TaxTMI 
TaxTMI 
2020 (9) TMI 808
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....r order or directions holding that the investigations into the Cognizable offence(s) under the Customs Act, 1962 shall not be done without complying Sections 154, 156, 157 & 172 Code of Criminal Procedure, 1973 and the investigation carried out for the cognizable offence(s) under the Customs Act, 1962 without be illegal, non-est, null and void ab initio as also without jurisdiction; unconstitutional, arbitrary, violative of Article 14 and 21 of the Constitution of India. (C) Issue Writ of Mandamus or Writ of Prohibition or any other appropriate Writ, Order or Directions and thereby this Hon'ble Court may Read Down, Expound, Elaborate and Delineate the Scope and ambit of provisions of Customs Act, 1962 (as amended) especially those relating to Chapter XIII (Searches, Seizure and Arrest) especially Section 104; Chapter XVI (Offences and Prosecutions) especially Section 135 thereof (Evasion of duty or prohibitions), Section 137 (Cognizance of offences) etc. in harmony as well as in juxtaposition with Article 21 of the Constitution of India while striking balance with the individual right for fair procedure as also to ensure that resort to the penal action is taken by the Authorities....
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....r orders which this Hon'ble Court may deem fit and proper in the interest of justice." The case put up by the writ-applicant may be summarised as under : 2. The writ-applicant is one of the Directors of a company running in the name of Mahavir Polyfilms Private Limited. The company is engaged in the business of import of plastics past ten years. It is the case of the writ-applicant that he acts as a high-sea seller to a partnership firm running in the name of Ramniklal & Sons. 3. The respondent no.2 - Senior Intelligence Officer, Directorate of Revenue Intelligence, Sub-Regional Unit at Vapi, has initiated an inquiry against M/s.Ramniklal & Sons in connection with the alleged evasion of duty in the import of goods under the duty free scheme. 4. It is the case of the writ-applicant that he is just a high-sea seller to M/s.Ramniklal & Sons and is not aware about the transactions of duty free imports. 5. It appears from the materials on record and the pleadings that the respondent no.2 is also contemplating to institute criminal prosecution for the offences punishable under Sections 132 and 135 respectively of the Customs Act, 1962. 6. The respondent no.2 issued summons date....
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.... writ- application. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT : 14. Mr.Chetan Pandya, the learned counsel appearing for the writ-applicant, has raised the following questions of law for the consideration of this Court : (1) Can arrest be made exercising powers under Section 104 of the Customs Act, 1962 without following the due procedure as envisaged under Section 28 of the Act, 1962 ? (2) Whether a person can be arrested for any cognizable offence under the Customs Act, 1962, without following the dictum of the Supreme Court as laid in the case of Lalitha Kumari v. Government of Uttar Pradesh and others, reported in (2014)2 SCC 1 ? In other words, whether a person can be arrested in connection with any cognizable offence alleged to have been committed under the Customs Act, 1962 without following or complying with the provisions of Sections 154 to 157 of the Code of Criminal Procedure, 1973 ? (3) Whether the officials of the Directorate of Revenue Intelligence at Vapi have the jurisdiction to initiate and continue with the investigation though no cause of action and/or offence under the Customs Act, 1962, could be said to have been committed within their territorial ju....
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.... with the following : "(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974) an offence punishable under section 135 relating to - (a) evasion or attempted evasion of duty exceeding fifty lakh rupees; or (b) prohibited goods notified under section 11 which are also notified under sub-clause (C) of clause (i) of sub-section (1) of section 135; or (c) import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds one crore rupees; or (d) fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds fifty lakh rupees, shall be non-bailable. (7) Save as otherwise provided in sub-section (6), all other offences under this Act shall be bailable." 18. Thus, the 'classification of offences' under Section 135 of the Customs Act, 1962, again came to be amended with effect from 10th May 2013 and the offences committed under Section 135 of the Customs Act, 1962, on or after 10th May 2013 relating to the four clauses under the substituted sub-section (6) w....
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....s concerned, could be said to have arose at the port of discharge. In other words, the officials under the Customs Act, 1962, can initiate the proceedings for evasion of the Customs duty within the territorial jurisdiction where the goods are imported or to be utilized if exempted from the payment of duty under any license or exemption circular/notification or scheme. Referring to the decision of the Supreme Court in the matter of Union of India and others v. Ram Narain Bhiswanath and others, reported in (1998)9 SCC 285, Mr.Pandya would argue that the cause of action for initiating the proceedings for evasion of the Customs duty arises at the port of discharge. In other words, once the goods are assessed by the Customs Officer, the cause of action arises within the jurisdiction of the Customs Officer who, at the first initial stage, assessed the goods, because while passing an assessment order, the officer would be exercising quasi-judicial power. 24. Mr.Pandya thereafter argued that the DRI officer is not a 'proper officer' as held by the Supreme Court in the case of Commissioner of Customs v. Sayed Ali and another, reported in (2011)3 SCC 537. It is argued that in view o....
