Venugopal Engg. (P.) Ltd. And Ors. vs Union Of India (Uoi) And Anr.
2003 Latest Caselaw 879 Bom

JUDGMENT

P.B. Gaikwad, J.

1. Application Nos. 1 to 4 filed present petition under section 482 of Code of Criminal Procedure with a request to quash the criminal proceedings initiated by the respondent No. 2 Assistant Director, Directorate of Revenue Intelligence, i.e. Criminal Case No. 257/S/94, pending before the Chief Metropolitan Magistrate, Esplanade Bombay.

2. So far as jurisdiction in filing petition before this Bench, it is contended in para 25 of the petition that the petitioner Nos. 1 and 2 i.e. firm situated in Aurangabad and Ahmednagar, the petitioner No. 3 resides within the jurisdiction of this Bench and even the registered office of the petitioner Nos. 1 and 2 is at Aurangabad and Ahmednagar, and therefore, it is submitted that the Court has jurisdiction to entertain the said petition.

3. So far as regard, jurisdiction to entertain the present petition is concerned, rule is issued in the said matter on 4-10-1994. Even interim relief as claimed by the petitioner as per prayer Clause (b) is also granted and further proceedings in Criminal Case No. 257/S/1994 are accordingly stayed. In view of the above position and as rule is issued in the said matter, there is no need to reassess whether the Court has jurisdiction to entertain the present petition or not. Therefore, the above petition needs to be decided on merits.

4. A grievance is made by the applicants by filing present application under section 482 of the Code of Criminal Procedure as according to them the dispute related about the classification of the goods and the said classification is duly approved and confirmed by the Custom Appraisal Officer and the Directorate of Revenue Intelligence has no power to classify or re-classify the goods. It is further contended that the matter in respect of classification of goods is pending before the Tribunal known as CEGAT and separate orders are passed in those proceedings on 22-6-1992 and stay is accordingly granted. The petitioners have deposited the amount as directed by the authorities and, therefore, firstly it is contended that the Criminal Complaint is filed by the Assistant Director of Revenue Intelligence and he has no authority to file the complaint. Secondly, it is contended that the dispute so far as regard classification is concerned same is pending before the Tribunal and during the pendency of appeal before the Tribunal, Criminal Complaint being filed, process is issued and, therefore, a request is made to quash the said proceedings as those are not maintainable. Thirdly, according to him, the sanction from the collectorete, which is necessary to prosecute the present petitioner, has not been obtained and, therefore, the proceedings are not maintainable.

5. While giving some other particulars it is contended that the petitioner No. 1 is registered with the Directorate of Industries Ahmednagar and Aurangabad in the year 1990. In the month of January, 1990 order was placed for 3000 kits by the petitioner on the foreign suppliers. Accordingly those kits were imported in 4 lots. The bill of entry assessed to duties and cleared by the petitioners to their warehouse in Aurangabad. On 20-6-1990 goods were seized by the Directorate of Revenue and Intelligence of the respondents and on 29-6-1990 the petitioner paid differential duties of Rs. 1,12,50,000/- as demanded by the authorities and the Directorate of Revenue Intelligence. It is contended that there was a demand of Rs. 4 crores by the said authority to cover the fine and penalty and that too without adjudication. In reply to the show cause notice, by letter dated 10-7-1991 respondent forwarded the documents relied upon by them and the date for personal hearing was also fixed on 26-7-1991. Order is accordingly passed on 30-7-1991. Said order is being challenged by filing appeal before CEGAT. On 13-2-1992 application for stay filed by the present petitioners is disposed of directing the petitioners to deposit 5 lakhs and bank guarantee. It is contended that when the proceedings are pending before the Appellate Court there was no justification in filing criminal complaint on 27-4-1994 by the respondent No. 2. Thus, it is requested to quash the proceedings.

6. Notice was given to other side, I accordingly heard Shri A.S. Bajaj Advocate for the petitioners and Shri Godhamgaonkar Senior Standing Counsel for the respondent No. 2, at length.

