TaxTMI 
TaxTMI 
2006 (12) TMI 533
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....the learned ACMM. On receiving the summons, the petitioner filed application for his discharge which application has been dismissed by the learned ACMM vide order dated 17.2.2004. In fact, other co -accused had also filed similar application and vide the impugned order, both these applications have been dismissed. In these circumstances, petitioner has approached this Court for dismissal of the said complaint. 2. The brief facts, which can be noticed from the reading of the complaint filed by the complainant, are the following: "On 27.4.1997, the Officers of the Directorate of Revenue Intelligence (DRI) on the basis of specific intelligence intercepted two persons on platform No. 10 at New Delhi Railway Station namely the petitioner and one Chaman Lal. Upon search of the briefcase as alleged by the complainant, being carried by the petitioner, foreign currency equivalent to Indian Rs. 41,22,050/- was found concealed in a false cavity, which could not be explained by the petitioner and the petitioner was apprehended by the Officers of the DRI." 3. In the statement dated 27/28.4.1997 under Section 108 of the Customs Act, 1967 the petitioner admitted the recovery and se....
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....dwania & Another V. Income Tax Officer & Another, 1995 Suppl. (2) SCC 724 and also three judgments of this Court in which the same view is taken, particulars whereof are as under: 1. Munna Lal Khandelwal V. B. Hazra, Enforcement Officer & Others, 83 (2000) DLT 395. 2. M/s. Hitech Carbon Products & Anr. V. Inspector, Anti -Evasion, Central Excise, New Delhi, 82 (1999) DLT 89. 3. Subhash Chander Wadhwa V. Neeraj Garg reported in Criminal Revision No.157/2002. 6. Learned counsel for the DRI, on the other hand, submitted that proceedings before adjudicating authority are entirely on different footing than the proceedings in the complaint case under Section 135 of the Customs Act, filed in a criminal court and such adjudication proceedings will have no bearing on the complaint case filed by the DRI. In support of this proposition, he referred to the Constitution Bench of the Hon'ble Supreme Court in the case of Assistant Collector of Customs Vs. L.R. Malwani, (110) ELT 317 (SC) and also the Division Bench of the Apex Court in the case of Santram Paper Mills V. Collector of Central Excise, 1997 (96) ELT 19 (SC). He also referred to the judgment of Andhra....
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....upon the judgment of Supreme Court in the case of Standard Chartered Bank and Others V. DRI (supra), in support of his plea. Therefore, it would be apt to first discuss this judgment. It was a case where alleging violation of some provisions of FERA, a show cause notice was issued by the department as to why adjudication proceedings for imposition of penalty under section 50 & 51 of FERA be not initiated against the appellant bank and some of its officers. Further notices under Section 61 of the FERA were also issued giving an opportunity to the bank and its officers of showing that they had the necessary permission from the concerned authority for the transaction involved. Appellant bank filed writ petitions in the Bombay High Court seeking declaration that the relevant provisions of the FERA are unconstitutional being violative to Articles 14 & 21 of Constitution of India. Challenge to the constitutional validity of Sections 50, 51 & 68 of the FERA was rejected by the High Court of Bombay. However, at the same time, it clarified that Section 68(1) of the FERA was not applicable to an adjudication proceedings and it was confined to a prosecution for inner offences under the Act. T....
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....ication proceedings as even when penalty was imposed in the adjudication proceedings criminal action was still warranted in view of the provisions Section 56 of the FERA which commences with the words "Without prejudice to any award of penalty by the Adjudicating Officer under this Act". 10. The Court accepted the argument of the Government and held that a complaint under Section 56 of the FERA can never be said to be pre -mature if it is initiated before the award of the penalty under Section 51 of the Act and such proceedings being independent proceedings can be initiated during the pendency of adjudication proceedings under Section 51 of the FERA. Reading of the judgment, thus, in the manner indicated above, would clearly show that what is decided by the Supreme Court is that since two proceedings are independent, even when the adjudication proceedings are not over, the department was competent to launch criminal proceedings as well, alleging violation on the part of the accused person. However, in the present case, we are not concerned with this question. A fine distinction of the issue involved in the case before the Supreme Court and before us in the present case has to....