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....ister FIR in respect of an offence under Section 135 of the Customs Act. While referring to the various provisions in the Customs Act and the Code of Criminal Procedure, Mr.Vyas submitted that the Code has very limited applicability in respect of the matters covered by the Customs Act. Mr.Vyas would argue that the Code applies only to the extent it is provided in the Customs Act. The registration of FIR is not a requirement under the Customs Act. He would vehemently argue that the Customs/ DRI officers are not the police officers. 30. Mr.Vyas would argue that Sections 154 to 157 and 173(2) of the Code of Criminal Procedure, 1973, do not apply to a case under the Customs Act, 1962. 31. Mr.Vyas would submit that the allegations of harassment at the end of the DRI officials at Vapi are without any foundation. He would submit that this Court may not take cognizance of such stray allegations of harassment. Mr.Vyas would argue that the DRI officials intend to interrogate the writ- applicant in connection with a very serious economic offence and it is expected of the writ-applicant to cooperate in such investigation. Mr.Vyas would submit that there is no merit in the submissions canvass....
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....canvassed on either side and the above referred questions, we must look into few relevant provisions of the Customs Act, 1962, as well as the Code of Criminal Procedure, 1973. 36. The Customs Act consolidates and amends the law relating to Customs. Chapter IV empowers the Central Government to prohibit import or export of goods of specified description. Chapters IVA to IVC relate to detection of illegally imported goods, prevention of disposal thereof, etc. Chapter XIII (Sections 100-110) is an important chapter and deals with search, seizure and arrest. Sections 100-103 authorise the Customs Officers to search suspected persons. Section 104 enables the Customs Officers to arrest a person. Similarly, the power to search premises and conveyances is found in Sections 105 to 106A. Sections 107-09 empower the Customs Officers to examine persons and summon them to give evidence and produce documents. Seizure of goods, documents and things can be effected under Section 110. Chapter XIV provides for confiscation of goods and conveyances as also imposition of penalties. Chapter XVI (Sections 132-140A) deals with offences and prosecutions. 37. Having noticed the relevant provisions ....
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....Code of Criminal Procedure, 1898 (5 of 1898), an offence under this Act shall not be cognizable." 39. Section 104 thus empowers a Customs Officer to arrest a person if he has 'reason to believe' that such person has committed any offence mentioned therein. It also enjoins the officer to take the arrested person to a Magistrate 'without unnecessary delay'. The section also provides for release of such person on bail. 40. As we are dealing with the subject of Section 108 of the Customs Act, 1962, we may remind ourselves that the constitutional validity of Section 108 of the Act, 1962, came to be challenged before this High Court in the case of Rajnishkumar Tuli Proprietor and another v. State of Gujarat and another, reported in MANU/GJ/7361/2007. A coordinate bench of this Court, while upholding the validity of Section 108 of the Customs Act, 1962, held as under : "25. After having heard learned advocates appearing for the respective parties and after having gone through the memo of petitions, affidavit-in-reply, rejoinder affidavit as well as documents attached therewith, we are of the view that there is no substance or merits in the arguments canvassed on behalf....
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....ention or detection of offences and the legislative intention behind it is to safeguard the revenue and reimburse the Government which are not essentially powers of a criminal prosecution. It is also to be seen that it is not a solitary case of the petitioners that they have been summoned to Ahmedabad to give their evidence. Many of the High Seas sellers from Mumbai who had sold the imported goods to Tarachand Group of Companies were summoned to Ahmedabad to give their evidence and their confessional statements were recorded under Section 108 of the Customs Act. It is also relevant consideration to decide the issue that there is serious allegation against the petitioners to the effect that they are consciously involved in the diversion of the duty free raw material of Tarachand Group of Companies. It is, therefore, not feasible for a Gazetted Officer to carry all the records to each and every place to record the evidences of various persons involved in the investigation. It is also clear from the very nature of proceedings that the Customs Officers are not Police Officers and only for limited purposes in relation to the Criminal Procedure Code, provisions had been made in some case....
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....e Court in the case of Percy Rustomji Basta v. The State of Maharashtra wherein it is held that a person summoned under Section 108 of the Customs Act is bound to appear and state the truth when giving evidence. The fact that the petitioners have chosen not to appear itself is indicative of the intention of the petitioners to evade participating in the investigation process. It cannot be expected that the department should adopt a system or practice of going to different places for the purposes of recording the statements of the persons under Section 108 of the Act during the course of investigation. For all these reasons, we are of the view that the provisions contained in Section 108 of the Customs Act are in accordance with the constitutional principles and they are not violative of either Article 14 or 20(3) of the Constitution of India." 41. We may also quickly answer the question as the same is no longer res integra, whether the Customs/DRI officers are police officers and whether they are required to register FIR in respect of an offence under Sections 133 to 135 of the Customs Act, 1962. 42. In Lalitha Kumari v. Government of Uttar Pradesh and others, (2014) 2 SCC 1), t....
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....te an offence triable by a Magistrate, nor has he the power to submit a report under Section 173 of the Code of Criminal Procedure. He can only make a complaint in writing before a competent Magistrate. ..................... 11. The remaining contention that a person against whom an enquiry is made by the Customs Officer under the Sea Customs Act is a person accused of an offence and on that account he cannot be compelled to be made a witness against himself, and the evidence if any collected by examining him under Section 171-Aof the Sea Customs Act is inadmissible has, also no substance. Why Article 20(3) of the Constitution a person who is accused of any offence may not be compelled to be a witness against himself. The guarantee is, it is true, not restricted to statements made in the witness box. This Court in State of Bombay v. Kathi Kalu Oghad, AIR 1961 SC 1808, observed at p.37 (of SCR) : (at p.1817 of AIR). "To be a witness' means imparting knowledge in respect of relevant facts by oral statement or a statement in writing, made or given in Court or otherwise. "'To be a witness' in its ordinary grammatical sense means giving oral testimony in Court. Case ....
