R.K. Goenka vs Collector Of Customs And Anr.
2002 Latest Caselaw 1497 Del

JUDGMENT

O.P. Dwivedi, J.

1. By this common judgment, I propose to dispose of four petitions being CRL. R.157/2002 titled Sh. Subhash Chander Wadhwa v. Neeraj Gar; CRL. R. 271/2002 titled Parvesh Kumar Gujral v. Neeraj Garg; Deepak Kaushal v. Neeraj Garg titled 272/2002 and CRLM(M) 1132/2000 titled R.K.Goenka v. Collector of Customs and Anr., as all raise a common question of consideration namely whether the prosecution launched by the department against the petitioners under Section 132 and 135(1) (a) of the Customs Act and Imports and Exports (Control) Act, 1947 can/ should continue even after they have been exonerated by the department in adjudication proceedings.

2. Briefly narrated the facts leading to petition No. CRLM(M) 1132/2002 are that the petitioner No.1 Mr. R.K.Goenka as proprietor of M/s Mirah Decore had imported a consignment of decorative paper for laminate in 1987 from Singapore. They had filed yellow bill of entry dated 1.8.87 at ICD New Delhi for clearance of goods i.e. decorative paper for laminate through its agents, M/s Om International New Delhi of which the petitioner No.2 is the Director. The clearance was sought under REP Import license No. P/L/3149498/C/ZZ/02/Q/86/C.11.1 dated 9.10.86. The bill of entry was marked to Superintendent (CFS) for examination of goods with the direction to send the goods to the assessing officer. The goods were examined at CFS on 19.8.87 and samples were drawn in the presence of CHA and the Importer. On 24.8.1987, Assistant Collector (ICD) received information that the goods declared as 'Decorative paper for Laminates' were not as per declaration. He therefore ordered 100% examination of the goods on 25.8.87 in the presence of the importer, CHA, Superintendent (ICD) and Superintendent (CFS). Two cartons containing 10 samples/ catalogue books for wall paper were found which had not been mentioned in the wrapper. The labels found on the goods clearly indicated that the goods were not decorative paper for laminates but were in fact wall paper. The license produced by the importer did not cover importation of wall paper. Import of any goods into Indian territory except under an in accordance with a valid import license under Clause 3 of Imports (Control) order issued under Section 3 and 4A of the Imports and Exports (Control) Act, 1947 which prohibitions by virtue of Section 3 B ibid are deemed to have been imposed under Section 11 of the Customs Act, 1962. Accordingly, the entire goods were seized under Section 110 of the Act under the reasonable belief that the same were liable to confiscation under Section 111 of the Act. A show cause notice in respect of adjudication proceeding was issued for mis-declaration of value of the goods and importing the goods without license and adjudication order was passed by the Collector on 20.12.88 against which an appeal was preferred to CEGAT. Petitioner approached the Supreme Court in Civil Appeal No. 4860/92 and the matter was remanded to the Tribunal for fresh consideration. The matter was reconsidered by a special Bench of the Tribunal which in its order dated 10.5.93 held as under:

" We are of the view that the arguments of the learned SDR for placing reliance on the quotation are not really relevant to the issue for the purpose of proceedings in remand before the Tribunal. Revenue has failed, as rightly pointed out by the learned advocate, to prove that the quotation in question relates to the period when the goods were imported.

Once the sole basis for revaluing the goods at a higher level by the Revenue goes away on the aforesaid ground, the only evidence that remains for the value of the goods is the invoice of the appellant. Argument of the learned SDR to the effect that if the strength of Tribunal's two judgments in the cases of Shiv Shakti Enterprise and photocopy Centre is not tenable.

Those judgments dealt with misdeclaration regarding the description of the goods to an extent that the goods are totally different in character from the goods described in the invoice/bill of entry. For example, in the case of photocopy Centre the goods were described as spares for photocopier whereas they were found to be photocopier in ckd condition and in the case of Shiv Shakti the goods were found to be snap fasteners but the goods were misdeclared by the importers as rivets. In the present case, however, misdeclaration cannot be termed to be of such a substantial character as to discard the invoice value itself.

Description of the goods is 'decorative papers for laminates' whereas these have been found to be 'decorative wall paper'. Character of the goods in both the cases is 'decorative paper'. There is only a difference in thickness and no doubt it has been admitted by the appellant that the imported goods could be used as' wall paper'. Accordingly, we are of the view that in the peculiar facts and circumstances of this case the invoice value cannot be discarded, as contend by the learned SDR, more so in the absence of any acceptable evidence regarding the correct valuation of the goods at the time and place of importation of the goods. In the circumstances, we hold that the department has failed to prove under valuation of the goods in the instant case. We accordingly order that the value of the goods be accepted as declared by the appellant."

