TaxTMI 
TaxTMI 
2024 (9) TMI 1029
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....ed search and seizure operation at the premises of the petitioner on 03.03.2023 in relation to the 2012 ECIR and thereafter the petitioner has been summoned since 09.03.2023 in connection with the ECIR, being No. ECIR/14/PAT/2012 and the petitioner duly appeared on all such dates and answered all such questions put to him with best of his knowledge and capabilities. He submitted that the ED further registered ECIR case, being ECIR/RNZO/34/2023 dated 12.12.2023 on the basis of the FIR No. 10 of 2019 dated 20.01.2019, P.S.-Mandu, in the District of Ramgarh (Jharkhand) under Sections 420, 468, 469, 471, 120-B of the Indian Penal Code. He then submitted that the first summon was received by the petitioner in relation to the ECIR of 2023 for his appearance on 04.01.2024 at 10.30 A.M., but the said summon was received by him in the evening of 04.01.2024 through speed post and thereafter another summon was received on 09.03.2024 at 03.30 PM for his appearance on the same date before the Investigating Agency at 10.30 A.M., which has already expired. 4. Mr. Sinha, learned counsel has submitted the Investigating officer along with his team conducted a search and seizure operation at the r....
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....ring for the petitioner has submitted that the various FIRs were registered against Ram Binod Sinha in the year 2010-11 and the scheduled offence of 2nd ECIR is FIR No. 10 of 2019 dated 20.01.2019. He submits that on the basis of the scheduled offence of 1st ECIR, several FIRs were registered against Ram Binod Sinha, the first one is ECIR/PAT/14/2012 dated 18.05.2012, in which, upon summon, he appeared eight times from 09.03.2023 to 05.07.2023. The first search under Section 17 was conducted in ECIR/PAT/14/2012 dated 18.05.2012 at 13 premises /units on 03.03.2023. He submits that 2nd ECIR/RNZO/34/2023 dated 12.12.2023, seven persons were named, in which, it has been alleged that the coal on truck (JH 02AR 6640) was to be delivered to M/s Om Coke Industry, Ramgarh Jharkhand. Proprietor-Ishtiaq Ahmad. The Truck driver namely Saiyyad Sulamani-taking 19.56 MT Coal and that coal was taken from Toppa Colliery to Varanasi Mandi. The truck was intercepted at Hesargarha (100 mts. from Hesargarha Petrol Pump) which is approx. 4.5 Kms. from Toppa Colliery, however, Varanasi is at a distance of 326 Kms. from the intercepted point and Ramgarh is 11km away from intercepted point. He further subm....
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....a Enterprises. Akar Fuels, Falak Fuels, Romaan Fuels were established and started operations. He further submitted that the allegations are made that the entities are non-functional / dummy entities and on conducting a filed enquiry of 13 companies, it was allegedly found that these companies are not operational or merely paper companies or found not functioning for many years, however, in reply to that the petitioner has stated that the aforesaid 13 entities were opened after obtaining valid licenses which were being renewed every year on the basis of various documents, reports and the inspections being carried out by different agencies from time to time. Following are the Steps involved in the establishment/functioning of companies, which are as under:- i. Steps taken for compliance (PAN card, Aadhar, consent to establish. consent to operate, NOC from forest dept. Mining registration form, GST, Mining Registration, factory registration, Udyam portal, IT Return, Audit reports, monthly etc). ii. Documents submitted to JSMDC along with the application. iii. A committee under the supervision of the Mining chairman and JSMDC-verifies and approves yearly allo....
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....shment of the various manufacturing units and the supporting documents which has already before the investigating agency submitted by the petitioner. It is clear that all the manufacturing units were not only established from time to time following the various compliance required under law by different departments but also has been running. The documents referred above include inspections done by different departments in different period of time. The Investigating Agency has not verified the authenticity and correctness of the documents. 12. Learned counsel has submitted that the present scheduled offence i.e. FIR No 10/2019 dated 20.01.2019 on the basis of which the 2nd ECIR bearing number ECIR/RNZO/34/2923 dated 12.12.2023 is confined to seizure of one truck of coal being transported for M/s Om Coke Industries only During the course of investigation, if the investigating agency has come across certain materials from where in its opinion a cognizable offence is made out, then in terms of the judgements passed in Prakash Industries Limited & Anr. Versus Enforcement of Directorate (2023 SCC OnLine Del 336) the said materials are required to be forwarded to the scheduled offence a....
