TaxTMI 
TaxTMI 
2020 (9) TMI 808
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....Issue Writ of Mandamus or Writ of Prohibition or any other 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 en....
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.... UOI in Crl.M.P. No.10117/2012 in WP (Crl) No.29/2012. (G) Pass any other or further 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 S....
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....respondent no.2 is hell bent upon harassing him, he had no other option but to come before this Court with the present 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 th....
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....the Finance Act, 2003, came into force with effect from 10th May 2013. Section 75 thereof substituted sub-section (6) of Section 104 of the Customs Act, 1962, 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 am....
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....f the officials to invoke the power under the Customs Act, 1962 would be dependent on the cause of action for the evasion of the Customs duty. He would argue that such cause of action so far as the case on hand is 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 thereafte....
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.... therein were non-cognizable. 29. Mr.Vyas would submit that the essential question to be considered in the present case is, whether the Customs Officers/ DRI Officers are police officers and whether they are required to register 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 ....
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....supra) has any bearing in the present case ? (6) Whether the writ-applicant has made out a prima facie case to substantiate his allegation of undue harassment being caused by the DRI officials in the name of investigation ? 35. Before adverting to the rival contentions 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....
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....rested any person under Sub-section (1), he shall, for the purpose of releasing such person on bail or otherwise, have the same powers and be subject to the same provisions as the officer-in-charge of a police station has and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898). (4) Notwithstanding anything contained in the 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 Sectio....
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....corded under Section 108 of the Act. There is no dispute about the fact that the object of recording the statement under Section 108 of the Act is to collect information in relation to the contravention of the provisions of the Act. These proceedings are judicial proceedings and the inquiry contemplated therein is only for the purpose of preventing the contravention 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 feasibl....
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....e premise that such statement could be used against him. The said requirement is included in the provision for the purpose of enabling the Gazetted Officer to elicit the truth from the persons interrogated. Therefore, the challenge on the ground of violation of Article 20(3) is equally untenable. Support can also be derived from the decision of the Hon'ble Supreme 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....
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....sed under the Act. The Customs Officer does not exercise, when enquiring into a suspected infringement of the Sea Customs Act powers of investigation which a police officer may in investigating the commission of an offence. He is invested with the power to enquire into infringements of the Act primarily for the purpose of adjudicating forfeiture and penalty. He has no power to investigate 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 i....
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.... offence punishable at a trial before a Magistrate. ................... 23. .......... The Customs Act 52 of 1962 invests the Customs Officer with the power to search a person and to arrest him, to search premises, to stop and search conveyances, and to examine persons, and also with the power to summon persons, to give evidence and to produce documents and (SIC) seizure of goods, documents and things which are 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 Assistan....
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....ence committed under the special statute. The argument that a Central Excise Officer under Section 21(2) of the Central Excise Act had all the powers of an officer-in-charge of a police station under Chapter XIV of the Code and therefore he must be considered to be a police officer within the meaning of those words in Sec. 25 of the Evidence Act was repelled for the reason that though such officer had the power of an officer-in-charge of a police station 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....
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....nce representing the State files a report under Section 173 of the Code and becomes the complaint whereas the prosecuting agency under the special Acts files a complaint as a complainant i.e. under Section 61(ii) in the case of FERA and under Section 137 of the Customs Act. To say differently, the police officer after consummation of the investigation files a report under Section 173 of the Code upon which the Magistrate may take cognizance of any offence disclosed in the report 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 w....
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.... all the truth concerning the incident. It was also held that the statements recorded under Section 108 of the Customs Act are distinct and different from the statements recorded by police officers during the course of investigation under the Code. The Supreme Court followed the decisions in Ramesh Chandra Mehta v, The State of West Bengal, AIR 1970 SC 940, and Assistant Collector of Central Excise, Rajamundry v. Duncan Agro Industries Ltd., (2000)7 SCC 53). 52. This Court, in Bhavin Impex Pvt. Ltd. v. State of Gujarat, 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....
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....n a combined reading of Sections 13 and 14, it is clear that an officer of the Central Excise is not a mere police officer. He is different. He is even more. A substantive power to arrest has been conferred on him under Section 13. The proceedings conducted by him are judicial. The person who is interrogated is bound to state the truth. 16. The main argument of the counsel for the petitioners was that despite the provisions of Section 9, it has been provided in Section 9A that the offences "shall be deemed to be non- cognizable ...." Section 18 requires that arrest 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 ....