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....e liable to confiscation. He is also invested with the power to release a person on bail. He is entitled to order confiscation of smuggled goods and impose penalty on persons proved to be guilty of infringing the provisions of the Act. It is implicit in the provisions of Section 137 that the proceedings before a Magistrate can only be commenced by way of a complaint and not on a report made by a Customs Officer. 24. In certain matters the Customs Act of 1962 differs from the Sea Customs Act of 1878. For instance, under the Sea Customs Act search of any place could not be made by a Customs Officer of his own accord: he had to apply for and obtain a search warrant from a Magistrate. Under Section 105 of the Customs Act, 1962, it is open to the Assistant Collector of Customs himself to issue a search warrant. A proper officer is also entitled under that Act to stop and search conveyances: he is entitled to release a person on bail, and for that purpose has the same powers and is subject to the same provisions as the officer in charge of a police station is. But these additional powers with which the Customs Officer is invested under the Act of 1962 do not, in our judgment, make him ....
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....tion he did not have the power to submit a charge-sheet under Section 173 of the Code " 45. In Badaku Joti Savant v. State of Mysore, AIR 1966 SC 1746, a Constitution Bench of the Supreme Court held that a Central Excise Officer under the Central Excise and Salt Act, 1944, has no power to submit a charge sheet under Section 173 of the Code of Criminal Procedure. It was held that a police officer for the purposes of clause (b) of Section 190 of the Code can only be a police officer properly so-called. A Central Excise officer will have to make a complaint under clause (a) of Section 190 of the Code. 46. In Superintendent of Customs v. Ummerkutty & others, 1984 K.L.T. 1, it was held that an officer acting under the provisions of the Customs Act is not a police officer or an officer- in-charge of a police station as contemplated in the Code of Criminal Procedure. Therefore, he cannot initiate action under Section 190(1)(b) of the Code. He is entitled to submit a complaint under Section 190(1)(a) of the Code. 47. In Percy Rustomji Basta v. The State of Maharashtra, AIR 1971 SC 1087, following the decision in Ramesh Chandra Mehta v. The State of West Bengal, AIR 1970 SC 940, the Supr....
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....ort under Section 190(1)(b) of the Code whereas the empowered or authorised officer of the special Acts has to file only a complaint of facts constituting any offence under the provisions of the Act on the receipt of which the Magistrate may take cognizance of the said offence under Section 190(1)(a) of the Code. After taking cognizance of the offence either upon a police report or upon receiving a complaint of facts, the Magistrate has to proceed with the case as per the procedure prescribed under the Code or under the special procedure, if any, prescribed under the special Acts. Therefore, the word 'investigation' cannot be limited only to police investigation but on the other hand, the said word is with wider connotation and flexible so as to include the investigation carried on by any agency whether he be a police officer or empowered or authorised officer or a person not being a police officer under the direction of a Magistrate to make an investigation vested with the power of investigation. ................. 120. From the above discussion it cannot be said that either the Officer of Enforcement or the Customs Officer is not empowered with the power of investigati....
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....t, 2010 (260) E.L.T. 526 (Guj.), considered the question whether the authorities under the Central Excise Act, 1944, have the power to arrest a person under Section 13 of the said Act without a warrant and without filing an FIR or lodging a complaint before a court of competent jurisdiction. This Court held that mere conferment of powers of investigation into criminal offences under the Central Excise Act does not make the Central Excise officer a police officer. It was further held: "26, From the decisions referred to hereinabove, the following principles emerge:- ........ (v) Where a Customs Officer arrests a person and informs that person of the grounds of his arrest (which he is bound to do under Article 22(1) of the Constitution) for the purposes of holding an enquiry into the infringement of the provisions of the Customs Act which he has reason to believe has taken place, there is no formal accusation of an offence. In case of an offence by infringement of the Customs Act and punishable at the trial before a Magistrate there is an accusation when a complaint is lodged by an officer competent in that behalf before the Magistrate. (vi) Arrest and detention are only for th....
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....t made under this Act shall be carried out in accordance with the provisions of the Code of Criminal Procedure ......." Thus, no arrest can be made by an officer of the Central Excise except by following the procedure applicable to the cases involving non-cognizable offences under the Code of Criminal Procedure. Is it so? 17. In terms of the provisions of Section 2(c) of the Code of Criminal Procedure, a cognizable offence is one "for which ....... a police officer may ...... arrest without warrant." Similarly, according to Section 2(l), a non-cognizable offence is that "for which ...... a police officer has no authority to arrest without warrant." Despite the fact that punishment for offences under Section 9 may extend to imprisonment for seven years, these are deemed to be non-cognizable within the meaning of Code of Criminal Procedure, 1898. When the provisions are literally construed, the implication is merely that a police officer shall not be able to arrest a person who has committed an offence under Section 9 without a warrant. However, the provision does not say that an "Excise Officer shall be debarred from arresting a person who has committed an offence under Section 9 ....
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....ficer may, in order to enable him to discharge his duties efficiently, be invested with some powers, which may have similarity with those of the Police officers, yet since the primary purpose of investing of such powers in him is not for the purpose of maintaining law and order but for a specific purpose such as, safeguarding the revenues of the State or its economy, he will not fall within the expression 'police officer' and the statement recorded by him would not be hit by Section 25 of the Evidence Act. This view has been later reaffirmed in the case of Badaku Joti v. State of Mysore, 1966 CriLJ 1353, by a bench of five Judges. 57. We may also look into the decision of the Supreme Court in the case of Raja Ram v. State of Bihar, 1964 CriLJ 705. That case arose under the Bihar and Orissa Excise Act, 1915, where it was strenuously argued that the earlier view had been modified. In this case, a statement was recorded by the Sub-Inspector of Excise, and at the time of the trial, a contention was raised that Section 25 of the Indian Evidence Act was applicable inasmuch as his powers were those of a Police officer, therefore, he fell within the expression 'police officer&....