7. It is submitted by Shri Bajaj Advocate that during the pendency of the present proceedings appeal filed by the present petitioner is partly allowed and matter is remanded to the adjudication authority and direction is given to reconsider the aspect so far as classification of goods and confiscation is concerned, the authority has reconsidered. So far as penalty is concerned, the authority have finally concluded that same can not be imposed. He further submits that in view of the above position and when the matter is taken before the concerned authority so far as classification of the goods and confiscation of the goods is concerned, same is pending and, therefore, prosecution against the petition is not justified.

8. As present application being filed under section 482 of the Criminal Procedure Code, to quash the proceedings, it is necessary to consider the scope of section 482 of the Criminal Procedure Code. On perusal of the section 482 of the Cri.P.C. It is apparently clear that the principles governing exercise of inherent powers are to be exercised to do the real and substantial justice. Those powers are to be exercised sparingly to prevent abuse of process of any Court or otherwise to secure ends of justice and the power not to be resorted to if there is specific provision in the Code for redress of grievance of aggrieved party and it should not be exercised as against the express bar of law engrafted in any other provision of the Code. The inherent powers are to be exercised to correct patent illegalities and the expressions "ends of justice" and "to prevent abuse of process of any Court" are intended to work both ways either when an innocent person is injustifiably subjected to an undeserving prosecution or if an ex facie well merited prosecution is throttled at the threshold without allowing the material in support of it. So far as the exercise of powers under section 482 at the stage of investigation or initial stage the High Court being a highest Court of a State should normally refrain from giving a premature decision in a case where the entire facts are extremely incomplete and hazy, more so when evidence has not been collected and produced before the Court and the issues involved whether factual or legal are of great magnitude and cannot be seen in their true perspective without sufficient material. A reference in this respect is necessary to one authority i.e. in the case of State of Haryana v. Bhajanlal, wherein certain parameters are given in exercise of powers under section 482 of Cri.P.C.

"F.I.R. and investigation quashing of, in exercise of extraordinary power under Article 226 of inherent powers under section 482 Cri.P.C. "Guidelines regarding allegations in complaint clearly constituting cognizable offence-quashing of F.I.R. not justified.

In the following categories of cases, the High Court may in exercise of powers under Article 226 or under section 482 of Cri.P.C. may interfere in proceedings relating to cognizable offences to prevent abuse of the process of any Court or otherwise to secure the ends of justice. However, power should be exercised sparingly and that too in the rarest of rare cases.

1) Where the allegations made in the first information report of the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence of make out a case against the accused.

2) Where the allegations in the first information report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by Police Officers under section 156(1) of the Code except under an order of a Magistrate within the purview of section 155(2) of the Code.

3) Where the uncontroverted allegations made in the F.I.R. or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

4) Where the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a Police Officer without an order of a Magistrate as contemplated under section 155(2) of the Code.

5) Where the allegations made in the F.I.R. or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceedings is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.

Where allegations in the complaint did constitute a cognizable offence justifying registration of a case and investigation thereon and did not fall in any of the categories of cases enumerated above, calling for exercise of extraordinary powers or inherent powers, quashing of F.I.R. was not justified."

A reference is also necessary to one another authority i.e. in the case of State of Bihar v. Murad Ali Khan and others, , wherein it is observed to the following effect.

"It is trite that jurisdiction under section 482 Cri.P.C. which saves the inherent power of the High Court, to make such orders as may be necessary to prevent abuse of the process of any Court or otherwise to secure the ends of justice, has to be exercised sparingly and with circumspection. In exercising that jurisdiction the High Court would not embark upon an enquiry whether the allegations in the complaint are likely to be established by evidence or not. That is the function of the trial Magistrate when the evidence comes before him. Though it is neither possible nor advisable to lay down any inflexible Rules to regulate that jurisdiction, one thing, however, appears clear and it is that when the High Court is called upon to exercise this jurisdiction to quash a proceeding at the stage of the Magistrate taking cognizance of an offence the High Court is guided by the allegations, whether those allegations, set out in the complaint or the charge-sheet, do not in law constitute or spell out any offence and that resort to criminal proceedings, would, in the circumstances, amount to an abuse of the process of the Court or not."