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....rving that the Customs officer is not primarily concerned with the detection and punishment of crime committed by a person, but is mainly interested in the detection and prevention of smuggling of goods and safeguarding the recovery of customs duties and that he is more concerned with the goods and customs duty than with the offender, held that the duties of the Customs officers are very much different from those of the Police officers, and therefore, Section 25 of the Evidence Act cannot apply to the statements recorded by them. The ratio of this decision is that though a Customs officer 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 Cr....
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....ne is that the Excise officer does not exercise any judicial powers just as the Customs officer does under the Sea Customs Act, 1878. Secondly, the Customs officer is not deemed to be an officer in charge of a police station and therefore, can exercise no powers under the Code of Criminal Procedure and certainly not those of an officer in charge of a police Station." 58. His Lordship points out that though the officers under the Sea Customs Act have some powers analogous to those of the police officers under the Code, yet they are not identical with those of the police officers as they are not 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....
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....tion 104 of the Customs Act, 1962 which contains the power of arrest. Section 104 is equivalent to Sections 173 to 175 of the old Act. Under those sections if a reasonable suspicion existed against any person that he was guilty of an offence under that Act, he could be arrested in any place by any officer of the Customs or other person duly employed for the prevention of smuggling. Under Section 174 of the old Act every person arrested had forthwith to be taken before the nearest Magistrate or Customs Collector. If he was taken to a Magistrate, then the Magistrate under Section 175 could direct him to 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 1....
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....es that the statement must be made to a Police officer in an investigation under the said Chapter. Section 4(2) of the Code which provides that offences under other laws shall be investigated under the Code, is subject to the qualification 'subject to any enactment for the time being in force regulating the manner or place of investigating inquiring into, trying or otherwise dealing with such offence'. In our view, the Customs Act, 1962, is such an enactment which has provided its own procedure for investigating into the offences committed under it and the provisions of Chapter 12 of the Code, therefore, 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 de....
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....in respect of offences against other laws, that is to say, laws other than Indian Penal Code, an offence punishable with imprisonment for a period of three years and upwards but not exceeding seven years is also classified as non-bailable. So also by virtue of Entry No.2 an offence punishable with imprisonment for a period of three years and upwards but not exceeding seven years is also classified as non-bailable. An offence under Section 135 of the Customs Act is in any event punishable with imprisonment of three years and upwards but not exceeding three years. Regardless of the value of goods in any event the offence is punishable with imprisonment for three 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, th....
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....s no power to investigate 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 the competent Magistrate. (iii) The expression 'any person' includes a person who is suspected or believed to be concerned in the smuggling of goods. But a person arrested by a Customs Officer because he is found in possession of smuggled goods or on suspicion that he is concerned in smuggling goods is not when called upon by the Customs Officer to make a statement or to produce a document or thing, a person accused of an offence within the meaning of Article 20 (3) 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 per....
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....main object of having the police. The powers of the customs officers are really not for such purpose and are meant for checking the smuggling of goods and due realization of customs duties and determining the action to be taken in the interest of the revenue of the country by way of confiscation of goods of which no duty has been paid and by imposing penalties and fine. OM PRAKASH'S CASE : 68. We shall now look into the decision of the Supreme Court in the case of Om Prakash (supra). A three Judge Bench of the Supreme Court, considering the distinction between the offences punishable under the Indian Penal Code and that under the Central Excise Act, 1944, and the Customs Act, 1962, held as under : "16. 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 res....
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.... whether such offences are bailable ? In order to answer the said question, it would be necessary to first of all look into the provisions of the said Act on the said question. 37. Sub-section (1) of Section 9-A, which has been extracted hereinbefore, states in completely unambiguous terms that notwithstanding anything contained in the Code of Criminal Procedure, offences under Section 9 shall be deemed to be non- cognizable within the meaning of that Code. There is, therefore, no scope to hold otherwise. It is in the said context that we will have to consider the submissions made by Mr.Rohatgi that since all offences under Section 9 are to be deemed to be non-cognizable within the meaning of the Code of Criminal Procedure, such offences must 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 wi....
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....er the Customs Act are bailable and the officers have the same powers as that of a Police Officer. 71. We take notice of the various decisions of different High Courts explaining the true purport of the ratio of Om Prakash (supra). 72. We have to our advantage a very exhaustive judgment delivered by a Division Bench of the Bombay High Court in the case of Chhagan Chandrakant Bhujbal v. Union of india and others, reported in 2016 SCC Online Bom 9938. The Division Bench of the Bombay High Court was dealing with a matter under the PMLA Act. The Bombay High Court considered the decision of Om Prakash (supra) and also the question whether the arresting authority under the PMLA Act was required to follow the procedure laid down under Section 155(1) of the Code of 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....
