TaxTMI 
TaxTMI 
2016 (5) TMI 298
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....legation of illegal import RAMS & CD PLAYERS worth Rs. 7,50,000/- and subsequently the Petitioner was released on bail. Even after a period of six years the Respondent has not filed any complaint before the court and due to the same the Petitioner suffered a lot. The value sum of Rs. 7,50,000/- was arrived by the Respondent based on the price details available from the internet and the same is not an acceptable method of valuation. The Union Ministry of Finance o 23.10.2015 vide circular No.27/2015 communicated the customs officials to drop the criminal proceedings pending against the accused committed offence to the value of Rs. 20 lakhs in case of baggage and outright smuggling cases and Rs. 1 crore in case of appraising cases and commercial frauds. On perusal of the above circular the Petitioner is falling under both categories. Hence the proceedings pending against the eptitioner deserves to be dropped. Whereas the Learned Special Public Prosecutor stated that the Petitioner has not preferred any appeal against the adjudication orders passed in Order-in-Original dated 17.4.2010 in O.S.No.05/2010 and a penalty of Rs. 1,50,000/- was imposed upon him. Since, he has not preferred a....
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.... the effect that 'for dropping the proceedings' by the prosecution, the Petitioner is to pay the penalty levied in the 'Adjudication Proceedings' and the same cannot be countenanced in the eye of law. 7. Per contra, it is the submission of the Learned Counsel for the Respondent that the Petitioner / Accused had arrested on 03.08.2009 in respect of the offence under Sections 132 and 135 of the Customs Act, while attempting to smuggle electronic goods in commercial quantity on his arrival at Chennai Airport. It is also represented that the Petitioner was later released on 'Bail' with condition and all the cases in this regard are pending before the Learned Additional Chief Metropolitan Magistrate in R.R.No.23 of 2009. As a matter of fact, the arrest of the Petitioner was made on the allegation of illegal import of electronic goods, valued in all at Rs. 7,98,150/-. 8. Expatiating his submission, the Learned Special Public Prosecutor strenuously contends that the Government of Tamil Nadu had issued the detention order against the Petitioner under COFEPOSA G.O.No.SR.1/569-2/2009 dated 15.10.2009 and that since the said Detention Order could not be served on....
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....No.27 of 2015-Customs dated 23.10.2015. 12. The Learned Special Public Prosecutor for Respondent proceeds to take a plea that the Revision Petitioner in the 'Grounds of Revision' in para - E had stated that he is ready to pay the penalty imposed in the adjudication on ' instalments' by citing the CBEC Circular No.996/3/2015-CX dated 28.02.2015, but this Circular was issued in respect of arrears of duty of Central Excise Recoverable from Manufacturers and that the Manufacturers are the assessees who normally have factory/premises where production facilities and Capital Goods are installed and they are registered with Central Excise Department, etc. and therefore, the ingredients of the said Circular are not applicable to this case. More over, the Revision Petitioner/Accused attempted to smuggle the goods into 'India' and did not appear before the Adjudicating Authority in any of the proceedings and did not pay penalty even after six years of adjudication. 13. At this stage, this Court on perusal of the contents of the petition in Crl.M.P.No.3809 of 2015 in R.R.No.23 of 2009 on the file of the trial Court [seeking to drop the proceedings against the Peti....
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.... the aforesaid circular, Sl.No.4.2.2. under the caption 'Exceptions' it is mentioned as under: "The above threshold limits would not apply in case of persons indulging habitually in such violations or where criminal intent is evident in ingenious way of concealment, where prosecutions can be considered irrespective of the value of goods/currency involved in such professional or habitual offenders, etc. provided the cumulative value of 3 or more such offences in past five years from the date of the decision exceeds the threshold limit(s) indicated at sub para 4.2.1 above respectively." 17. Besides above, in the aforesaid Circular No.27 of 2015 dated 23.10.2015, Sl.No.11, 11.1, 11.2, 11.2 and 11.2.3 of the guidelines enjoin as under: "11. Procedure for withdrawal of prosecution 11.1. Procedure for withdrawal of sanction order of prosecution In cases where prosecution has been sanctioned but not filed and new facts or evidences have come to the notice of the Commisionerate or the DGRI which warrant review of the sanction for prosecution, it should be immediately brought to the notice of the sanctioning authority may recommend withdrawal o....
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....ntral Board of Excise and Customs] speaks of recovery of arrears of instalments and amendment of Garnishee Notice. To put it precisely, the said Circular at para Nos.5 to 7 contain the following: 5. It has been decided by the Board to allow recovery of arrears of taxes, interest and penalty in instalments. The power to allow such payment in monthly instalments shall be discretionary and shall be exercised by the Commissioners for granting sanction to pay arrears in instalments upto a maximum of 24 monthly instalments and by the Chief Commissioners for granting sanction to pay arrears in monthly instalments greater than 24 and upto a maximum of 36 monthly instalments. 6. The facility to pay arrears in instalments shall generally be granted to companies which show a reasonable cause for payment of arrears in instalments such as the company being under temporary financial distress. Approval to pay in instalments and the number of instalments should be fixed such that an appropriate balance between recovery of arrears and survival of business is maintained taking into consideration the overall financial situation of the company, its assets, liabilities, income and exp....
