Full Text
HIGH COURT OF DELHI
Date of Decision: 21st DECEMBER, 2021 IN THE MATTER OF:
AMIT KUMAR GUPTA ..... Petitioner
Through Mr. Priyadarshi Manish, Ms. Anjali J.
Manish and Mr. Kinjal Shrivastava, Advocate
Through Mr. Satish Aggarwala, Sr. SPP with Mr. Gagan Vaswani, Advocate
JUDGMENT
1. The present petition under Section 482 of the Code of Criminal Procedure is for setting aside the order dated 16.02.2020 passed the Ld. Chief Metropolitan Magistrate which directed the disposal of the goods imported by the petitioner which are perishable in nature and kept in the custody of the respondent in accordance with the Disposal Manual 2019. The Petitioner herein is a businessman and is the sole proprietor of M/s Jai Dev Traders, 384, Kirana Mandi, Ram Nagar, Ghaziabad-201001.
2. The facts, in brief, leading to the filing of the instant petition are as under: a) The Petitioner in the course of his business during October-December 2016 had imported Dry Dates from Dubai originating from Iran, about 2021:DHC:4307 8 containers thereof valued at Rs.1,24,22,876/- and 6 bills of entry of the dates were produced against the consignment. b) The Customs department received intelligence information that this consignment did not originate in Iran but loaded from Karachi Port by one agency namely Maersk Pakistan Line and the Petitioner showed the custom authorities the following Bills of Entry in its ledger book to dispel the suspicion of the Customs Department- SNo. Bill of Entry & Date Container No. Assessable Value
1. 5266364 dated 12.10.2019 MSKU1096949 SUDU6634850 Rs.3210314
2. 5266615 dated 12.10.2019 MSKU6524119 Rs.1605157
3. 5303582 dated 15.12.2019 TGHU4674899 MSKU8013669 Rs.2883446
4. 5309933 dated 16.10.2019 MSKU0254778 Rs.1511036
5. 5312175 dated 16.10.2019 MRKU4983009 Rs.1524899
6. 5363294 dated 19.10.2019 MRKU4378780 Rs.1528069 c) The 8 containers were accordingly taken in custody. For investigation, the department, on 01.11.2019 summoned the freight forwarder of M/s Sea Fast Shipping Agency and checked his phone. Incriminating information was found in the phone. Accordingly a panchnama was prepared on 05.11.2019. d) The Department also wrote to the shipping agency i.e. Maersk Line on 04.11.2019 to verify the shipping status of the 8 containers containing dry dates for sale in the background of assertion made by the Petitioner stating that the containers had been shipped from Iran. e) M/s Maersk Line replied vide email dated 5.11.2019 stating that the containers were shipped from Karachi Port, Pakistan. Documentary proof i.e. copy of Bill of Lading was annexed to the email. f) Thereafter, the seized containers were inspected and summons was issued to the Petitioner on 04.11.2019 seeking an explanation about the true origin of these goods. g) The statement of the Petitioner was recorded under Section 108 Customs Act where he allegedly admitted to the e-mail of Maersk Line confirming the origin of the goods to be from Karachi Port, Pakistan and not Iran. The said statement was later retracted by the Petitioner. h) The Customs Department arrived at the conclusion that the Petitioner had deliberately suppressed the origin of the containers containing packaged dry dates for evading customs duty as goods imported from Pakistan carry a higher import duty as against imported goods from Iran which have a lower rate of import duty. i) The department therefore finalized the amount of duty levied on the consumable goods imported from Pakistan as Rs.3,40,41,873/- and booked the Petitioner under Section 135 Customs Act and arrested him on 05.11.2019 whereafter he was sent to Judicial custody. The Petitioner was released out on bail on 20.12.2019. j) The Respondent herein preferred an application under Section 451 CrPC before the CMM, Patiala house seeking disposal of the perishable seized goods i.e. dry dates. The Petitioner herein contended before the Ld. CMM that the Court did not have jurisdiction under the Customs Act to direct the disposal of the imported seized goods. The Ld. CMM vide order dated 16.12.2020 passed the impugned order, directing the disposal of seized goods by relying on the verdict of the Supreme Court in Sunder Bhai Amba Lal Desai v. State of Gujarat, (2002) 10 SCC 283, which states that perishable goods seized by the customs should be disposed of in a quick and efficacious manner.
3. Mr. Priyadarshi Manish, Ld. Counsel appearing for the petitioner submitted that the Ld. CMM did not possess the jurisdiction to pass an order to dispose of the imported goods under Section 451 of the Cr.P.C. He submitted that the Customs Act is a self-contained code which governs the importing of goods in the country and has its own special powers, procedures, regulations and rules which have been arrived at pursuant to its unique objective it aims to fulfill; he argued that Customs Act being a special legislation, the provisions of the Cr.P.C would be inapplicable. He submits that any disposal of the goods should have been in accordance with Chapter XIV of the Act which prescribes for confiscation of goods and the levying of penalties and punishment and any rule made in pursuance thereunder.
