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2024 (10) TMI 316
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....itutional validity of Sections 104, 105 and 108 of the Customs Act, 1962 (hereinafter referred to as "the Act of 1962") by declaring them unconstitutional and violative of the fundamental rights and other constitutional provisions. The petitioners also sought quashment of the proceedings initiated by respondents against them by invoking the powers of summoning/search and arrest as illegal & void; and also quashment of search & seizure carried out in their business premises on 14/15.05/2024 as well as the summons dated 15.05.2024. 3) The petitioners-Om Prakash and Deepak Soni are the Proprietors of M/s Sudarshan Jewellers and M/s New Sukirti Jewellers respectively. The business premises of the petitioners were searched by the DRI Officers on 14/15.05.2024. The various materials were seized in pursuance of seizure operations and the premises were sealed. Such search and seizure was done consequent to the information received from one A. Tripathi, who was arrested for alleged smuggling of gold weighing 1503 grams. That accused A. Tripathi in his statement claimed that the gold belongs to either Om Prakash Soni or Deepak Soni, the present petitioners. In pursuance of search & seizur....
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....vestigation. It is also his submission that the petitioners have attempted to invoke the criminal proceedings by way of filing the anticipatory bail application and this fact has been suppressed by them. The petitioners have invoked alternative proceedings for the same kind of relief by way of filing the present interim applications in the pending writ petitions. According to learned counsel for the respondents, on this ground of concealment of material fact, the stay applications are liable to be dismissed. 8) The prayer in Radhika Aggarwal's case, wherein Hon'ble Supreme Court heard the matter and reserved it for pronouncement of judgment by giving protection to the petitioner therein reads hereunder:- "i. Issue appropriate Writ, Order or Direction(s) holding the investigations into the non-cognizable Offence(s) under Customs Act without seeking order of the Magistrate as per Section 155 Cr.P.C. to be null and void ab initio; and in the alternative to the prayers supra in the event that the offence under the Customs Act are construed to be 'cognizable', it may be held that such offences without recording the FIR and without following the procedure prescribed under Sec....
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.... respect of the investigation (except the power to arrest without warrant) as an officer in charge of a police station may exercise in a cognizable case. (4) Where a case relates to two or more offences of which at least one is cognizable, the case shall be deemed to be a cognizable case, notwithstanding that the other offences are non-cognizable." xxx xxx xxx SCHEDULE-I II - CLASSIFICATION OF OFFENCES AGAINST OTHER LAWS Offence Cognizable or non-cognizable Bailable or non-bailable By what court triable 1 2 3 4 If punishable with death, imprisonment for life, or imprisonment for more than 7 years. Cognizable Non-bailable Court of Session. If punishable with imprisonment for 3 years and upwards but not more than 7 years. Cognizable Non-bailable Magistrate of the first class. If punishable with imprisonment for less than 3 years or with fine only. Non-cognizable Bailable Any Magistrate. 10) A reading of the above provisions clearly show that all the offences, in other laws, punishable with imprisonment for less than 3 years or with fine, are made non-cognizable, bailable and triable by any Ma....
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....l other offences under the Act shall be non-cognizable.] [(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.]" "108. Power to summon persons to give evidence and produce documents.- [(1) Any Gazetted Officer of customs *** shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a d....
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....ling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111 or section 113, as the case may be; or (c) attempts to export any goods which he knows or has reason to believe are liable to confiscation under section 113; or (d) fraudulently avails of or attempts to avail of drawback or any exemption from duty provided under this Act in connection with export of goods, he shall be punishable,- (i) in the case of an offence relating to,- (A) any goods the market price of which exceeds one crore of rupees; or (B) the evasion or attempted evasion of duty exceeding [fifty lakh] of rupees; or (C) such categories of prohibited goods as the Central Government may, by notification in the Official Gazette, specify; or (D) fraudulently availing of or attempting to avail of drawback or any exemption from duty referred to in clause (d), if the amount of drawback or exemption from duty exceeds [fifty lakh] of rupees, with imprisonment for a term which may extend to seven years and with fine: Provided that in the absence o....
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....r the time being in force under this Act or any other law for the time being in force with respect to any goods is or may be evaded, he shall be punishable with imprisonment for a term which may extend to [three years], or with fine, or with both. (2) If any officer of customs,- (a) requires any person to be searched for goods liable to confiscation or any document relating thereto, without having reason to believe that he has such goods or document secreted about his person; or (b) arrests any person without having reason to believe that he has been guilty of an offence punishable under section 135; or (c) searches or authorises any other officer of customs to search any place without having reason to believe that any goods, documents or things of the nature referred to in section 105 are secreted in that place, he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. (3) If any officer of customs, except in the discharge in good faith of his duty as such officer or in compliance with any requisition made under any law for the time be....