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....ot derived from or by reference to the Code. Their Lordships distinguished Barkat Ram's case, [1962]3 SCR 338 and held that the statement recorded by the Excise officer was hit by Section 25 of the Evidence Act. 59. A similar case again came up before the Supreme Court in Badaku Joti (supra) which has been referred to above by us. As we have stated, the case was decided by a bench of five Judges. Both Barkat Ram's case, [1962]3 SCR 338 and Raja Ram's case, 1964 CriLJ 705, were referred to. The question as to whether Section 25 of the Evidence Act should be construed in a narrow way as was done in Radha Kishun Marwari, v. Emperor, ILR 12 Pat 46 = AIR 1932 Pat 293, or liberally as was done in Nanoo Sheikh Ahmed v. Emperor, AIR 1927 Bom 4, was left open. The case arose under the Central Excise and Salt Act, 1944, and Their Lordships held that even if the wider meaning of the expression 'Police Officer' were adopted, the officer under the Central Excises and Salt Act could not be regarded as a police officer and Section 25 of the Evidence Act would not apply to a statement recorded by such an officer. In this case the test of main purpose of giving of the powers wa....
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....o be committed to jail or to be kept in the custody of a Police for such time as was necessary to enable the Magistrate to communicate with the proper officers of the Customs and it provided that the Magistrate should release any such person on his giving satisfactory security. Section 104 of the Customs Act, 1962 restricts the exercise of the power of arrest to officers who are either generally or specially authorised by the Collector of Customs only if they have reason to believe that an offence has been committed. The marked difference between Section 173 of the old Act and Section 104 of the Act, 1962 is that, under the old Act he could arrest on a reasonable suspicion, while under the new section he must have reasonable belief that the person has been guilty of an offence. Certainly, the provision is for the benefit of the citizen and it is not intended to invest the Customs officers with larger powers. Sub- section (2) of Section 104 of the Act, 1962, is practically similar to Section 174 of the old Act except that the word 'forthwith' has been substituted with the words 'without unnecessary delay'. This, however, means the same thing. It is intended to meet a....
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...., would not apply to such investigations. 64. In Illias v. Collector of Customs, reported in (1969) 2 SCR 613, the Supreme Court summarized the comparison made between the duties and powers of Police Officers and Customs Officers made in Barkat Ram's case as follows: (1) The police is the instrument for the prevention and detection of crime which can be said to be the main object of having the police. The powers of Customs Officers are really not for such purpose and are meant for checking the smuggling of goods and due realization of Customs duties and for determining the action to be taken in the interest of the revenue country by way of confiscation of goods on which no duty had been paid and by imposing penalties and fines. (2) The Customs staff has merely to make a report in relation to offences which are to be dealt with by a Magistrate. The Customs Officer, therefore, is not primarily concerned with the detection and punishment of crime but he is merely interested in the detection and prevention of smuggling of goods and safeguarding the recovery of Customs duties. (3) The powers of search etc. conferred on the Customs Officers are of a limited character and have ....
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....hree years. Such being the position the offence is non- bailable. 66. The court held that sub-section (2) of Section 4 provides that all offences under any law other than the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions (that is to say provisions of the Code of Criminal Procedure), subject to two limitations. In case there is some enactment regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences, the provisions contained in the said enactment would prevail against the corresponding provisions of the Code. In the matter of the provisions of the Code of Criminal Procedure as to bails and bonds embodied in Chapter XXXIII of the Code, the provisions would be attracted even in regard to offences under the Customs Act by virtue of sub- section (2) of Section 4 of the Code. The court was of the view that a person arrested under Section 104(1) of the Customs Act would certainly fall within the orbit of the expression 'Suspected of the commission of any non-bailable offence'. The court held that a person arrested by a Customs Officer under Section 104 w....
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.... of the Constitution. The steps taken by the Customs Officer are for the purpose of holding an enquiry under the Customs Act and for adjudging confiscation of goods dutiable or prohibited and imposing penalties. The Customs Officer Officer does not at that stage accuse the person suspected of infringing the provision of the Customs Act with the commission of any offence. His primary duty is to prevent smuggling and to recover duties of customs: when collecting evidence in respect of smuggling against a person suspected of infringing the provisions of the Customs Act, he is not accusing the person of any offence punishable at a trial before a Magistrate. (iv) Where a Customs Officer arrests a person and informs that person of the grounds of his arrest (which he is bound to do under Article 22(1) of the Constitution) for the purposes of holding an enquiry into infringement of the provisions of the Customs Act which he has reason to believe has taken place, there is no formal accusation of an offence. In case of an offence by infringement of the Customs Act and punishable at the trial before a Magistrate there is an accusation when a complaint is lodged by an officer competent in th....
