, and diverted goods, leading to charges under various sections of the IPC and the Customs Act. Subsequent investigations revealed further offenses related to customs duty evasion and misuse of the DEEC scheme for personal gain.The court clarified that immunity under the Kar Vivad Samadhan Scheme 1998 only applied to prosecutions under indirect tax enactments, not other laws like the IPC. The certificate issued by the Customs Department specifically mentioned immunity from prosecution under indirect tax enactments. The court noted that the amount paid under protest under the scheme did not grant blanket immunity from all prosecutions.Ultimately, the court held that the petition to discharge the accused based on immunity was unsustainable. However, if the immunity under the scheme covered prosecutions under indirect tax enactments, charges under the Customs Act could not be framed. The court directed the trial court to proceed with framing charges under relevant laws, excluding the Customs Act, and complete the trial within six months.In conclusion, the High Court disposed of the Criminal Revision Case, instructing the trial court to proceed with the trial excluding charges under the Customs Act and ensuring completion within a specified timeframe.