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....he provisions of the Customs Act, 1962, is an appealable one. Also that, the Section 132 dealing with 'False declaration, false documents, etc.' provides for Imposition of Fine, in case, the person makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document in the transaction of any business relating to the customs, knowing or having reason to belief that such declaration, statement or document is false in any material particular. 22. One of the essential ingredients of an offence under Section 135 of the Customs Act, 1962, is that the person / accused should have acquired or carried, removed, deposited, harboured, kept, concealed, sold or purchased or in any other manner dealt with any goods which he knew or had reason to believe were liable to confiscation under Section 111 of the Act. In fact, the accused must have knowledge of goods being smuggled in order that he may be held guilty under Section 135 of the Customs Act. As per the decision of the Union of India bv. Kanchanlal Trikamlal, (1977)-32 Excuse C/234 at page C/238. 23. One cannot ignore a relevant fact that in the decision of the Hon'ble Supreme Court in JO....
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....essive. No person should be tried without a prima facie case. The view taken by the High Court is untenable. The appeal is accordingly allowed. The order of the High Court is set aside." 25. Also in the decision of the Hon'ble Supreme Court in RADHESHYAM KEJRIWAL V. STATE OF WEST BENGAL AND ANOTHER reported in (2011) 3 SUPREME COURT CASES 581 at Special Page 583, it is laid down as follows: "Adjudication proceedings are decided on the basis of preponderance of evidence of a little higher degree whereas in a criminal case the entire burden to prove beyond all reasonable doubt lies on the prosecution. The standard of proof in a criminal case is much higher than that of the adjudication proceedings. The Enforcement Directorate has not been able to prove its case in the adjudication proceedings and the appellant has been exonerated on the same allegation. The appellant is facing trial in the criminal case. Therefore, the determination of facts in the adjudication proceedings cannot be said to be irrelevant in the criminal case." 26. As far as the present case is concerned, the Petitioner/Accused had not preferred any 'Appeal' as against the Adjudication Order....
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....launching of prosecution. These cases are: (a) In case where arrest has been made during investigation (for commercial fraud cases as well as outright smuggling cases) or in the case of a habitual offender. (b) In case where arrest has not been made but it relates to outright smuggling of high value goods such as previous metal, restricted items or prohibited items notified under section 11 or goods notified under Section 123 of the Customs Act, 1962 or foreign currency where the value of goods is Rs. 20,00,000/- (Rupees twenty lakh) or more. 6.2. In a recent judgment passed by Hon'ble Supreme Court of India in the case of Radhe Shyam Kejriwal [2011(266)ELT 294(S), the Apex court had, interalia, observed that (i) adjudication proceedings and criminal proceedings can be launched simultaneously; (ii) decision in adjudicating proceedings is not necessary before initiating criminal prosecution; (iii) adjudication proceedings and criminal proceedings are independent of each other in nature and (iv) the findings against the person facing prosecution in the adjudicating proceedings is not binding on the proceeding for criminal prosecution. In view of aforesa....
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....above) 7.3. Prosecution should not be filed merely because a demand has been confirmed in the adjudication proceedings particularly in cases of technical nature or where interpretation of law is involved. One of the important considerations for deciding whether prosecution should be launched is the availability of adequate evidence. The standard of proof required in a criminal prosecution is higher as the case has to be established beyond reasonable doubt whereas the standard of proof in adjudication proceedings is decided on the bases of preponderance of probability. Therefore, even cases where demand is confirmed in adjudication proceedings, evidence collected should be weighed so as to likely meet the test of being reasonable doubt for recommending & sanctioning prosecution. Decision should be taken on case-to-case basis considering various factors, such as, gravity of offence, quantum of duty evaded and the nature as well as quality of evidence collected. 7.4. It is reiterated that in order to avoid delays, Commissioner/Pr. Commr. or ADGRI/Pr.ADGRI/adjudicating authority should indicate, at the time of passing the adjudication order itself as to whether he con....
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....ly depends on the quality of investigation. It is, therefore, necessary for senior officers to take personal interest in investigations of important cases of smuggling / duty evasion and also in respect of cases having money laundering angle and to provide guidance and support to the investigating officers." 31. It is to be pointed out that in the case of Assistant Collector of Customs Vs L.R.Malani 1999 (110) E.L.T. 317 (Supreme Court), the Hon'ble Supreme Court has held that 'Departmental Authority' is not a Court within the meaning of Article 20(2) of the Constitution of India. 32. Besides the above, it is to be noted that Section 132 of the Customs Act is a Bailable one. Further, the offence under Section 135 of the Act is a compoundable one, in terms of Section 137 (3) of the Customs Act. 33. On going through the impugned order dated 11.03.2016 in Crl.M.P.No.3809 of 2015, this Court is of the considered view that the spirit and tenor of the guidelines issued for launching the prosecution, procedure for withdrawal of prosecution, procedure for withdrawal of sanction order, procedure for withdrawal of complaint already filed for prosecution, etc., wer....