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.... As has been indicated hereinbefore in this judgment, Section 2(a) of the Code defines 'bailable offence' to be an offence shown as bailable in the First Schedule to the Code or which is made bailable by any other law for the time being in force. The First Schedule to the Code which deals with classification of offences is in two parts. The first part deals with offences under the Penal Code, while the second part deals with classification of offences in respect of other laws. Inasmuch as, the offences relate to the offences under the 1944 Act, it is the second part of the First Schedule which will have application to the cases in hand. The last item in the list of offences provides that if the offence is punishable with imprisonment for less than three years or with fine only, the offence will be non-cognizable and bailable. Accordingly, if the offences come under the said category, they would be both non-cognizable as well as bailable offences. However, in the case of the 1944 Act, in view of Section 9-A, all offences under the Act have been made non-cognizable and having regard to the provisions of Section 155, neither could any investigation be commenced in such cases, ....
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....ust also be held to be bailable. 38. The expression "bailable offence" has been defined in Section 2(a) of the Code and set out hereinabove in para 6 of the judgment, to mean an offence which is either shown to be bailable in the First Schedule to the Code or which is made bailable by any other law for the time being in force. As noticed earlier, the First Schedule to the Code consists of Part I and Part II. While Part I deals with offences under the Penal Code, Part II deals with offences under other laws. Accordingly, if the provisions of Part II of the First Schedule are to be applied, an offence in order to be cognizable (sic non-cognizable) and bailable would have to be an offence which is punishable with imprisonment for less than three years or with fine only, being the third item under the category of offences indicated in the said Part. An offence punishable with imprisonment for three years and upwards, but not more than seven years, has been shown to be cognizable and non-bailable. If, however, all offences under Section 9 of the 1944 Act are deemed to be non-cognizable, then, in such event, even the second item of offences in Part II could be attracted for the purpose....
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.... Criminal Procedure, 1973. We quote the relevant observations thus : "124. In our considered view, for the same reason the question, 'whether the arresting authority was required to follow the procedure laid down in Section 155(1) of the Code', becomes redundant. 125. Section 155(1) of the Code falls in Chapter XII of the Code, which pertains to the "information given to the Police and their powers to investigate". Section 154 of the Code deals with "information in cognizable offences", where Police are required to register the offence when any information relating to commission of cognizable offence is given orally or in writing; whereas, Section 155 of the Code deals with "Information Relating to Non-Cognizable Offence". As per Section 155(1) of the Code, whenever the information as to non-cognizable offence is given, then, the Police Officer cannot investigate into the same without the order of the Magistrate, having power to try such case or commit such case for trial. Much emphasis is led by learned Senior Counsel for the Petitioner on the provisions of Section 155(1) of the Code to submit that, if the offence is non-cognizable, then, even the authorities under the....
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.... of PML Act further makes the position clear by stating that, "the provisions of the Code shall apply, only if they are not inconsistent with the provisions of PML Act, even as regards arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under the PML Act". 129. Therefore, if PML Act contains certain provisions relating to arrest, then, the PML Act being a complete Code in itself and also being a special law enacted with a particular object, in view of Section 5 of the Code, the provisions of PML Act will prevail and will have overriding effect on the provisions of the Code. The provisions of the Code will apply, only if they are not inconsistent with the provisions of PML Act. 130. Now the definition of the term 'investigation' as given in Section 2 (na) of the PML Act includes all the proceedings under the Act conducted by the Director by an Authority Authorised by the Central Government under this Act for the collection of evidence. Thus, investigation under this Act does not given any role to the Police. It is to be conducted by the Authorities under the Act. Hence as far as investigation is concerned, there is n....
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....under the PML Act should have followed the procedure laid down in Chapter XII of the Code, which is meant for Police Officers, to be followed in respect of the information's received by them. 133. Section 19(1) of the PML Act, at the cost of repetition, it has to be stated that, does not contemplate lodging of complaint before effecting arrest. It only contemplates the reason to believe, which should be on the basis of material in possession. Here in the case, there was ample material in possession of the arresting authority, on the basis of which there was reason to believe that the Petitioner has been guilty of an offence punishable under Section 4 read with Section 3 of the PML Act. It is not controverted that after the arrest, the copy of the order, along with the material in possession, was forwarded to the executing authority in a sealed envelope and, as stated above, it is also not disputed that immediately on the next day, the Petitioner was produced before the Special Court. 134. In the instant case, what is pertinent to note is that the Rules framed under PML Act, in detail, lay down the procedure to be followed when the arrest is to be effected under Section 19 o....
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....asons by both the Courts. 137. As regards the reliance placed by learned Senior Counsel for the Petitioner on the landmark decision of the Hon'ble Apex Court in the case of Lalita Kumari (supra), it is also pertinent to note that the important issue, which was raised for consideration in the said decision, was, "whether a Police Officer is bound to register an FIR upon receiving any information relating to commission of a cognizable offence under Section 154 of Cr.P.C. or the Police Officer has the power to conduct a preliminary inquiry in order to test the veracity of such information before registering the same?" Therefore, it is apparent that the issue raised before the Constitutional Bench of the Hon'ble Apex Court in this Judgment was totally different, which pertained to the bounden duty of the Police Officer of registration of the FIR on receipt of the information of cognizable offence and in that context, in paragraph No. 120 of its Judgment, it was laid down by the Hon'ble Supreme Court that, "the registration of FIR is mandatory under Section 154 of the Code, if information discloses commission of cognizable offence and no preliminary inquiry is permissible ....