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.... the accused was not exonerated in the proceedings before the Tribunal. Rather penalty was imposed in adjudication proceedings and the issue related to its effect on criminal proceedings." 12. In Assistant Collector of Customs V. L.R. Malwani (supra) accused was given benefit of doubt in the departmental adjudication by Collector of Customs. Thereafter prosecution was launched against him alleging that he was a party to smuggling conspiracy. The accused pleaded that after he was exonerated in the departmental adjudication proceedings, there could not have been any prosecution against him. The contention was that findings in the departmental adjudication amounted to resjudicata; criminal prosecution amounted to double jeopardy and in view of the findings of the Collector of Customs, the department was estopped from filing such a complaint. These contentions were repelled and not accepted by the Supreme Court. In so far as argument of double jeopardy of Section 403 of Cr.P.C. or Article 20(2) of the Constitution is concerned, the Court opined that proceedings before the Collector of Customs were not in the nature of "prosecution" for an offence and, therefore, there was no questio....
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.... is necessary. In S.K. Sinha V. Singal & Another, 1987 (30) E.L.T. 900. This Court held that it would be unjust to require the petitioner to go through entire process of prosecution when he was exonerated in the departmental adjudication proceedings. Rational in support of this view is found in the following observations: "In criminal matters the degree of proof required is far more strict. If the departmental authority has no good case, for purposes of adjudication, cannot claim to have a good case for purposes of criminal prosecution, particularly when the prosecution is also based on the same set of facts and evidence. It will be most unjust to require the petitioner to go through the entire process of prosecution in the circumstances of this case." 14. In Willi Lemback V. Rajan Mathur & Another - XI, 1992 (3) Cri 692 after following the judgment in S.K. Sinha V. Singal & Another (supra), the Court expressed a similar view in the following terms: "Admittedly the petitioner is being prosecuted on the same set of facts and circumstances, which were, before the Collector of Customs at the time of his verdict he found the appellant to be innocent and exonerated ....
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....l on the same set of facts and evidence. The least that can be said in the case is that if the department does not feel aggrieved of the order of the Competent Authority and accepts it as final and correct, then I fail to understand as to how on the same set of facts and evidence, the department can foist criminal liability upon a person about whom it has accepted the findings of the adjudication proceedings. That apart in the case of P.S. Rajya V. State of Bihar (supra), it was held that the standard of proof required to establish the guilt in criminal case is much higher than the standard of proof required to establish the guilt in the departmental proceedings. In the instant case the charges against the petitioners in the department proceedings and in the criminal proceedings are one and the same. If the charges which are identical could not be established against the petitioners in the departmental proceedings, one wonders what is there further to proceed against them in criminal proceedings. Thus, in view of the facts that the petitioners have been exonerated in the departmental proceedings, the very basis of the complaint does not exist and the petitioners' prosecution on....
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....elied upon its earlier judgment in the case of Uttam Chand V. Income Tax Officer, Central Circle, Amritsar, (1982) 2 SCC 543. 16. Thus on the one hand we have judgments of the Supreme Court in the case of Standard Chartered Bank and Others V. DRI (supra). Assistant Collector of Customs V. L.R. Malwani (supra) and Santram Paper Mills V. Collector of Central Excise (supra) holding that departmental proceedings and criminal cases are two independent proceedings and both can go on simultaneously. On the other hand, we have judgments of the Apex Court in the case of G.L. Didwania & Another V. Income Tax Officer & Another (supra) and Uttam Chand V. Income Tax Officer, Central Circle, Amritsar (supra) taking a view that when there is categorical finding exonerating the person by the Tribunal/departmental proceedings which are conclusive, prosecution cannot sustain. There may appear to be some conflict between the two views expressed in the two sets of judgments. However, a closer scrutiny would reveal that there is no such conflict and in fact these judgments deal with different aspects. The conclusion arrived at by the Andhra Pradesh High Court, in my respectful submission, after r....
