Customs offence under Section 135: clarificatory amendment held retrospective, and over-invoiced export allegations sustained prosecution.

Section 135 of the Customs Act was treated as covering both duty evasion and dealings in prohibited goods, with the word "or" operating disjunctively. The 2003 amendment was viewed as clarificatory, reflecting the earlier scheme on export prohibition, confiscation and drawback rather than creating a new offence, and was therefore retrospective. On the allegations of false firms, over-invoiced exports and wrongful duty drawback claims, the complaint was found to disclose a prima facie offence under Section 135, supporting prosecution and justifying refusal of quashing.

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Issues: (i) whether the 2003 amendment to Section 135 of the Customs Act, 1962 was clarificatory and applicable retrospectively; and (ii) whether the complaint disclosed a prima facie offence under Section 135 of the Customs Act, 1962 so as to justify refusal of quashing.

Issue (i): whether the 2003 amendment to Section 135 of the Customs Act, 1962 was clarificatory and applicable retrospectively

Analysis: Section 135, as amended, was read with the pre-amendment scheme of prohibited goods, export prohibition, confiscation and drawback-related provisions. The amendment was viewed against the earlier overlap between the clauses dealing with goods entered for exportation under claim for drawback and the later substitution made by Section 109 of the Finance Act, 2003. On that basis, the amendment was treated as removing duplication and clarifying the existing position rather than creating a wholly new offence.

Conclusion: The amendment was held to be clarificatory and retrospective.

Issue (ii): whether the complaint disclosed a prima facie offence under Section 135 of the Customs Act, 1962 so as to justify refusal of quashing

Analysis: The allegations concerned false firms, over-invoiced export of readymade garments and wrongful claim of duty drawback. The Court held that Section 135 covers not only evasion of duty but also prohibited goods, that the word "or" in the provision is disjunctive, and that prohibited goods include goods prohibited under the Customs Act or any other law. Applying the statutory scheme and the allegations in the complaint, the Court found a prima facie case and declined to interfere with the High Court's refusal to quash the proceedings.

Conclusion: The complaint was held to disclose a prima facie offence under Section 135, and quashing was refused.

Final Conclusion: The appeal failed because the allegations were sufficient to sustain the prosecution under the Customs Act and the challenge to the High Court's refusal to quash was rejected.

Ratio Decidendi: Section 135 of the Customs Act, 1962 applies disjunctively to evasion of duty and to dealings with prohibited goods, and allegations of over-invoiced export and wrongful drawback can constitute a prima facie offence warranting prosecution.

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