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.... Central Excise Act, 1944, which read follows :- "13. Power to Arrest - (1) Any Central Excise Officer not below the rank of Inspector of Central Excise may, with the prior approval of the Commissioner of Central Excise may, arrest any person whom he has reason to believe to be liable to punishment under this Act or the Rules made thereunder." 18. Searches and Arrests How to be Made - All searches made under this Act or any Rule made thereunder and all arrests made under this Act shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating respectively to searches and arrests made under that Code." 19. Disposal of Persons Arrested - Every person arrested under this Act shall be forwarded without delay to the nearest Central Excise Officer empowered to send persons so arrested to a Magistrate, or, if there is no such Central Excise Officer within a reasonable distance, to the officer-in-charge of the nearest police station." 20. Procedure to be followed by officer-in-charge of police station.- The officer-in-charge of a police station to whom any person is forwarded under Section 19 shall either admit him to bai....
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....of the Code, investigation cannot be commenced or a person cannot be arrested without a warrant for such arrest. In the light thereof, the provisions of Section 41 of the Code, wherein the Police Officer cannot arrest without an order from the Magistrate and without a warrant, were dealt with. In this context, it was held, in paragraph No. 41, that, "in respect of a non-cognizable offence, a Police Officer and, in the instant case, an Excise Officer, will have no authority to make arrest without obtaining a warrant for the said purpose. The same provision is contained in Section 41 of the Code, which specifies that, when a Police Officer may arrest without an order from a Magistrate and without a warrant, having regard to the specific provisions of Section 18 of the Central Excise Act, 1944, which mandated that all arrests made under the said Act shall be carried out in accordance with the provisions of the Code." 143. It thus needs to be emphasized that in view of Section 9A of the Central Excise Act making all the offences under the said Act as non-cognizable and in view of Section 18 of the said Act positively making the provisions of the Code relating to arrest being made app....
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....he Central Excise Act, 1944, is not appearing and is conspicuous by its absence in PML Act, then, one has to go by the provisions of the PML Act only, as Section 71 thereof is giving overriding effect to the said provisions. Section 19 of the PML Act, as stated above, does not contemplate at all the procedure, as laid down in Sections 18 to 21 of the Central Excise Act, 1944. The only two conditions contemplated under Section 19 of PML Act, being the reasonable belief, based on the material in possession of the authorized officer, on the satisfaction of which the authorized officer can arrest. In such situation, importing the provisions of the Central Excise Act, 1944 or Customs Act, 1962 in PML Act, would be reading something which is not there in the Statute itself. Such interpretation, therefore, cannot be accepted. In our considered opinion, therefore, this Judgment in the case of Om Prakash (supra) cannot be of any avail to the Petitioner, as, in the first place, it deals with the question, "whether the offences under the Customs Act, 1962 and Central Excise Act, 1944, are bailable or not?", and, secondly, the provisions of Customs Act, 1962 and Central Excise Act, 1944, are t....
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....ink that the decision in Om Prakash's case would help the petitioner to contend that in a customs case it is necessary to register a FIR and after investigation, a final report should be filed under Section 173(2) of Cr.P.C. In the present case, the offence is a cognizable offence. At the time when the decision in Om Prakash's case was rendered, an offence under the Customs Act was not cognizable. So also, categorisation of cases which are non-bailable and cases which are bailable was not there before the amendment of Section 104 by Act 23 of 2012 and Act 17 of 2013. We do not think that the decision in Om Prakash's case would apply to the facts of the present case." 74. The Madhya Pradesh High Court, in the case of Vijay Madanlal Choudhary v. Union of India, reported in 2015 SCC Online M.P. 7466, observed in paragraph 14 as under : "Learned counsel for the petitioner has placed reliance upon the judgment of the Supreme Court in the matter of Om Prakash and another v. Union of India and another, reported in (2011) 14 SCC 1, in support of his submission that the offences under PMLA are non-cognizable offences but in the case of Om Prakash (supra) the Supreme Court considering the....
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....r the FERA being non-cognizable, be taken to be bailable keeping in view the main objective of the Act, never putting emphasis on the prosecution, rather emphasis is over the regulation of the Foreign Exchange and, thereby, the offence being held to be bailable keeping in view that in a similar situation, the offences under the Central Excise Act and the Custom Act, have been declared to be bailable by the Hon'ble Supreme Court in a case of Om Prakash and others) (supra)." 76. A Division Bench of the Bombay High Court, in the case of Intelligence Officer, DRI v. Amjad Huseein Khan and another, reported in 2003 (3) MhLJ 954, has drawn a fine distinction between the scheme of Section 108 of the Customs Act and Section 67 of the NDPS Act. We should look into the observations of the Bombay High Court as regards the difference between the two schemes : "13. The question is whether in the present case by virtue of issuing summons in the above form the respondent-accused was called upon to give evidence against himself. No doubt, there is a different between the scheme of Section 108 of the Customs Act and Sections 67 of the NDPS Act. While under the Customs Act, the Customs Office....
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....n the officer is duty bound under Section 57 of the NDPS Act to make full report of all the particulars of arrest and seizure to his immediate official superior. It is only after the full investigation is made, that the complaint is lodged before the Special Court by the empowered officer who is not a police officer. Looking to scheme of the NDPS Act and the powers of DRI officers it is clear that the summons was issued only for the purpose of making an inquiry. The said inquiry was being made before the complaint was filed and the inquiry was being made from a person who was not "an accused" at the said time and therefore the confessional statement of such a person recorded during such inquiry cannot be said to be hit by Article 20(3) of the Constitution. It cannot be said that by the DRI officers issuing such a summons, the respondent was called upon to give evidence against himself." 77. The only idea with which we have referred to a Division Bench decision of the Bombay High Court drawing a fine distinction between the scheme of Section 108 of the Customs Act and Section 67 of the NDPS Act is to meet with the vociferous submissions of Mr.Pandya as regards the admissibility of ....
