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.