2005 (5) TMI 79 - HC - Customs

Petitioner granted bail in customs duty evasion case under D.B.E.C. Scheme

The Court granted bail to the petitioner in a case involving alleged evasion of customs duty and fraud under the D.B.E.C. Scheme. The decision was based ... Prosecution - Bail Issues:1. Bail application in a case involving alleged evasion of customs duty and fraud under the D.B.E.C. Scheme.Analysis:The petitioner, acting as a commission agent for a company, is accused of being the mastermind behind a scheme where polyester fabrics were imported under the D.B.E.C. Scheme to avail duty concessions/exemptions. The prosecution alleges that the goods were diverted in the local market instead of meeting the export obligation, resulting in the evasion of customs duty amounting to crores. The petitioner had deposited a partial sum in good faith during the proceedings before the Sessions Court and offered to deposit the remaining amount upon release.The State vehemently opposed the bail application, arguing that the petitioner orchestrated the fraudulent import scheme, evading a significant amount of customs duty. The State highlighted the petitioner's role in obtaining import licenses through fraudulent means and diverting the imported goods, leading to the evasion of Rs. 6.40 crores in customs duty. Additionally, the State pointed out that two employees of the petitioner were not cooperating, suggesting the petitioner's influence over them.The petitioner's counsel cited the introduction of Section 137(3) in the Customs Act, making offenses compoundable, as a reason to grant bail. It was argued that further custody was unnecessary as all interrogation had been completed, and the required documents were already in possession. Considering the submissions from both sides, the Court granted bail to the petitioner on certain conditions, including a substantial bond amount, deposit requirements, surrendering the passport, and compliance with investigation procedures.In conclusion, the Court, after evaluating the arguments and circumstances, decided to release the petitioner on bail with specific conditions to ensure compliance and cooperation with the ongoing investigation. The decision balanced the interests of justice with the petitioner's right to liberty, taking into account the nature and seriousness of the allegations related to customs duty evasion and fraud under the D.B.E.C. Scheme.