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....nancing, Coastal Security, Fake Indian Currency Notes, etc. 81. The DRI is the major intelligence agency which enforces the prohibition of the smuggling of items including drugs, gold, diamonds, electronics, foreign currency, and counterfeit Indian currency. The Directorate of Revenue Intelligence functions under the Central Board of Indirect Taxes and Customs in the Ministry of Finance, Department of Revenue, Government Of India. Headed by the Director General (Chief Commissioner Rank) in New Delhi, it is divided into seven zones, each under the charge of an Additional Director General (Commissioner Rank). It is further sub-divided into Regional Units, Sub- Regional Units and Intelligence Cells with a complement of Additional Directors, Joint Directors, Deputy Directors, Assistant Directors, Senior Intelligence Officers and Intelligence Officers. 82. The Customs Act, 1962, came to be enacted as a special Act by the Parliament of India on 13th December 1962 and has, thereafter, by way of various amendment Acts, acquired its true status by being a special Act as it stands today. The Act empowers the officers of the Customs by terming them as 'Proper Officers', duly appoint....
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....sment in the jurisdiction area is competent to issue a notice for the demand of duty as a proper officer. As such the Commissioner of Customs (Preventive) who has not been assigned the function of a "proper officer" for the purposes of assessment or re-assessment of duty and issue of Show Cause Notice to demand customs duty under Section 17 read with Section 28 of the Act in respect of goods entered for home consumption is not competent to function as a proper officer which has not been the legislative intent. 2. In view of the above the Show Cause Notices issued over the time by the Customs Officers such as those of the Commissionerates of Customs (Preventive), Directorate General of Revenue Intelligence and others, who were not specifically assigned the functions of assessment and re-assessment of customs duty may be construed as invalid. The result would be huge loss of revenue to the exchequer and disruption in the revenue already mobilized in cases already adjudicated. However, having regard to the urgency of the matter, the Government issued notification on 6th July, 2011 specifically declaring certain officers as proper officers for the aforesaid purposes. 3. In the circ....
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.... test contemplated under Section 2(34) of the Act is that of specific conferment of such functions. Revenue's contention that once territorial jurisdiction was conferred, Collector of Customs (Preventive) becomes a "proper officer" in terms of Section 28 of the Act was rejected observing that it would lead to a situation of utter chaos and confusion as all officers of customs, in a particular area would be treated as "proper officers". It was, therefore, held that "in our view, therefore, it is only the officers of the Customs, who are assigned the functions of assessment, which of course, would include the reassessment, working under the jurisdictional Collectorate within whose jurisdiction bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to issue notice under Section 28 of the Act. 10. Our attention was also invited to sub-section (11) of Section 28 of the Customs Act which was introduced by way of an amendment by amending Act, 14 of 2011 with effect from 16-9-2011 to save certain proceedings under Sections 17 and 28 of the Customs Act, which would have otherwise been hit by the rati....
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....ctor/Joint Director and Deputy/Assistant Director of Directorate of Revenue Intelligence have been appointed as officers of Customs with jurisdiction over the whole of India. I further say and submit that in terms of Notification No. 44/2011-Cus. (N.T.) : MANU/CUSN/0099/2011, dated 6-7-2011 the Central Board of Excise and Customs has assigned the functions of the proper officer for the purpose of Section 17 and Section 28 of the Customs Act, 1962 to the Additional Director General, Additional Director/Joint Director and Deputy/Assistant Director of Directorate of Revenue Intelligence. 14. Our attention was drawn to Notifications No. 31 of 1997, dated 7-7-1997, No. 44 of 2011, dated 6-7-2011 and No. 17 of 2002, dated 7-3-2002 to contend that Officers of Revenue Intelligence are considered as Customs Officers and their functions are also properly assigned. 15. Counsel contended that in view of such notifications neither the decision in the case of Sayed Ali (supra) nor the subsequent notification of the Board dated 2-5-2012 would alter the situation. He submitted that notification dated 2-5- 2012 did not rescind the previous notifications, which continue to hold the field. 16. ....
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....It is in this respect that the Supreme Court in the case of Sayed Ali (supra) held that it is only the officers of Customs, who are assigned the functions of assessment working under the jurisdictional of Collectorate/ Commissionerate within whose jurisdiction bills of entry or baggage declaration had been made and the consignment having been cleared will have a jurisdiction to issue notice under Section 28 of the Act. This was a case in which the assessee who was engaged in the business of carpet manufacturing and export was charged with the misuse of the Export Pass Book scheme by selling goods cleared duty free in the open market or selling the pass book in premium in violation of the restrictions imposed on such sale. Investigation was conducted by the Marine and Preventive Wing of the Customs and the Assistant Collector of Customs (Preventive), Mumbai issued a show cause notice alleging violations of provisions of Section 111(d) of the Customs Act. At an appellate stage the Collector (Appeals) though set aside the order passed by the Assistant Collector, granted liberty to the Department to re-adjudicate the case after issuing proper show cause notice. Fresh notice was issued ....