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....y have already been spent during relevant time of consideration by the manufacturing units. The complainant has calculated the sale price on the basis of market rate arrived at during the investigation. No authentic evidence in this regard has been brought on record related to this. The attempt by the complainant to add the purchase price with the sale price instead of subtracting the same to arrive at the alleged proceeds of crime is not understandable. Even according to the Prosecution, taking their figures to be correct to be arguments sake, the alleged PoC cannot be more than Rs. 11 Cr. for 13 entities for the period of 5 years. In case the above-mentioned costing is added there cannot be any profits and hence no Proceeds of crime. 14. It has been further submitted that the prosecution has seized the documents and examined them for a period of 15 years and found 6 discrepancies in registers and vouchers as alleged in Para 7.5.2 of the Prosecution Complaint. The prosecution alleges that the entries in the registers were manipulated as the registration number of the vehicles used for transportation were of two-wheelers and response there, it has been stated in para-19 of the b....
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....ck number is mentioned as JH01AX-5133. It was submitted that in E-way challan and tax invoice truck numbers are correct and human error only in the Register. 15. Learned counsel has submitted that Rizwan Ansari, Arun Pandey, Md Salim and others have clearly evidenced the establishment and running of various manufacturing units. 16. Mr. Sinha, learned counsel appearing for the petitioner has relied upon the several judgments, which are as under:- i. Anil Tuteja and Ors. Vs. The Director, Directorate of Enforcement and Ors. (MANU/CG/0463/2020)-according to section 24 of PMLA. the burden of proof will the on the applicants only after framing of the charge against them." ii. Pankaj Bansal vs Union of India & Ors. (2023 SCC OnLine SC 1244)-Mere non-cooperation of a witness in response to the summons issued under Section 50 of the Act of 2002 would not be enough to render him/her liable to be arrested under Section 19 of the Act. iii. M/s Bharathi Cement Corporation Private Limited vs Directorate of Enforcement (Criminal Revision Case No: 87 of 2021)-"the Special Court trying the offence of money laundering while independently proceeding with the trial, m....
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....lied upon therein are not scheduled offences. Therefore, there cannot be any proceeds of crime... xii. Pankaj Bansal Vs Union of India & Ors. (2023 INSC 866) The ED, mantled with far-reaching powers under the stringent Act of 2002, is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with the highest degree of dispassion and fairness... xiii. Babubhai and Ors. Vs. State of Gujarat and Ors. (MANU/SC/0643/2010)-".... where the version in the second FIR is different and they are in respect of the two different incidents/crimes, the second FIR is permissible. " xiv. Chandra Prakash Khandelwal vs Directorate of Enforcement (Bail Application No 2470/2022- Delhi High Court)- "... What weigh the statements under Section 50 of PMLA would carry at the end of trial cannot be tested at the stage of bail " xv. Preeti Chandra Vs Directorate of Enforcement (Delhi High Court-Bail Application No. 3494/2022) "Hence, prima facie not much reliance can be placed on section 50 statements in view of inconsistency in the statements of Indrajit Zaveri, Amj Malik and Pranav Kumar....." xvi. Vijay Agarwal Through Pa....
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....that offence, cannot be wholly or partly regarded as proceeds of crime within the meaning of Section 2 (1) (u) of the 2002 Act-so long as the whole or some portion of the property has been derived or obtained by any person "as a result of" criminal activity relating to the stated scheduled offence. To be proceeds of crime, therefore, the property must be derived or obtained, directly or indirectly, "as a result of" criminal activity relating to a scheduled offence. To put it differently, the vehicle used in commission of scheduled offence may be attached as property in the concerned case (crime), it may still not be proceeds of crime within the meaning of Section 2 (1) (u) of the 2002 Act. Similarly, possession of unaccounted property acquired by legal means may be actionable for tax violation and yet, will not be regarded as proceeds of crime unless the concerned tax legislation prescribes such violation as an offence and such offence is included in the Schedule of the 2002 Act. For being regarded as proceeds of crime, the property associated with the scheduled offence must have been derived or obtained by a person "as a result of" criminal activity relating to the concerned sched....
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.... activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression "derived or obtained" is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2 (1) (u) read with Section 3. Taking any other view would be rewriting of ....
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....able No. 7. 20. By way of referring Table No. 9 of the complaint, he submitted that from the said table, it is clearly revealed that the coal purchased by M/s Ola Coke Industries from JSMDC was sold/supplied on the very same day of purchase, in the same quantity and transported by the same truck which means the said coal was not used either as a raw material to processed further into some goods or as a fuel to manufacture something, as same cannot be done on the same day. He submitted that M/s Ola Coke Industries after procuring the subsidized coal from JSMDC to use the same as fuel/ raw material, diverted/supplied the coal in the open market and violated the agreement executed between M/s Ola Coke Industries and M/s JSMDC. He then submitted that in Para-7.5.4 the entities engaged in purchasing coal by the petitioner from JSMDC was found to be non-operational / dummy entities. Low electricity consumption was found in para-7.5.6 of the prosecution complaint and the monthly consumption of the electricity was found to be unbelievably low that also strengthen the case of the Enforcement Directorate. He further submitted that the petitioner has provided forged / manipulated manually ....