A reference is also necessary to one more authority i.e. in the case of M/s. Jayant Vitamins Ltd. v. Chaitanyakumar and another, , wherein it is observed to the following effect.

"The investigation into an offence is a statutory function of the police and the superintendence thereof is vested in the State Government and the Court is not justified without any compelling and justifiable reason to interfere with the investigation. Thus where the investigation which is still on its way and the further investigation in the offence is legally permissible as contemplated by section 173(8) of Cri.P.C., the quashing of investigation by the High Court would not be permissible."

9. Considering the ratio laid down in the above authorities and considering the fact that this is a complaint filed by the Assistant Director of Revenue Intelligence, in which though process is issued, it is served only against one of the petitioner and it is yet to be served on other 3 petitioners, the Criminal proceedings are being challenged under section 482 of the Criminal Procedure Code. Considering the above guidelines and parameters in exercise of jurisdiction under section 482 of Cri.P.C. it is now necessary to consider the allegations in the complaint. The Assistant Director of Revenue and Intelligence, Bombay, filed complaint against the present petitioner for the offence punishable under section 135(1)(a), 135(1)(b) read with section 135(1)(i) of the Customs Act, 1962 and also under sections 132 and 140 of the Customs Act, 1962 and also under section 5 of the Imports and Exports (Control) Act, 1947. The allegations in the complaint are that, the directorate of Revenue and Intelligence collected certain information which indicates that M/s. Venugopal Engineering and Videocon Group Company has imported about 3000 kits of National Brand Room Ali Conditioners and they have declared them as component/parts of the ventilating and recycling hood to evade huge amount of customs duty payable under Customs Act, 1962 and Import and Export (Control) Act, 1974. In pursuant of the said information factory premises and office from Aurangabad and Ahmednagar were searched by the Director of Revenue and Intelligence and on 20-6-1990 and 26-6-1990 several incriminating documents were recovered and seized. During the course of investigation it was also found and revealed that M/s. Venugopal Engineering (P.) Ltd. is holding provisional S.S.I. registration. Somewhere in the year 1989 agreement was entered into and signed by Videocon Appliances Ltd. with one company from Japan for manufacturing of room air conditioners. Said contract was signed in the name of Venugopal Engineering (P.) Ltd. and under agreement 3000 kits of National Brand room air conditioners have been imported of 4 lots of 1000, 750 and 750 kits each. During the course of investigation it further revealed that after going through a large number of seized documents it was found that M/s. Venugopal Engineering (P.) Ltd., have imported 3000 kits of room and filed 8 bills of entry for their clearance from customs through S.N. Mainkar, Bombay M/s. Venugopal Engineering (P.) Ltd. has split up the whole kit in two parts one consisting of compressor and the other consisted all other components. The compressors were being declared as parts of room air conditioners and the other parts as parts of ventilating and recycling hood. All the 3000 kits came in 4 lots of 500, 1000, 750 and 750 kits.

10. During the investigation it further transpired that first lot of 500 kits of room air conditioners was imported in the name of M/s. P.N. Dhoot Investment Co. Pvt. Ltd. The other details about the import has been given and in respect of the bills. The second lot of 1000 kits manufactured under one time in the cargo manifest and freight list while third and fourth lot of 750 kits was manifested with the changed description under two separate items in the respective manifests of the two vessels. The other details in respect of bills is being given. It is further contended in the complaint that the concerned authorities accordingly recorded statement on 26-6-1990 in respect of those 3000 kits under section 108 of the Customs Act i.e. of Mr. Javraman Gopalan, Dy-General Manager of M/s. Venugopal Engineering Ltd., Mr. Ramakant S. Mainakar, R.A. Galla, General Manager and then V.N. Dhoot on 26-6-1990 and 27-6-1990.