4. He submitted that Section 451 of the Cr.P.C authorizes a criminal court to dispose of the property which is subject to decay, he would contend that a criminal court does not have any jurisdiction under the Customs Act. He states that the Customs Act is self contained and only the authorities under the Customs Act have the jurisdiction/power to dispose of the goods confiscated under the Customs Act. He submits that order directing disposal could not have been passed either under Section 451 CrPC or Section 122 Customs Act.
5. He further argued that, without prejudice to his other contentions, under Section 451 Cr.P.C the criminal court can only make such order during a trial or pending the conclusion of the inquiry under Cr.P.C. It is submitted that a trial going on under the Cr.P.C prior to the disposal of the goods as per the mandate of Section 451 Cr.P.C. Reliance was placed upon Hardeep Singh v. State of Punjab, AIR 2014 SC 1400, which defines the term ‘inquiry’ and draws its distinction from ‘investigation’ done by any investigating agency.
6. He submitted that the adjudicating authority failed to see that the petitioner had already waived his right to the show-cause notice being served on him and the adjudicating order was passed by giving option to the Petitioner to redeem the goods after payment of 12.[5] lakh. He would, therefore, contend that the petitioner has been given the option to redeem the goods after payment of Rs.12.[5] lacs and there was no question of disposing the goods under Section 451 Cr.P.C.
7. In support of his submissions the Ld. Counsel for the Petitioner has relied upon the judgment of this Court in Directorate of Revenue Intelligence V. M/s PRK Diamonds Pvt. Ltd, (Crl. MC No. 4316/2016) wherein this Court has held that the goods confiscated under the Customs Act cannot be disposed of under Code of Criminal Procedure.
8. It is stated by the learned counsel for the petitioner that a notice has to be issued under Section 451 Cr.P.C before confiscation of the goods within six months. He would state that the adjudicating authority has imposed a penalty of Rs.29,50,000/- under Section 112(a) (ii) of the Customs Act and Rs.10,00,000/- under Section 114A of the Customs Act. He would state that there is a direction of the authority that in any way it is open to the petitioner to pay the fine and get the goods redeemed and therefore, goods ought not to have been sold because once the goods sold can never be recovered back. He would further state that the petitioner cannot be saddled twice i.e. (a) impose penalty and (b) sell the goods. He would state that the action can be taken by the Customs Department only under Section 135 of the Customs Act and goods cannot be sold by invoking provision of Section 451 Cr.P.C which postulates an inquiry or trial under the Cr.P.C and which cannot be invoked for dealing with the goods which have been confiscated under Customs Act.
9. Per Contra, Mr. Satish Aggarwala, Sr. SPP vehemently opposed the submissions of the Petitioner. He submitted that firstly the consignment of goods imported into India was falsely shown as being imported from Iran and was imported in India from Karachi, Pakistan to evade payment of the applicable customs duty on goods arriving in India from Pakistan. He submitted that the bills shown by the Petitioner showing the origin of the seized goods (dry dates) as Iran were false and that the Petitioner had deliberately mis-declared the origin of the country from where it was imported and this has been carefully verified by the department from M/s Maersk Line Pvt. Line which was the shipping agent of the goods. He submitted that the Petitioner is guilty directly of Section 46(4) of the Customs Act which warrants an importer to subscribe to a declaration as to the correctness of the contents of the bill of entry, and such a violation would entail confiscation of goods under Section 111(m) and be subject to a penalty under Section 112(a) (ii) of the Act and also liable for higher penalty under Section 114A which specifically provides for penalty to be imposed for mis-declaration of imported articles and knowing suppression of material information about the articles, and such penalty would be commensurate or more with the interest levied on the misrepresented goods.
10. The Ld. SPP submitted that the Petitioner was given an opportunity to pay the penalties and de-seize the confiscated imported goods pursuant to being served a show-cause notice, he submits and it has been conceded by the Petitioner that he waived his right to receiving a show-cause notice and that he would contest the confiscation by the department. He further submitted that the Petitioner’s statement was recorded under Section 108(3) of the Act wherein the Petitioner was confronted about the containers that were marked differently from what it contained inside and the Petitioner admitted that the origin of the goods was not from Iran, therefore stating that bills produced in support of were ingenuine and forged. The Ld. Counsel also admits that the statements of the Petitioner of 5.11.2019 and 15.11.2019 stand retracted.