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....s gone through the materials available on record and finds that admittedly there are various FIRs against Ram Binod Sinha in the year 2010-11, in which for the scheduled offence so far as the second ECIR is concerned, the FIR No. 10 of 2019 dated 20.01.2019. In the first ECIR, the petitioner was called upon and he has appeared on 18.05.2012 and on 09.03.2023 to 05.07.2023 i.e. eight times and the first search in light of Section 17 of the PML Act in the first ECIR was made on 03.03.2023. Second ECIR was registered on 12.12.2023, in which, 7 persons are named. The coal on truck bearing number JH-02-AR-6640 was to be delivered to M/s Om Coke Industry, Ramgarh, Jharkhand, however, the said truck was intercepted at Hesargarha on the allegation that Saiyyad Sulamani was taking the quantity of 19.56 MT coal from Toppa Colliery to Varanasi Mandi. It was pointed out that Varanasi is at the distance of 326 kms from the intercepted point and the Ramgarh is 11 Kms from the intercepted point. The second search was made on 16.01.2024 and allegations are made that 13 firms are non-operational / non-functional and further allegations are made that even the commission for getting the coal was at t....
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....Anr. Verus Directorate of Enforcement, reported in 2023 SCC OnLine Del 336, as relied by the learned counsel appearing for the petitioner, if during the course of investigation, he has come across certain materials from where in its opinion a cognizable offence is made out, then in terms of the said judgement, the said materials are required to be forwarded to the scheduled offence agency and to be investigated in terms of the scheduled offence committed, as has been held in para-91 of the said judgment, which reads as under:- "91 Turning then to the facts of the present case the Court finds that till date the ED has failed to take any steps as are envisaged under Section 66 (2) of the PMLA. As would be manifest from a reading of sub-section (2) of Section 66 if the Director or other authority on the basis of material in its possession comes to form the opinion that the provisions of any other law in force are contravened, it is obliged to share that information with the concerned agency for necessary action. Section 66 (2) thus fortifies the conclusion of the Court that ED does not stand conferred with any independent power to try offences that may be evidenced or may sta....
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.... 30. During the course of the argument, it has come on the record that total quantity of coal purchased by 13 small and medium enterprises of Ezhar Ansari by JSMDC from October 2018 to March 2023 is 86,568.22 tons and the total amount paid by these 13 small and medium enterprises of Ezhar Ansari for the purchase of the said coal is Rs. 29,50,36,622.79/- and illegal gain is Rs. 41,81,92,136.38/- and it has been alleged that the minimum amount at which, this coal is sold in the open market (price of coal sold through e-auction) at the relevant period is being considered for calculating proceeds of crime) is Rs. 71,32,28,759.17/-. 31. In view of the above, it transpires that the allegations are made that between the period from October, 2018 to March, 2023, 13 entities have purchased the coal for amount of approx. Rs. 29.5 crores and odd and subsequently, the same have been sold in the open market for four years at the market rate, which comes to Rs. 41,81,92,136.38/-. It is further alleged that Rs. 29,50,36,622.79/- and Rs. 41,81,92,136.38/- comes to Rs. Rs. 71,32,28,759.17 approx. and that is the proceeds of crime from the 13 entities. In the said para-8.2, it is clearly stated....
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....urchase' have been used, thus, prima facie it appears that that amount cannot be said to be the subject matter of amount used for the proceeds of crime. 35. Socio economic offences constituted a class apart and need to be visited with different approach in the matter of bail since socio economic offences have deep-rooted conspiracies affecting more fibre of society and causing irreparable harm. Moreover, investing agency was in process of expediting the trial. The reference may be made to the case of Christian Michel James Versus Directorate of Enforcement, reported in 2022 SCC OnLine Del 731, wherein paras-37 and 38 of the said judgment, two judgments of the Hon'ble Supreme Court were considered by the Delhi High Court, which is reproduced hereinbelow:- "37. In respect of the considerations relevant to the grant of bail, this Court deems it profitable to advert to the decision in Anil Kumar Yadav (Supra), where it has been observed as follows:- "17. While granting bail, the relevant considerations are : (i) nature of seriousness of the offence; (ii) character of the evidence and circumstances which are peculiar to the accused; and (i....