11. Investigation further revealed that the splitting of the complete kit of Air Conditioners into two parts and then changing the description of only one such split up part from air conditioner to ventilating and recycling hood is a manipulation done for the purpose of evading huge amount of customs duty. This appears to be further confirmed because with each consignment the shippers has sent a certificate similar to the one seized from his office. Thus in short it is contended that the above manipulation in the description of the goods are deliberate and they have colluded and resorted to wilful mis-statement and suppression of facts in relation to the description of the goods imported in the said 4 consignments with the sole intention to defraud the Government of the Customs duty leviable thereon and to evade customs duty of a very large amount. The documents submitted to the customs at the time of clearance showed manipulated and description having no connection with the declared description of the goods. It further shows the documents showing correct description were suppressed from the customs. It is also contended that technically and commercially room air conditioners and ventilating and recycling hood are two distinct products, and the components of room air conditioners can not be described as components of ventilating and recycling hood. Though in the S.S.I. certificate ventilating and recycling hood has been included as one of the product of M/s. Videocon have never manufactured this product nor do they intend to manufacture in future. Thus, it is contended by the complainant that during the course of investigation it reveal that all the petitioners colluded with each other and resorted to wilful mis-statement and forged documents before the customs at the time of clearance in respect of import of 3000 kits of room air conditioners and misdeclaration of description with the sole intention of evading the customs duty amounting to Rs. 2,21,55,051/- as per Annexure C and D. The complaint is filed before the Chief Metropolitan Magistrate at Bombay on 27th July, 1994 by the Assistant Directorate and Revenue Intelligence, Bombay. As according to the complainant present petitioner committed offence under section 135(1)(a) and 135(1)(b) which are made punishable under sections 135(1) and 132 of the Customs Act, 1962 and under section 5 of the Imports and Exports (Control) Act, 1947.

12. On bare perusal of the complaint, I find that, there is prima facie material to proceed against the present petitioners for the offence referred above. I further find that this being a prematured stage to consider the application to quash the proceedings when the present petitioners are yet to appear before the Chief Metropolitan Magistrate, Bombay in pursuance of the process issued against them for the offence. So far as regard contentions on behalf of the present petitioners by Shri Bajaj Advocate that the appeal filed by the present petitioners is remanded to the concerned authority, at any rate as submitted by him, so far as regard classification of the kits and confiscation of property is yet to be decided by the said authority and so far as this aspect the Appellate Authority has not considered anything so far as classification as given by the present petitioners. It is apparent, as contended by the complainant, that same is being done with an intention to evade customs duty and the amount of customs duty recoverable near about Rs. 2,21,55,052/-.

13. A reference in this respect is necessary to one authority on which reliance is placed by Shri Godhamgaon i.e. Elite Optical Industries v. Assistant Director of Enforcement, 1991(56) E.L.T. 16 (Mad.) wherein it is observed to the following effect.

"Adjudication and criminal prosecution-Both permissible concerning same matter as the same not amounting to doubts jeopardy. Adjudication authority not a "Court" trying an offence clean chit by adjudicating authority not creating immunity from criminal prosecution, illogicality and absurdity of the situation notwithstanding."

It is further observed in the said authority to the following effect:

"It is rather a very well-settled proposition by the apex of the judicial administration of this country that the adjudicatory proceedings and further prosecution in Criminal Court in respect of the same matter is legally permissible as the same is not amounting to double jeopardy falling within the tentacles of 20(3) of the Constitution of India. Further, the adjudicating authority cannot at all be construed as a Court trying an offence and giving a finding therefore in the said proceedings so that such a finding may be construed as one falling within the ambit of section 300 of the Cri.P.C. In this view of the matter, notwithstanding a finding had been recorded by the adjudicating authority giving a clean chit that the petitioners had not retained any foreign exchange to their credit ............ the petitioners cannot be stated to be immune from criminal prosecution and further it is open to the Criminal Court to arrive at a finding different from the one given by the adjudicating authority on consideration of the materials and evidence placed before it."

14. In view of the factual aspects referred above I find that the application for quashing criminal proceedings deserves to be rejected as same being without merit, misconceived and present application being filed only with a view to protract the litigation.

15. In the result petition is dismissed. Interim relief granted stands vacated. The present petitioners are directed to appear before the Chief Metropolitan Magistrate, Bombay.