11. The Ld. SPP argued that the Petitioner had in statement had stated to the Respondent that he would require some time to think about payment of 200% BCD Fine which is attracted to the goods being imported from Pakistan as per CBIC Notification No. 05/2019 dated 16.12.2019 and no response to that effect was received from the Petitioner about the payment of 200% penalty/fine on the goods. Further, Mr. Aggrawala submitted that the disposal of the goods was not under the provisions of the Cr.P.C, he submits it was done in accordance with the Disposal Manual of 2019 that is made applicable the Customs Act. He advanced that the Disposal Manual itself mandates the procedure of disposal or discarding of goods is to be done as per the process laid down under Section 451 CrPC. He submitted that the goods in question were dry dates which have a very short shelf life and are perishable in nature which require it to be consumed within a period of time. He submits that dry dates fall under Category 1 of the Disposal Manual, which are goods which need to be disposed of immediately after being seized. He emphatically argued that disposal of the confiscated goods was not the first option but the last choice after giving an opportunity to the Petitioner to deposit the penalty and after giving chances to explain cogently the circumstances to prove the authenticity of the bills/certificates of origin.
12. The learned SPP relied on the following judgments: Manjit Singh v. State, CRL. M.C. 4485/2013 - Delhi High Court. Sunderlal Ambalal Desai V. State of Gujarat (2002) 10 SCC
13. Heard arguments of both parties, perused the case record and the case laws filed in support of the rivaling contentions.
14. The Customs Act provides for a comprehensive framework governing the import and export of goods, articles into the country with an objective to curb smuggling of goods into the country through seaports and airports. The Customs Act is a complete code in itself and it being a special legislation, it has its own powers, procedures, rules and mode of operation including the powers of arrest, investigation, examination of persons, inspection, seizure, confiscation, adjudication, imposition of penalty, appellate mechanisms, the settlement commission. These reasons in itself confer vast powers on the customs department for it being a statute which aims at preventing the proliferation of a parallel economy which is askew from the normal economy and which allows the spreading of all illegal and banned activities including terrorism, illegal money transfers, trafficking of vulnerable groups and the derailment of the normal economy thereby shifting the balance of demand and supply and creating an artificial shortage or excess of goods.
15. While dealing with the Foreign Exchange Regulation Act, the Supreme Court in CBI V. State of Rajasthan, (1996) 9 SCC 735, held that the Foreign Exchange Regulation Act was a self-contained code which was governed by its special trappings and that a police officer could not make an application under Section 155(2) CrPC to the Chief Judicial Magistrate to obtain permission to investigate offences committed under the FERA. The Court held as follows:
16. This Court in Directorate of Revenue Intelligence V. M/s PRK Diamonds Pvt. Ltd. (supra), has at great length dealt with the question that is posed by the present case. It was held therein that –
21. Category 1 of the Disposal Manual, 2019 outlines the goods that have a short life and therefore limited period of usage and the goods imported by the Petitioner fall under this category which is reproduced as under – “2.3.Category-I: Goods to be Disposed of Immediately After Seizure 2.3.1. The goods under this category have a very short shelf-life as they are either prone to rapid decay or they become outdated/ obsolete very fast. Some of these goods are liable to deterioration due to drying or humidity. Some others may require special arrangements for their preservation and storage. Some of such goods may be perishable in nature, while some others may have certain expiry date prescribed thereon. Therefore, these goods may be disposed of immediately after seizure, after issue of a Notice to the owners/ claimant (party) and obtaining orders from the Competent Authority. The goods falling under this category include: i. Fresh flowers; ii. Fresh fruits and vegetables, meat, fish, poultry, eggs and other fresh uncanned/unprocessed food materials; Categories of Goods iii. Cereals, sugar and other grocery items; iv. Beer; v. Medicinal herbs; vi. Cigarettes, bidis, bidi-leaves and tobacco; vii. Livestock; viii. Raw (wet and salted) hides and skins; ix. Salt and hygroscopic substances (other than in sealed containers); x. Petroleum products; xi. Molasses; xii. Newspapers and Periodicals; xiii. Confectionery; xiv. Menthol, Camphor, Saffron; xv. Tea and Coffee; xvi. Cells, batteries and rechargeable batteries; and xvii. Lighters with gas (not having arrangement for refilling), Lighter fuel. 2.3.2. The above list is not exhaustive. The Principal Commissioner/ Commissioner in-charge may decide any seized item to be perishable, depending upon its nature and shelf-life, if he deems that prolonged storage may result in deterioration of the goods. 2.3.3. Apart from the goods which are likely to deteriorate or perish, the seized goods for which the recurring cost of upkeep or the cost likely to be incurred on the special arrangements required for storage, is disproportionately high (e.g. animals or dangerous goods) may be disposed of after observing the prescribed formalities and after due intimation to the owner or claimant about the date, time and manner of such disposal.”
22. A perusal of the disposal manual does not indicate that provision under Section 451 Cr.P.C can be invoked for disposal of the goods confiscated under the Customs Act. This Court does not find any reason to differ from the view expressed in Directorate of Revenue Intelligence V. M/s PRK Diamonds Pvt. Ltd. (supra).
23. Therefore, in view of the above, the present petition is allowed and the order dated 16.02.2020, passed by the Ld. Metropolitan Magistrate, Patiala House Court stands quashed and is set aside.
24. Accordingly, the petition is disposed of along with the pending application(s), if any.
SUBRAMONIUM PRASAD, J DECEMBER 21, 2021 Rahul