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....ince these officers are retrospectively recognized as 'proper officers' for the purpose of Sections 17 and 28 of the said Act. *** **** *** 5. In this regard it may also be noted that in terms of Notification No. 44/2011 - Customs (N.T.) : MANU/ CUSN/0099/2011, dated 6-7-2011 the officers of DRI and DGCEI are 'proper officers' for the purposes of Section 28. However, it is hereby directed by the Board that these officers shall not exercise authority in terms of clause (8) of Section 28 of the said Act. In other words, there shall be no change in the present practice and officers of DRI and DGCEI shall not adjudicate the show cause notices issued under Section 28 of the said Act. 24. It can be straightaway seen from sub-section (11) of Section 28 of the Board Notification dated 23-9-2011 that sub-section (11) would operate notwithstanding anything contrary to the judgment, decree or order of any Court and all persons appointed as officers of the Customs under sub- section (1) of Section 4 before the 6th day of July, 2011 would be deemed to have always had the power of assessment under Section 17 and should be deemed and always should be considered as proper off....
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....erals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Central Excise Intelligence. 4 Commissioners of Central Excise, Additional Commissioners or Joint Commissioners of Central Excise, Deputy Commissioners or Assistant Commissioners of Central Excise. 28. Notification dated 6-7-2011 provides as under :- S.O. (E) - In exercise of powers conferred by sub- section (34) of Section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby assigns the functions of the proper officer to the following officers mentioned in column (2) of the Table below, for the purposes of Section 17 and Section 28 of the said Act, namely:- Sr.No. Designation of the Officers. 1 2 1 Additional Director Generals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Revenue Intelligence. 2 Commissioners of Customs (Preventive), Additional Commissioners or Joint Commissioners of Customs (Preventive), Deputy Commissioners or Assistant Commissioners of Customs (Preventive). 3 Additional Director Generals, Additional Directors or Joint Direct....
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..... We may recall, in the present case that the show cause notice was issued on 24-1-2013, that is, after the notification dated 6-7-2011. To our mind, therefore, respondent No. 1 had the jurisdiction to issue show cause notice. The show cause notice under sub-section (1) of Section 28 could be issued by a proper officer. A proper officer is one, who is defined in Section 2(34) as the officer of Customs, either by the Board or by the Commissioner of Customs, who is assigned specific functions. Under notification dated 6-7-2011, Joint Director of Revenue Intelligence is assigned the function for the purpose of Sections 17 and 28 of the Customs Act by a specific reference to sub-section 2(34) of the Act. 32. In that view of the matter by the settled position, we cannot hold that respondent No. 1 lacked the jurisdiction to issue a show cause notice. Had this notification not been issued, the question perhaps would be whether under sub- section (17) of Section 28 despite the decision of the Supreme Court in the case of Sayed Ali (supra), the respondent No. 1 could be considered as a proper officer for the purpose of Section 28. However, it is not necessary for us to examine such questi....
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....judication proceedings and subject to outcome thereof. The petitioners had been subjected to certain conditions for provisional release of the goods. At this stage when the conditions were imposed sometime in February, 2012 and the goods were also released, we would not alter such conditions. We would permit the Department to proceed further and conclude the show cause notice proceedings. Subject to the outcome thereof, the deposit, security and bank guarantee of the petitioners be governed. 34. The petitioners have not filed reply to the notice so far. They would have time up to 15-3-2014 to file reply to the show cause notice. 35. We do see a point in contention of the petitioners that the competent authority should finalize the assessment without any further delay. Only thereafter the question of short-levy or non-levy of the duty would arise. The competent authority may take appropriate steps in this regard expeditiously. Subject to above observations, petition is dismissed. Rule is discharged. Interim relief stands vacated." 85. We may note that the above referred decision of this Court has attained finality in view of the fact that no SLP challenging the said judgment ca....
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.... as DRI officers are also Customs officers as seen from the notification dated 8th February, 1963, published in the Gazette and DRI officers have been conferred with the powers specified in Secs.100, 101, 103, 104, 106, 107 and 110 of the Customs Act, 1962. This contention is a favorite contention, which Mr.B.Kumar, learned senior counsel advances in every case and it had been considered in detail by an earlier Division Bench of this Court in S.Peer Mohammed v. State of Tamil Nadu and others, H.C.P.No.800 of 2000, dated 29.9.2000 to which one of us (E.Padmanabhan, J.), was a party. In the said H.C.P., it has been held thus: "16. The learned senior counsel referred to the definition of the 'Proper Officer' as found in Sec.2(34) of the Customs Act as well as Secs.77, 107, 124 of the Customs Act and contended that Directorate of Revenue Intelligence officers who intercepted the detenu are not the Proper Officers and therefore no action could be taken, nor the detenu could be branded as a smuggler. We are not persuaded to sustain the said contention." In the circumstances, while accepting the view taken by the earlier Division Bench, we reject the last of the contentions as....
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....ections 133 to 135 of the Customs Act, 1962. (4) The decision of the Supreme Court in the case of Om Prakash (supra) has no bearing in the case on hand. (5) A DRI Officer is a 'proper officer' for the purposes of the Customs Act, 1962. As the Customs/DRI Officers are not the Police Officers, the statements made to them are not inadmissible under Section 25 of the Evidence Act. (6) A Police Officer, making an investigation of an offence, representing the State, files a report under Section 173 of the Code, becomes the complainant, whereas, the prosecuting agency under the special Acts files a complaint as a complainant, i.e. under Section 137 of the Customs Act. (7) The power to arrest a person by a Customs Officer is statutory in character and should not be interfered with. Section 108 of the Act does not contemplate any Magisterial intervention. The statements recorded under Section 108 of the Customs Act are distinct and different from the statements recorded by the Police Officers during the course of investigation under the Code. (8) The expression 'any person' in Section 104 of the Customs Act includes a person who is suspected or believed to be conce....