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....the powers of Police in respect of the information received by them about commission of cognizable or non-cognizable offence and, depending thereon, arrest of the concerned accused. The provisions of this Chapter of the Code can be applied to the offences punishable under the provisions of PML Act, only if the provisions in PML Act are silent as regards the investigation and arrest of person, who has been found to be guilty of committing the offences punishable under the PML Act. 128. This is for the reason that of the PML Act gives overriding effect to the provisions of PML Act. Section 71 of the PML Act clearly lays down that, "the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force". Section 65 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 arre....
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....ion 19 of PML Act would be rendered nugatory and that cannot be the intention of the Legislature. The Court cannot make any special provision in the Act as nugatory or in fructuous by giving the interpretation which is not warranted by the Legislature. As a matter of fact, the endeavour of the Court should always be to ensure that the provisions enacted by the Legislature are not rendered nugatory in any way. 132. It is pertinent to note that Section 19 of PML Act, which does not contemplate the compliance with the procedure required to be followed by the Police Officer under Chapter XII of the Code, is not challenged in this Petition, as being ultra vires. In the absence of such challenge raised and in view of the clear provision laid down in Section 19 of PML Act, it cannot be accepted that the officer authorized 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 o....
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....dly be accepted that the arrest or detention of the Petitioner is, in any way, illegal or without jurisdiction, so as to invoke the extra-ordinary writ remedy and that too of a habeas corpus; especially when the writ of habeas corpus is to lie whenever there is reason to believe that the person is in illegal detention; whereas, in the instant case, the Petitioner is arrested and detained for commission of specific offences. His detention is also validated by the order passed by the Special Court and as such, his detention cannot be called as illegal, far remain null and void, so as, for the Constitutional Court to exercise its extra-ordinary powers under writ jurisdiction; especially, when the Petitioner has already approached the competent Special Court and this Court also, for his release on bail and the said relief having been rejected with valid reasons 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....
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....meaning of that Code." 140. In view thereof, it was held that, this "non-obstante clause", with which the Section begins, in very categorical terms, makes it clear that "notwithstanding anything" contained in the Code, offences under Section 9 of Central Excise Act, 1944 would be deemed to be non-cognizable within the meaning of the Code. As against it, in the case of PML Act there is no such section containing positive assertion that the offences under the Act are non-cognizable, notwithstanding anything contained in the Code. There is also no judicial pronouncement to that effect from the Hon'ble Apex Court. As pointed out by learned Senior Counsel for the Petitioner that issue is pending for consideration before the Hon'ble Apex Court. 141. The Hon'ble Apex Court has in this judgment of Omprakash (supra), then also dealt with Sections 13, 18, 19, 20 and 21 of the said 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 beli....
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....e having jurisdiction, and shall make a full report of all the particulars of the case to his official superior." 142. In the light of all these relevant provisions of Section 9A making the offences non-cognizable, notwithstanding anything contained in the Code and Section 18 making it mandatory, as use of the word "shall" denote, that all the arrests made under those Act's shall be carried out in accordance with the provisions of the Code and Section 19 of the said Act providing that the person arrested shall be forwarded to the Officer-in-Charge of nearest Police Station, it was held by the Hon'ble Apex Court that; as all the searches and arrests made under the said Act has to be carried out in accordance with the provisions of the Code, the provision of Section 155 of the Code, which deals with information relating to non-cognizable offences also becomes applicable and hence it was held that in respect of the information relating to non-cognizable offences, in view of Section 155(1) 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, where....
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....Acts also, like, Customs Act, 1962, Central Excise Act, 1944 and in this Petition, the authorities under PML Act also. According to him, in this case, as these provisions of the Code were not followed in effecting the arrest of the Petitioner, arrest of the Petitioner is illegal. 145. However, in our considered opinion, this line of argument is misconceived as in the PML Act, there is no such provision, like Section 18 of the Central Excise Act, 1944, laying down that arrest under PML Act shall be carried out in accordance with the provisions of the Code. The conspicuous absence of such provision like Section 18 of the Central Excise Act, 1944 in PML Act, is a very relevant aspect for deciding the issue, 'whether the authorities under the PML Act, like the authorities under the Customs Act, 1962 and Central Excise Act, 1944, are also bound by the provisions of the Code relating to arrest and investigation?' 146. In our considered opinion, therefore, once it is held that such provision like Section 18 of the 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 ....