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....secution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious criminal complaint is filed by the departmental authorities alleging violation/contravention of the provisions of the Act on the part of the accused persons. However, if the departmental authorities themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the departmental proceedings that ex -facie there is no such violation. The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are identical and the exoneration of the concerned person in the departmental proceedings is on merits holding that there is no contravention of the provisions of any Act." 17. After delineating the proposition of the law as settled by the Apex Court in various judgments in the manner aforesaid, let....
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....egard to the statement of co -accused u/s 108 of the Customs Act held that such statement of co -accused is a substantive evidence against the other accused." 19. It is clear from the above that in the departmental proceedings, the petitioner is not exonerated on merits and it would still be open to the criminal court as to whether the statement of Sunil Gulati under Section 108 of the Customs Act should be believed or not. Therefore, the impugned order of the learned trial court is valid and proper, though the discussion on the issue namely relevance of adjudication proceedings on the criminal cases may not be fully correct which is stated by the learned trial court in the earlier part of the order. Since the conclusion of the learned trial court in the impugned order is otherwise proper and meets the legal test, this petition is devoid of merits and is dismissed. Crl. M.C. No. 1183/2004 20. The complaint under Section 135 of the Customs Act entitled "Department of Customs V. Nitup Lama and Others" is filed wherein the case set up is that on 28.1.994, 39 bails of Shahtoosh and Pashmina weighing 3353.3 kg were seized by the officers of Customs Department from the godown lo....
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....ly, the bill of entry, before presenting the same before the Customs Authorities. Accordingly, he has observed that the appellant is responsible for the act of misdeclaration. It has been argued before us by Shri K.K. Banerjee, learned Advocate for Naresh Kumar Mittal, that the appellant could only identify the goods from the description given in the import papers. It is not possible to examine the goods with naked eye and find out whether the said goods were Shahtoosh Shawls and not Goat -hair. He submits that if that would have been possible, why the Customs Authorities cleared the goods by accepting the same to be Goat -hair. We fully agree with the above argument of the learned Advocate. The Tribunal in the case of Collector of Customs S. Trivandrum Rubber Works Ltd. reported in : 1992 (62) ELT -360(Tribunal) has observed that the clearing agent has no further function to discharge after removal of the goods from Customs station. He cannot be treated as an agent for all time to come even after the goods have been cleared. Inasmuch as there is nothing on record to show that the goods in question were declared by the said clearing agent by adopting the description different than ....
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....the prescribed manner by taking concrete steps. It is further stated in the complaint that since the offence has been committed by the company, all the Directors in terms of Section 68 of the Act are responsible for the offence committed by the company. In this complaint summoning orders were issued. Thereafter, petitioners moved application for discharge for dropping the proceedings initiated against the petitioners had been dropped which proceedings were initiated on identical facts. This application has been dismissed by the learned trial court vide order dated 19.4.2005 and challenging this order the present petition is filed in which prayer is made for quashing proceedings and setting aside summoning orders as well as order dated 19.4.2005 dismissing the application of the petitioners. It may be mentioned at the outset that though the petitioners have taken few other grounds as well on the basis of which petitioners want quashing of the proceedings, the main ground pressed at the time of arguments was that the subject matter of the captioned complaint was identical and similar to the subject matter of the adjudication proceedings pending before the Special Directorate which ha....
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....n No. F -1/67/EC/73 -1 & 3 both dated 1.1.73 and section 18(3) ibid." 23. The defence of the petitioners was that the petitioner No. 1 company had suffered huge losses and, therefore, it filed a reference before the BIFR under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 and was declared a sick company. They also submitted the reasons for non -realisation and efforts taken by them for realisation of export proceeds. In respect of certain directors, it was stated that they never looked and were not responsible to realise export proceeds. After hearing the arguments of both the parties, the Special Directorate who passed the orders took into consideration the reasons given for non -realisation and the various steps taken which are mentioned in detail in the said order and concluded as under: "In view of above, it is clear that the noticees have taken reasonable steps on the basis of which after having been satisfied the noticee company has been granted write off by RBI/banks and wherever the noticee company availed export incentives (Duty Drawback) they furnished evidence of surrender of the same. Therefore, I do not hold the noticees guilty o....