Dhirendra Sheth @ Dhirbhai vs Directorate Of Revenue ...
2005 Latest Caselaw 787 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. Mr. Subramaniyam, the learned senior counsel who appeared on behalf of the petitioner, submits that the investigation has been going on and the petitioner has already spent 54 days in custody and the 60 days' period is shortly going to be over. He further submitted that the goods imported under the D.E.E.C. Scheme were in fact imported by Gudiya Fashions Private Limited of which the petitioner was acting as a commission agent. However, the case for the prosecution is that the goods were imported at the instance of the present petitioner and he was the master-mind behind this entire fraud. The case against the present petitioner is that polyester fabrics were imported under the scheme under licenses which were with the condition of actual user and were tied with the further condition of an export obligation. Under this scheme, goods imported are entitled to duty concessions/exemptions. The allegation is that these goods were imported availing of duty exemptions and thereby deriving a benefit of non-payment of customs duty, however, these goods were diverted in the local market and the export obligation was not met.

2. The case of the prosecution further is that the said Gudiya Fashions Private Limited did not have a manufacturing unit at all and, therefore, a fraud has been played upon the State and customs duty to the extent of Rs.6.40 crores has been evaded by this clever device. The learned counsel for the petitioner, however, contends that even going by the story of the prosecution, the duty amount involved would be Rs.3.40 crores. The learned counsel for the petitioner submitted that in good faith and without prejudice to his rights and contentions, the petitioner had deposited a sum of Rs.1.00 crore by two separate bank drafts of Rs.50.00 lakh each with the Department of Revenue Intelligence at the time the proceedings were going on before the Sessions Court.

3. It was further volunteered by the counsel for the petitioner before the Sessions court that a further sum of Rs.50.00 lakh would also be deposited without prejudice within 15 days of the release of the petitioner. Unfortunately, as the release of the petitioner did not fructify, the balance Rs.50.00 lakh was not deposited. The learned counsel for the petitioner reaffirms the offer with the condition that instead of 15 days he may be permitted to deposit the said amount of Rs.50.00 lakh without prejudice within a period of four weeks from the date of release.

4. The learned counsel for the State, Mr. Satish Aggarwal, vehemently opposed the grant of bail. Firstly, he pointed out that it is the petitioner who was the master-mind behind this entire transaction whereby import licenses were obtained on the basis of fraudulent statements and the goods ultimately imported on the basis of these licenses were diverted in the local market rather than meeting the export obligation. He contended that by this method, the petitioner, in concert with Prithpal of Gudia Fashions Private Limited and one Deepak Ganatra, managed to evade customs duty to the extent of Rs.6.40 crores. He also opposed the bail application on the ground that two employees of the petitioner, namely, Hitesh Sanghvi and Bhavin are not coming forward despite summons having been issued and it is clear that it is on account of the petitioner that they are not coming forward.

5. In rejoinder, the learned counsel for the petitioner further submitted that now Section 137(3) has been introduced into the Customs Act, 1962 whereby all offences including the present one under Section 135 of the said Act would be compoundable. In this view of the matter, he submits that it is not, at all, necessary that the petitioner be kept in custody any further as whatever interrogation of petitioner had to be done has already been done.

6. In these facts and circumstances and in view of the submissions made by the counsel for the parties, I feel that further custody of the petitioner is not necessary as all the materials in the shape of documents, etc., have already been recovered from the petitioner and no further interrogation would be necessary in this matter. Accordingly, I direct that the petitioner be released on bail on furnishing a personal bond in the sum of Rs.10.00 lakh with one surety in the sum of Rs.2.00 lakh to the satisfaction of the concerned ACMM/Duty Magistrate. As the petitioner has volunteered, he shall deposit a further sum of Rs.50.00 lakhs within four weeks from the date of the release as indicated above. This deposit, as also the previous deposit, shall be without prejudice to the rights and contentions of the parties and shall remain deposited with the Department of Revenue Intelligence till the final adjudication of the case. The petitioner shall deposit his passport with the concerned court within seven days and shall not leave India without the permission of the concerned court. He shall continue to join investigation as and when directed by the investigating agency in accordance with law.