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....e provided in sub-section (6), all other offences under the Act shall be bailable. Since there was no provision in Section 104 of the Customs Act as to whether the offences are bailable or not, that question was considered by the Supreme Court in Om Prakash's case and it was held that the offences under the Customs Act are bailable. Sub-section (4) of Section 104 of the Customs Act was substituted by Act 23 of 2012. Before the substitution, sub-section (4) of Section 104 read as follows: 'Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898), an offence under this Act shall not be cognizable.' The amended Sub-section (4) make certain categories of offences as cognizable. Relying on Ramesh Chandra Mehta v. The State of West Bengal (AIR 1970 SC 940), it was held that officers under the Customs Act are not police officers. It was also held that since all the offences under the Act are non-cognizable, the Customs Officer will have no authority to make arrest without obtaining a warrant. We do not think that the decision in Om Prakash's case would help the petitioner to contend that in a customs case it is necessary to register ....
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....r non- bailable ? Their Lordships, after having regard to certain provisions of Central Excise Act, 1944, relating to the power to arrest as contained in Section 13; provisions relating to searches and arrest; disposal of persons arrested; procedure to be followed by the Officer In-charge; inquiry how to be made by the Central Excise Officer as contained in Sections 18, 19, 20 and 21 of the Central Excise Act, 1944 and also the provisions contained in Sections 41 and 155 of the Code of Criminal Procedure, were pleased to hold that the punishment though has been prescribed under the Excise Act up to seven years but those have been intended by the legislature to be bailable. On similar analogy. Their Lordships have also held the offences under the Custom Act to be bailable. While holding so, one of the considerations was there that the legislature have made offence under both the Acts, non-cognizable. 11. Thus, the contention, which has been made on behalf of the petitioner in reference to the provisions as contained in Section 62 of the FERA, declaring the offences under the FERA being non-cognizable, be taken to be bailable keeping in view the main objective of the Act, ne....
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....ure, arrest i.e. investigation and prosecution have been given to certain officers mentioned in Section 42 of the NDPS Act if the officer has reason to believe either from personal knowledge or information given by any person that any offence under the provisions of this Act has been committed. The powers of inquiry, investigation and recording a statement under Section 67 of the NDPS Act and to call for information by requiring any person to deliver or produce any document or any thing or examining any person acquainted with the facts and circumstances of the case is also given to an empowered officer referred in Section 42 of the NDPS Act. No doubt, the offences committed under the provisions of this Act are cognizable and the persons involved in such offences can be arrested without warrant from a Magistrate. But on the basis of the information or personal knowledge the empowered officer is given power to inquire and investigate in the matter even before a formal accusation is made against a person or FIR is lodged against him. After the seizure of the contraband and the arrest of the person the officer is duty bound under Section 57 of the NDPS Act to make full report of all th....
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....d by a Director General of the rank of Special Secretary to the Government of India. The agency works to secure India's national and economic security by preventing the outright smuggling of contraband such as firearms, gold, narcotics, fake Indian currency notes, antiques, wildlife and environmental products. Moreover, it also works to prevent the proliferation of black money, trade-based money laundering and commercial frauds. 80. Though its early days were committed to combating the smuggling in of gold, it now addresses a wide and interconnected gamut of narcotics and economic crimes. The DRI enforces provisions of the Customs Act in addition to over 50 other statutes including the NDPS Act, Arms Act, WMD Act etc. The DRI is also a part of the Cabinet Secretariat's National Authority Chemical Weapons Convention, the Special Investigation Team on Black Money, the Task Force on Shell Companies, the Multi Agency Center (MAC) on National Security, the Ministry of Home Affairs/NIA's special wings on Left Wing Extremism Financing, as well as various inter-ministerial committees on Terror Financing, Coastal Security, Fake Indian Currency Notes, etc. 81. The DRI is th....
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....er High Courts had the occasion to deal with the term 'proper officer' and the various powers to be exercised by such officer under the various provisions of the Act. The Parliament, in its wisdom, deemed it appropriate to come up with the Amending Act, 2011, and the objects and reasons of such amendment are as under :- "Statement of Objects and Reasons of Amendment Act 14 of 2011 - The Customs Act, 1962 consolidates and amends the law relating to customs. Clause (34) of Section 2 of the said Act defines the expression "proper officer" in relating to the functions under the said Act to mean the officer of customs who is assigned those functions by the Central Board of Excise and Customs or the Commissioner of Customs. Recently, a question has arisen as to whether the Commissioner of Customs (Preventive) is competent to exercise and discharge the powers of a proper officer for issue of a notice for demand of duty. The Hon'ble Supreme Court of India in Commr. of Customs v. Sayed Ali, (2011) 3 SCC 537 held that only a customs officer who has been specifically assigned the duties of assessment and re-assessment in the jurisdiction area is competent to issue a notic....