3. In the meantime on 28.4.1988, the Collector of Customs filed a complaint against the petitions under Section 132 and 135(1)(a) of the Act and Section 5 of the Imports and Exports (Control) Act, 1947 whereupon the petitioners were ordered to be summoned. That the proceedings are going on a snail's pace is apparent form the fact that even after 14 years the complaint is still at the stage of pre-charge evidence. Then on 12.10.2001 the petitioners filed an application for dropping the proceedings. The said application was rejected by the learned ACMM Sh. V.K. Maheshwari vide detailed order dated 13.2.2002 mainly on the ground that the finding in the adjudication proceedings is not binding on the criminal proceedings and is no bar to the continuance of prosecution. Feeling aggrieved, the petitioners have filed the present petition under Section 482 of the Code of Criminal Procedure read with Article 226 and 227 of the Constitution of India for quashing the impugned order as well the complaint.

4. The facts in CRL.R. Nos. 157-271-272/2002 are that on the night intervening 1st and 2nd November, 1996, one Abhay Tuli was intercepted when he was going to Bangkok by flight No. TG-316 and foreign currency equivalent to around Rs. 2.71 crores (approx.) was recovered form him. In his statement he named three persons namely Subhash Chander, Parvesh Kumar Gujral and Deepak Kaushal besides others who had arranged the foreign currency which was being smuggled. The entire amount of foreign currency was confiscated under Section 113(d), (e) and (h) of the Customs Act 1962 (for short the 'Act') and the personal penalty of Rs. 3,00,000/- each was imposed on the three petitioners under Section 114 of the Act. The petitioners filed appeal before the Commissioner Customs (Appeal) who vide order dated 7.6.2001 accepted the appeals of the petitioners being of the view that the department has not been able to establish the petitions involvement in the attempted export of the foreign currency seized on 2.11.96. The Appellate Authority held that no penalty under the Act is imposable on them. Accordingly, their appeals were accepted and the order imposing penalty on them were set aside.

5. The thrust of the arguments of Sh. Aggarwal, learned counsel for the Department of Customs is that the departmental authorities are not a Court within the meaning of Article 20(2) of Constitution of India so their finding neither operates as a bar to the prosecution under Section 135 of the Act nor for the same reason it can operate as a issue estoppel in the criminal case. Reliance was placed on a decision of the Supreme Court (Constitution Bench) in the case of Assistant Collector of Customs v. L.R. Malwani reported in 1999 (110) E.L.T. 317 (S.C.) In that case Hon'ble Supreme Court was dealing with the criminal appeal against the decision of the High Court of Bombay in criminal revision application No. 238/66 wherein these questions of law had arisen for consideration. An other decision cited by Sh. Aggarwal is from Andhra Pradesh High Court in the case of K. Neelkanta Rao v. State of Andhra Pradesh reported in 2000 (122) E.L.T. 7(A.P.) wherein the petitioner was facing prosecution for gold smuggling and unauthorizedly holding foreign currency. He sought stay of the trial till the completion of the adjudication proceedings. Hon'ble High Court declined the request on the strength of the decision of the Supreme Court in the case of Assistant Collector of Customs (supra). Learned single Judge of Andhra Pradesh, High Court also referred to two decisions of Delhi High Court in the case of S.K. Sinha v. S.K. Singal - (1987 (30) E.L.T. 900 (Del) = (1987) 32 DLT 91 (Delhi) and in the case of Willi Lemback v. Rajan Methur and Anr. (XI-1992(3) Crimes 692. In both these cases this High Court has taken the view that if the department has no good case for the purpose of adjudication it will be most unjust to require the petitioners to go through the entire process of prosecution. Learned single Judge of Andhra Pradesh High Court observed that the finding in the adjudication proceedings need not necessarily be perfect. There may be occasions where the presentation officer before the adjudication proceedings might have acted negligently, might have omitted to bring on record some crucial piece of evidence which was available. The adjudicating authority might have committed a serious blunder in appreciating the material. Therefore the failure of the department in the adjudication proceedings would not necessarily warrant the quashing of prosecution. There is no dispute with the proposition of law that the finding of departmental authority in adjudication proceedings does not operate as a bar for prosecution under Article 20(2) of the Constitution of India nor does it operate as an issue estoppel in the criminal proceedings. Even the two decisions of Delhi High Court in the case of S.K. Sinha and Willi Lemback (supra) do not say anything to the contrary. Both these decision of Delhi High Court do not run counter to the decisions of the Supreme Court in the case of Assistant Collector of Customs (Supra). They only questioned the desirability of continuing the prosecution after the department failed in the adjudication proceedings after a long battle. In both these cases this High Court was dealing with cases where the petitioner had invoked its inherent power under Section 482 of the Cr. P.C. for quashing proceedings under Section 132/135 of the Customs Act. In the case of S.K. Sinha (supra) Hon'ble Malik Sharief-Ud-Din, J. observed as under:-

"A decision by the Tribunal in the proper sense of the word therefore, is a decision of a departmental authority drawn on the basis of a set of facts and evidence. The lease that can be said is that if the department does not feel aggrieved of the finding of the Tribunal and accepts it as final and correct, then it has to be contended with it. I, therefore, fail to understand as to how on the same set of facts and evidence, the department can foist criminal liability upon a person about whom it has accepted that on this set of facts and evidence he cannot even be proceeded against in the adjudication proceedings. In criminal matters the degree of proof required is far more strict. If the departmental authority, has no good case, for purposes of adjudication, it cannot claim to have a good case for purposes of criminal prosecution, particularly when the prosecution is also based on the same set of facts and evidence.