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....ted goods or evasion or attempted evasion of duty exceeding fifty lakh rupees. 12) To examine the said issue, it is apt to refer to Section 2 (33) of the Act of 1962, which defines as follows:- "2 (33) "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported, have been complied with." A reading of the aforesaid definition, it is clear that it has two parts. The first part is dealing with absolute prohibition with regard to import and export either under Customs Act or any other law for time being in force. The second part in positive terms say that if the goods are permitted to be imported or exported with certain conditions and if those conditions are complied with, then it would not amount to prohibited goods. Implicitly, the second part makes it clear that if the goods are permitted either to import or export with the certain conditions and if those conditions are not complied with it amounts to prohibited goods. Though these concl....
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....ntry; (s) the compliance of imported goods with any laws which are applicable to similar goods produced or manufactured in India; (t) the prevention of dissemination of documents containing any matter which is likely to prejudicially affect friendly relations with any foreign State or is derogatory to national prestige; (u) the prevention of the contravention of any law for the time being in force; and (v) any other purpose conducive to the interests of the general public. [(3) Any prohibition or restriction or obligation relating to import or export of any goods or class of goods or clearance thereof provided in any other law for the time being in force, or any rule or regulation made or any order or notification issued thereunder, shall be executed under the provisions of that Act only if such prohibition or restriction or obligation is notified under the provisions of this Act, subject to such exceptions, modifications or adaptations as the Central Government deems fit.]" Sub-Section (1) of Section 11 of the Act of 1962 clearly shows that prohibition can be either absolute or subject to certain conditions (to be fulfilled before or....
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....licy). Exim Code Item Description Present Policy Revised Policy Existing Policy Condition Revised Policy Condition 71061000 Powder Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 71069100 Unwrought Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies) Silver dore can be imported by refineries against a licence with AU condition. 71069210 Sheets, plates, strips, tubes and pipes Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 71069290 Other Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 71081100 Powder Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and D....
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....o change in existing Policy Condition 71069110 Unwrought: Grains Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). Silver dore can be imported by refineries against a license with AU condition. No change in existing Policy Condition 71069190 Unwrought: Others 71069210 Sheets, plates, strips, tubes and pipes Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). No change in existing Policy Condition 71069290 Other Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). No change in existing Policy Condition 71081100 Powder Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). No change in existing Policy Condition 71081200 Other unwrought forms Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). Gold dore can be imported by....
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....rmitted by the Government of India to import gold. The said circular was issued under section 10 (4) read with section 11 (i) of the FEMA. (ii) RBI Circular No. 103/2012-13/499, dated May 13, 2013 by the Foreign Exchange Department reiterated that nominated banks/agencies were permitted to import gold on loan basis. (iii) Circular No. 7 by the Exchange Control Department, RBI dated March 6, 1998 whereby certain nominated agencies had been permitted to import gold, viz., MMTC, HHEC, STC, SBI and other agencies authorized by the Reserve Bank for sale of jewellery manufacturers, exporters, NRIs, holders of Special Import Licences and domestic users. There were detailed guidelines for import of gold on loan/credit basis providing for period of loan, rate of interest and quantity besides consignment basis as also outright purchase basis which were issued in terms of section 73(3) of the Foreign Exchange Regulations Act, 1973. (iv) Circular No. 15 RBI/2013-14/148. dated July 22, 2013 issued under section 10 (4) read with section 11 (1) of the FEMA, provided for import of gold for the purposes of exports or to import of gold by units in SEZ exclusively for the p....
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....1992 makes it crystal clear that the importation of gold is restrictive and it was allowed to be imported subject to certain RBI Regulations by particular Bank, Agencies and Special Qualified Jewellers. The Circulars of RBI as noted herein-before would also indicate that importation of gold is not free, it is restricted. This means the gold is not freely brought within the territory of India from any foreign country. However, the same can be subject to certain conditions. 17) The definition of "Prohibited Goods" clearly indicates that prohibition and restriction can be under the Customs Act or it can be under any other law. There is no absolute prohibition of gold either under the Foreign Trade (Development and Regulation) Act, 1992 or Customs Act. The same can be imported with certain restrictions/conditions. If the conditions are complied with then it is not a prohibited goods. If the conditions are not complied with then it amounts to prohibited goods as it is clear from the definition under Section 2 (33) and Section 11 of the Act of 1962 also. 18) In the present case, summons were issued in pursuance of enabling provisions under Section 108 of the Act of 1962, which made....
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....hich reads hereunder:- "15. ..................... Term 'prohibited goods' as defined under section 2 (33) means any goods, the import or export of which is subject to any prohibition under the Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. This definition therefore, comes in two parts. The first part of the definition explains the term 'prohibited goods' as to mean those goods, import or export of which is subject to any prohibition under the law. The second part is exclusionary in nature and excludes from the term 'prohibited goods', in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. From the definition of term 'prohibited goods', in case of goods, import of which is permitted would be excluded subject to satisfaction of the condition that conditions for export have been complied with. By necessary implication therefore in case of goods, import of which is conditional, would fall within the definition ....