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....' vis-a-vis Sections 17, 18 and 28 of the Act. Reliance was placed on the case of Sayed Ali (supra). While dealing with the other contentions, a Division Bench of this Court held that - "8. Counsel submitted that since respondent no.1 was not a proper officer in terms of section 2(34) of the Customs Act, he had no authority to issue notice under section 28 of the said Act. 9. Heavy reliance was placed on the decision of the Apex Court in the case of Commissioner of Customs v. Sayed Ali reported in MANU/SC/0125/2011 : 2011 (265) E.L.T. 17 (S.C.), wherein in the context of the definition of proper officer under Section 2(34) of the Customs Act, the Apex Court held and observed that it is only such a customs officer, who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been effected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act would be competent to issue notice under Section 28. It was observed that any other reading of Section 28 would render the provisions of Section 2(34) of Act otiose inasmuch as the test contemplated under Sec....
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....ereof. 12. Reliance was placed on the decision of the Apex Court, in the case of Raza Textiles Ltd. v. Income-tax Officer, Rampur reported in MANU/SC/0333/1972 : (1973) 87 ITR 539 to contend that when the jurisdictional fact is lacking the action of the authority of issuing notice and assuming jurisdiction would be rendered invalid. 13. On the other hand, learned counsel Mr. Hriday Buch for the respondents opposed the petition challenging that the show cause notice has been issued by a proper officer, who had been vested with the powers by virtue of series of notifications issued by C.B.E. & C. Our attention was drawn to the affidavit-in-reply filed by Dr. Arvind Kumar, Deputy Director of Revenue Intelligence dated 4-4-2013 in which following averments have been made:- 6. Without prejudice to the aforesaid contentions, it is submitted that in terms of Notification No. 31/97-Cus. (N.T.), dated 7-7-1997 the Central Government has appointed all the officers of the Directorate of Revenue Intelligence as officers of Customs. Further in terms of Notification No. 17/2002-Cus. (N.T.) : MANU/CUSN/ 0053/2002, dated 7-3-2002 the Additional Director General, Addition....
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.... levied or short-levied or erroneously refunded. It provides for a complete mechanism for recovery of duties not levied, short- levied or erroneously refunded or any interest has not been paid, part paid or erroneously refunded, in which case proper officer shall serve a notice on the person chargeable with the duty or interest requiring to show cause why he should not pay the amount specified in the notice. The period of limitation prescribed for issuance of the notice is one year in normal cases and extended period in cases of collusion, willful misstatement or suppression of facts is 5 years. 19. The question of proper officer, therefore, assumes considerable significance since it is only the proper officer, who under sub-section (1) of Section 28, can issue such a show cause notice. 20. We have noticed that under sub-section (34) of Section 2 a proper officer is defined as a person in relation to any function to be performed under the Act to mean the officer of customs who is assigned those functions by the Board or Commissioner of Customs. Thus, the proper officer is a person, who has been assigned functions by the Board or by the Commissioner of Customs in r....
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....before the sixth day of July, 2011 shall be deemed to have and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section. 23. In the circular dated 23-9-2011 the Board in connection with newly added sub-section (11) of Section 28 clarified as under: *** **** *** 2. Further, as a prospective remedial measure, in terms of Section 2(34) of the Act, 1962, the Board issued Notification No. 44/2011-Customs (N.T.) : MANU/CUSN/0099/2011, dated 6-7-2011. By virtue of this notification, officers of Directorate General of Revenue Intelligence (DRI), Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence (DGCEI) and Central Excise Commissionerates were assigned the functions of the 'proper officer' for the purposes of Sections 17 and 28 of the said Act. *** **** *** 4. Accordingly, as per the amended Section 28 of the Customs Act, 1962, show cause notices issued prior to 6-7-2011 by officers of Customs, which would include officers of Commissionerates of Customs (Preventive), Directorate General of Revenue....