It will be most unjust to require the petitioner to go through the entire process of the prosecution in the circumstances of this case. This might virtually amount to persecution and in my view this will amount to abuse of the process of the Court. In view of the findings of Tribunal there is not case against the petitioner. It is as such not legal to prosecute the petitioner of a criminal offence on this set of facts and evidence."

6. In the case of P.S. Rajya v. State of Bihar - 1996 S.C. Cases (Cri.) 897, the appellant a Income Tax Officer was prosecuted by the CBI for being found in possession of the disproportionate assets. Later on the Central Vigilance Commission exonerated the appellant in the departmental proceedings and this was concurred by the UPSC. The appellant then filed a petition under Section 482 Cr.P.C. in the High Court for quashing prosecution but the High Court rejected the petition being of the view that issues raised had to be gone into in the final proceedings. The appellant then approached the Supreme Court. Apex Court allowed the appeal and hold that when on the same allegation appellant has been exonerated in the departmental inquiry there was no justification in continuing the prosecution. In the case of Uttam Chand v. Income Tax Officer, Central Circle, Amritsar - Income Tax Reports Vol. 133 page 909 (S.C), the income tax department had launched the prosecution against the petitioner for filing false return. In the departmental proceedings the Tribunal exonerated the petitioner. Supreme Court held that after the petitioner has been exonerated by the department's Appellate Authority, he could not be prosecuted in a criminal Court on the same facts. Likewise, in the case of G.L. Didwani v. Income Tax Officer - 1999 (108) ELT Page 16 (SC), the petitioner was prosecuted by the Income Tax department for concealment of income under the Income Tax Act. But the Tribunal who is the final fact finding authority under the Act decided the question in favor of the assessed. The Supreme Court held that prosecution on the same charges cannot be continued. This High Court also look the same view in the case of Munnalal Khandelwal v. Director of Revenue Intelligence Petition (Crl.) 952/99 decided by DB of this Court on 12.9.2002, Criminal Revision 420/1998 decided on 31.10.2000, 1987 (32) E.L.T. 511 (Del.) and 2002 (139) ELT 498(Mad.).

7. The question as to whether inherent powers under Section 482 Cr.P.C. should or should not be invoked would depend upon the facts and circumstances of the each individual case. It is rather a question of desirability than of legality of prosecution. In CRLM (M) 1132/2002 the complaint was filed in the year 1988. About 14 years have passed out proceedings are still at the stage of pre charge evidence. More than nine years have lapsed since the passing of order dated 10.5.1993 by the CEGAT whereby value of the goods as declared by the appellant was accepted by the department. That being so prosecution of the petitioners for fraudulent evasion of custom duty will not be in consonance with the position of the department in having accepted the value of the goods as declared by the petitioners to be correct. In CRL.R.Nos. 157-271-272/2002, foreign currency was not seized from the petitioners and the Tribunal has found that department has failed to establish the petitioners involvement in attempted export of the foreign currency seized on 2.11.96. The moot point for consideration, therefore, will be as to whether in the face of such findings by the department Tribunal, it will be possible to prove the offence alleged against the petitioners with the aid of the presumption of culpable mental state under Section 138A of the Act? Even if a culpable state of mind is presumed that by itself is not an offence. Of course, if there is recovery of any contraband articles from any person who pleaded innocence surely he can be convicted with the aid of presumption of culpable mental state under Section 138A of the Act. Once the recovery of any contraband article from any person is proved as a fact, it will be no defense for such person to say that be was not aware of the presence of the offending article in his luggage because the presumption of culpable state of mind would then be sufficient to make it a case of conscious possession. But when the Facts as determined by the Appellate Authority do not make out an offence per se, raising of presumption under Section 138A will be of no help to the prosecution. A mere guilty intention not accompanied by any overt unlawful act is not punishable under the Act or any other law. In all these cases the department Tribunal has not given any finding of fact which could make the petitioners liable for punishment under he Act. Therefore, raising of presumption of guilty state of mind will not strengthen the prosecution case. For these reasons I find, no cogent reason to adopt a different approach in the matter than that adopted by other benches of this Court in various decisions cited above.

8. In the result the four petitions being CRL.R.157/2002 titled Sh. Subhash Chander Wadhwa v. Neeraj Garg; CRL.R. 271/2002 titled Parvesh Kumar Gujral v. Neeraj Garg; Deepak Kaushal v. Neeraj Garg titled 272/2002 and CRLM(M) 1132/2002 titled R.K. Goenka v. Collector of Customs and Anr. are allowed and in exercise of inherent powers under Section 482 Cr.P.C., the proceedings pending against the petitioners in these cases in the Court of learned ACMM, Patiala House, New Delhi are hereby quashed.