2025 (8) TMI 112 - HC - Customs

Anticipatory Bail Granted Under Sections 132 and 135 Customs Act for Import Misdeclaration with Conditions

The HC allowed anticipatory bail to the applicants accused of offences under Sections 132 and 135 of the Customs Act involving misdeclaration in ... Seeking grant of anticipatory bail - compoundable and non-baliable offences punishable under Sections 132 and 135 of the Customs Act, 1962 - misdeclaration in the importation of goods - free import of walnuts - HELD THAT:- The search and seizure operations in this matter have already been concluded. The primary allegation pertains to the submission of false declarations, and it is undisputed that the case rests predominantly on documentary evidence. The allegedly forged declarations and their supporting documents are already in the possession of the customs department. Furthermore, access to relevant emails has been provided by the son of applicant No. 1, who was arrested and subsequently released on bail. There is no record of any prior convictions against the applicants. The applicants have demonstrated their willingness to pursue the statutory remedy of compounding the alleged offence. In this context, they may be directed to cooperate with the investigation, subject to appropriate conditions to allay the concerns of the investigating authority. The object of the compounding mechanism is to ensure enforcement of the Act while providing a route for voluntary compliance and avoidance of protracted litigation or incarceration. In the past, the Courts extended interim protection to the applicants therein during the pending investigation under the Customs Act and the Central Excise Act. In the totality of the circumstances, and in the facts of the present case, the applicants’ willingness to comply with compounding provisions, the stage of the investigation, absence of prior criminal record, the documentary nature of the evidence, the willingness on the part of the applicants to jointly deposit a total amount of Rs.5 Crores with the respondent, and the completion of search and seizure operations collectively merits consideration - this Court deems it fit to allow this application subject to the fulfilment of conditions imposed. Bail application allowed. ISSUES: Whether anticipatory bail can be granted in cases involving allegations of undervaluation and misdeclaration under Sections 132 and 135 of the Customs Act, 1962.Maintainability of anticipatory bail applications before the High Court instead of the Sessions Court in cases involving customs offences.Effect and admissibility of a compounding application filed under Section 137(3) of the Customs Act, 1962 during the pendency of investigation.Appropriate conditions and safeguards to be imposed during investigation and interrogation, including presence of advocate and videography.Whether the filing of a compounding application and willingness to pay determined dues can be a ground for granting anticipatory bail.Assessment of risk factors such as tampering with evidence, absconding, or influencing witnesses in bail considerations. RULINGS / HOLDINGS: The Court held that anticipatory bail can be granted in cases involving allegations under Sections 132 and 135 of the Customs Act, 1962, particularly where the offence is compoundable and the evidence is primarily documentary.It was ruled that it is not mandatory to first approach the Sessions Court before seeking anticipatory bail before the High Court, especially where the High Court has concurrent territorial jurisdiction and complex jurisdictional facts exist; objections on maintainability were found to be devoid of merit.The compounding application filed under Section 137(3) of the Customs Act, 1962 during the investigation stage is admissible and not premature, consistent with the precedent that such applications can be filed 'at any stage, either before or after institution of prosecution.'The Court granted anticipatory bail subject to conditions including execution of PR bonds, furnishing sureties, cooperation with investigation, presence of advocates at a visible but not audible distance during interrogation, and videography of proceedings.The applicants' willingness to comply with compounding provisions and to deposit Rs. 5 Crores was recognized as a relevant factor favoring grant of anticipatory bail.The Court emphasized that applicants shall not tamper with evidence or influence witnesses, addressing concerns of the investigating agency regarding absconding and non-cooperation. RATIONALE: The Court applied the statutory framework of the Customs Act, 1962, particularly Sections 132, 135 (offences relating to undervaluation and misdeclaration), and Section 137(3) (compounding of offences), as well as relevant procedural provisions regarding bail.Precedents were relied upon to clarify that anticipatory bail applications are maintainable before the High Court notwithstanding the general rule favoring Sessions Court jurisdiction, citing decisions that reject rigid territorial limitations in complex jurisdictional situations.In interpreting Section 137(3), the Court followed the decision in Imran Latif Shirgawkar Vs. Directorate of Revenue Intelligence, which held that compounding applications during investigation are permissible and that such offences are bailable.The Court balanced the object of the compounding mechanism-to encourage voluntary compliance and avoid protracted litigation-with the need to protect the investigation from interference, by imposing conditions on bail.The reasoning acknowledged the documentary nature of evidence and absence of prior convictions, which reduced the risk of tampering or absconding, supporting the grant of anticipatory bail.Safeguards such as advocate presence at a visible but not audible distance and videography during interrogation were adopted following prior rulings to prevent coercion and ensure procedural fairness.