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....s port, Customs airport, Land-Customs station, Coastal port, Customs preventive post, Customs Intelligence post or a Customs warehouse. 3. Superintendents, and Inspectors of Central Excise Department in any place in India. 4. All Officers of the Directorate of Revenue Intelligence. 5. All Officers of the Narcotics Control Bureau. 6. All Intelligence Officers of the Central Economic Intelligence Bureau. 27. Under notification dated 7-3-2002, the Government of India appointed officers mentioned in column No. 2 of the table, notification dated 7-3-2002 provided as under:- S.O. (E). - In exercise of the 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 Intell....
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....ntral Excise Intelligence (i) Section 37;(ii) Section 100; (iii) Section 103; (iv) Section 106; (v) Section 106A; (vi) Sub-sections (1) and (3) of Section 110; (viii) Section 144; and (ix) Section 145. 30. We agree with the counsel for the petitioners that under notification dated 2-5-2012, the officers of DRI have not been assigned specific function of adjudication under Section 28 of the Customs Act. So much is amply clear from the portion of the notification reproduced hereinabove. The question, however, is whether by virtue of the notifications dated 7-7-1997, 7-3-2002 and 6-7-2011, the DRI would have the authority to act under Section 28 of the Customs Act and whether by virtue of the judgment of the Supreme Court in the case of Sayed Ali (supra), this position would be altered. As we have already noticed in the notification dated 7-7-1997, all the officers of the Directorate of Revenue Intelligence are appointed as the officers of the Customs. Under the notification dated 7-3-2002, the officers of DRI have been given jurisdiction over the whole of India. Most significant notification is one of 6-7-2011. As noted, the notification, for the purpose of Section 2(34) ....
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....nd 28 of the Act, his action of issuing show cause notice after the said date in particular cannot be seen as one without jurisdiction. We have noticed that in the clarification issued by C.B.E. & C. on 23-9-2011 it is specified that these officers "DRI and Preventive Wing" would continue the practice of not adjudicating the show cause notice issued under Section 28 of the Act. It was perhaps because of this that having issued show cause notice, the said authority placed the adjudication proceedings before the competent Customs officer at Mumbai for adjudication. 33. Before concluding, we may notice that the Bombay High Court in the case of Commissioner of Customs (Import) v. Electron Textile Exports (P) Limited and Another dated 14- 6-2006 confirmed the view of the Special Bench of the Tribunal. In case of Konia Trading Co. v. Commissioner of Customs, Jaipur reported in MANU/CE/0423/ 2004 : 2004 (170) E.L.T. 51, the Tribunal had held that the DRI authorities would have jurisdiction to issue show cause notice and also adjudicate the proceedings under Section 28. However, much water has flown since then, in particular, the decision of the Supreme Court in the case of Sayed ....
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....-section (5) and the proviso. The same is reproduced herein below for the ready reference. "(5) Where the proper officer, during any proceedings under the Act, is of the opinion that for the purposes of protecting the interest of revenue or preventing smuggling, it is necessary so to do, he may, with the approval of the Principal Commissioner of Customs or Commissioner of Customs, by order in writing, provisionally attach any bank account for a period not exceeding six months : Provided that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform such extension of time to the person whose bank account is provisionally attached, before the expiry of the period so specified." 88. We also have to our advantage a Division Bench decision of the Madras High Court in the case of Vasantha (in the matter of detenu : Krishnan Govindaraj) v. State of Tamil Nadu, represented by Secretary to Government Public (S.C.) Department, Fort St.George, Chennai, wherein the court held as under : "It was further contended that the DRI officers are th....
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....f the fact that the writ-applicant has, in the past, attended the DRI office at Vapi and his statements have also been recorded. We may only observe that if no further inquiry is necessary, then the writ- applicant may not be unnecessarily called at the office of the DRI at Vapi for the purpose of inquiry. FINAL CONCLUSION : 92. We sum-up our final conclusions as under : (1) Any person can be arrested for any offence under the Customs Act, 1962, by the Customs Officer, if such officer has reasons to believe that such person has committed an offence punishable under Section 132 or Section 133 or Section 135 or Section 135A or Section 136 of the Customs Act, 1962, and in such circumstances, the Customs Officer is not obliged to follow the dictum of the Supreme Court as laid in the case of Lalitha Kumari (supra). (2) When any person is arrested by an officer of the Customs, in exercise of his powers under Section 104 of the Customs Act, 1962, the officer effecting the arrest is not obliged in law to comply with the provisions of Sections 154 to 157 of the Code of Criminal Procedure, 1973. The officer of the Customs, after arresting such person, has to inform th....