2018 (7) TMI 37 - HC - Customs

Appeals Denied: Conviction Upheld for Importing Luxury Car, Conspiracy, & Fabrication

M. NATARAJAN Versus STATE

The High Court upheld the trial court's judgment, confirming the conviction and sentences of the appellants for importing a luxury car in violation of ... Import of Luxury car manufactured by Toyoto Company at Japan in the trade name of LEXUS - violation of Customs Regulations for fabricating and forging the import documents and misusing the Transfer of Residence Provisions for import of a passenger car - case of Revenue is that though the car was manufactured in the year 1994, they fraudulently declared as if it was manufactured in the year 1993 and was used by Dr. Balakrishnan (absconding accused) for a period of more than one year before the said import. Whether the trial court judgment bristles with legal and factual infirmities as submitted by the counsels appearing for the appellants? Held that:- The year of manufacturing of the said car is 1994 and not 1993 as found in the Customs Bill of Lading presented by the importer through his Clearing Agent at the time of clearing the vehicle on 8-9-1994. It is also admitted fact that the Custom duty for the import of the said car was paid from the Current Account No. 872 of M/s. Tamilarasi Publications Private Limited which was opened and operated by A-1 in the Indian Bank, Abiramapuram Branch, Chennai. The Bankers Pay Order is marked as Ex.P6. This is also not disputed by the appellants - After settling the Customs duty under KVS Scheme, the vehicle has been taken back by A-3 on 19-9-1994 under Ex.D6. Thus it is clear that the LEXUS car was imported in violation of Transfer of Residence Provisions for import of a passenger car. The settlement under KVS Scheme does not give any immunity to the appellants from prosecution under Sections 120B, 420, 468 and 471 IPC and Prevention of Corruption Act. Validity of reliance placed on the statements given by the accused persons in the DRI proceedings - case of appellant is that the proceedings under DRI literally been lifted by the CBI and photo copy of the documents collected by DRI had been marked without abiding the Law of Evidence. In the said course the statements given by the accused persons in the DRI proceedings had been relied upon by the prosecution to hold the accused guilty - Held that:- It is now well-settled that DRI, Income Tax and Customs Officials are not police officers and statement given to them are admissible in evidence. There is no bar in law to look at the statement of a person given to such officials when he is tried for offence under any other law. It is construed as previous statement given by him pertains to the offencce tried subsequently. For instance if a person gives statement to an Income Tax official under IT Act which discloses a cognizable offence to be investigated by police under IPC such confession statement which is in the nature of extra-judicial confession cannot be thrown out as inadmissible - the contention of the Learned Counsels for the appellants to reject the documents relied by the prosecution which was collected by DRI and the statements of the accused persons to DRI officials is not sustainable. Also, the prosecution has proved the charges positively whereas though the accused persons had opportunity to discharge the burden has not availed it, obviously they had no material. The brand new LEXUS car 3000 CC capacity had been imported to India totally in violation of the Customs Regulations - The Custom duty had not been paid from out of Foreign Inward Remittance but with the Indian Currency remitted into the account of A-1 and operated by A-2. The conviction and sentence imposed by the Learned Principal Special Judge for CBI Cases, is confirmed - appeal dismissed. Issues Involved:1. Import of a luxury car in violation of Customs Regulations.2. Conspiracy to cheat the Government of India.3. Fabrication and forgery of import documents.4. Misuse of the Transfer of Residence Provisions.5. Legal validity of the prosecution post-settlement under the Kar Vivad Samadhan Scheme (KVS Scheme), 1998.6. Admissibility of evidence and statements recorded by the Directorate of Revenue Intelligence (DRI).Detailed Analysis:1. Import of a Luxury Car in Violation of Customs Regulations:The case involves the import of a luxury Lexus car manufactured by Toyota in Japan, sold in London, and imported into India in violation of customs regulations. The appellants were found guilty of evading import duty and cheating the Government of India to the tune of Rs. 1,06,20,471/- by importing the car under false pretenses.2. Conspiracy to Cheat the Government of India:The trial court found that the appellants conspired to import the Lexus car by fabricating documents to circumvent the conditions imposed by the Government of India under the Transfer of Residence Provisions. The conspiracy involved multiple individuals, including the absconding accused Dr. S. Balakrishnan.3. Fabrication and Forgery of Import Documents:The appellants were found guilty of fabricating documents to show that the car was manufactured in 1993 and used by Dr. Balakrishnan for more than a year before import. This was done to exploit the Transfer of Residence Provisions, which allow the import of used cars under certain conditions. The documents included a falsified Bill of Lading, false affidavits, and a forged registration certificate from London.4. Misuse of the Transfer of Residence Provisions:The appellants misused the Transfer of Residence Provisions to import the car by falsely declaring it as used and meeting other conditions required for such imports. The car was actually manufactured in 1994 and was brand new at the time of import.5. Legal Validity of the Prosecution Post-Settlement under the KVS Scheme:The appellants argued that the prosecution was unsustainable because the customs duty dispute was settled under the KVS Scheme, which provides immunity from prosecution. However, the court held that the KVS Scheme does not grant immunity from prosecution under the Indian Penal Code (IPC) or the Prevention of Corruption Act. This position was supported by the Supreme Court's decision in M. Natarajan v. State by Inspector of Police, SPE, CBI, ACB Chennai.6. Admissibility of Evidence and Statements Recorded by the DRI:The appellants contended that the prosecution relied heavily on evidence and statements collected by the DRI, which should not be admissible. The court, however, cited the Supreme Court's ruling in K.T.M.S. Mohd. and Another v. Union of India, stating that statements given to DRI officials are admissible in evidence and can be used in criminal proceedings under other laws.Conclusion:The High Court upheld the trial court's judgment, confirming the conviction and sentences of the appellants. The court found no merit in the appellants' arguments, including the claim of immunity under the KVS Scheme and the challenge to the admissibility of evidence collected by the DRI. The appellants were directed to be taken into custody to serve their remaining sentences.