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1 IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) No. _____ _ OF 2017
IN THE MATTER OF:
Dipak Bajaj S/o. Late Awat Ram Bajaj,
Permanent Resident of House No.12/6 – Flaxley Road,
Modern, SM46L.J., London (UK), Now Residing at
C/o. K.T.Dubey, ‘Giriraj’, 2nd Floor,
Dhal Road, Junagadh,
Gujrat-362001 ….Petitioner
Versus
1. Union of India Rep. by its Secretary, Ministry of External Affairs
E Block, Central Secretariat,
New Delhi 110001.
2. Commissioner of Customs, Hall No. 3, 5th & 11th floor,
Kendriya Bhawan, Sector – H, Aliganj,
Lucknow,
Uttar Pradesh 226024
3. Assistant Commissioner, Customs Duty,
P.O. Nautanwa, Maharajganj-273164
Uttar Pradesh. ….Respondents
CIVIL WRIT PETITION FILED UNDER ARTICLE 32 OF THE
CONSTITUTION OF INDIA READ WITH ORDER XXXVIII,
RULES 1-13 OF SUPREME COURT RULES, 2013 FOR THE
ISSUANCE OF A WRIT IN THE NATURE OF MANDAMUS FOR
THE ENFORCEMENT OF FUNDAMENTAL RIGHTS UNDER
ARTICLE 21 OF THE CONSTITUTION OF INDIA, 1950.
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2 TO, THE HON’BLE CHIEF JUSTICE OF INDIA
AND HIS COMPANION JUSTICES OF THE SUPREME COURT OF INDIA
THE HUMBLE PETITION OF THE PETITIONER ABOVE NAMED.
MOST RESPECTFULLY SHOWETH
1. That the Petitioner in this Writ Petition seeks to challenge the
seizure and subsequent impounding of his passport by the
Customs Authority without the authority of law. It is the case
of the Petitioner before this Hon’ble Court that Petitioner’s
fundamental right under Article 21 of the Constitution of India
has been violated as his personal liberty has been restricted
by the seizure and subsequent impounding of his passport by
the Customs Authority without the authority of law.
Petitioner who is a British citizen and a holder of British
passport has been convicted for smuggling gold from Nepal to
India, by the Special Chief Judicial Magistrate in Criminal
complaint No. 765 of 2014 and he was sentenced to undergo
one year simple imprisonment and fine of Rs, 75,000/-. The
Petitioner has completed a sentence of 10 months. Presently,
the Petitioner has been granted bail by Court of Sessions
Judge, Varanasi vide its order dated 11.08.2017 in Criminal
Appeal No. 173 of 2017 wherein the Ld. Sessions Judge
stayed the operation of the order dated 20.07.2017 in Criminal
complaint No. 765 of 2014 upto the extent that the Petitioner
herein deposits half the amount of fine that was imposed on
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3 the Petitioner. The Petitioner was released on bail vide this
order on furnishing a personal bond of Rs. 25,000/-. During
the course of proceedings, the Customs Authority has seized
the Petitioner’s foreign passport without following the
procedure under law and the same is under challenge before
this Hon’ble Court.
1A. The Petitioner has not approached any other Court raising
similar reliefs.
2. The following substantial questions of law of public importance
arise in the present writ petition:
(i) Whether the Petitioner’s right to personal liberty under
Article 21 of the Constitution of India has been violated?
(ii) Whether the Customs Authorities in India have the
power to seize and impound a British Passport, which is
effectively the property of the British Government?
(iii) Whether the Indian Government can seize the travel
documents as well as foreign passport without the
authority of Criminal Court in case the foreign passport
holder commits a crime on Indian soil?
(iv) Whether the Custom Authorities are empowered under
the Customs Act, 1962 to seize a foreign passport, given
that they cant seize an Indian passport even, and such
authority lies only with the Passport Authority under the
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4 Passports Act, 1967 and that too with regard to an
Indian Passport only?
(v) Whether the Passport Authority under the Passports Act,
1967 has the power to seize a foreign passport because
as per Section 2(b) a ‘passport’ is defined as passports
issued or deemed to have been issued under the
Passports Act, 1967?
(vi) Whether the seizing of the Passport of a foreign national
thereby restricting his movement would violate Article
14, 19 and 21 of the Constitution of India?
3. The chronology of events that urged the petitioner to
approach this Hon’ble Court are as follows:
a) The Petitioner is a British Citizen. He runs his business in
United Kingdom and is a passport holder of the United
Kingdom. The Petitioner while coming from Nepal was
stopped by the Officers of SSB Sonauli (Nautwana District –
Maharajganj) for checking. During the course of checking
4320 grams of gold totally valued at Rs. 1,09,12,590/- was
found along with other goods and foreign currency. Performa
for arrest was drawn along with the recovery memo. A true
copy of the arrest memo of the petitioner dated 03.04.2014 is
annexed hereto and marked as ANNEXURE-P1[Pages 32-
34]. A true translated copy of the report of testing by Tanish
Jewellers dated 3.04.2014 is annexed hereto and marked as
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5 ANNEXURE-P2[Pages 35-36]. A true translated copy of
Panchnama/Recovery Memo dated 03.04.2014 is annexed
hereto and marked as ANNEXURE-P3 [Pages_37-42].
b) Petitioner was handed over by SSB to the officers of Land
Customs Station Sonauli. Ajay Dixit, Commissioner, Customs
(P) Commissionerate, and Lucknow arrested petitioner under
Section 104 of the Customs Act, 1962 (“Customs Act”) on the
charge of smuggling of foreign origin gold weighing 4320
gram on 04.04.2014.
c) Performa of Seizure was drawn wherein a detailed account of
the items found on the Petitioner was recorded. Following
items were found on the Petitioner:-
1. “Golden Coins (Krugerrand FYN GOUD 10Z Fine Gold
South Africa)-Quantity-58 No. s, Weight-1.964 kg.
Cost Rs.40,21,290/-
2. Gold Best Value Cast Bar (Birmingham UK, Pure Fine)
(999.9)-01 kg, Cost Rs.29,25,000/-
3. Gold best value Cast Bar (Unicore Fine Gold
No.18046) (999.9)-500 Gram, Cost Rs.14,62,500/-
4. Small Golden Balls (Grilled)-856 Gram, Cost
Rs.25,03800/-
Total Weight of Gold-4.320 kg
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6 Total Cost Rs.10,91,2590 (Rupees One Crore Nine Lakhs
Twelve Thousand Five Hundred Ninety Only)”
It is submitted before this Hon’ble court that at this stage, the
passport of the Petitioner was not seized. It is only at a later
stage that seizure of passport has taken place. A copy of the
Performa of Seizure memo of CHQ Sonauli dated 05.04.2014
is annexed hereto and marked as ANNEXURE-P4 [Pages 43-
48]
d) Petitioner was granted bail on furnishing personal bond and
two heavy sureties vide order dated 28.01.2015 in Criminal
Miscellaneous Bail Application No. 18322 of 2014. A copy of
the order of High Court of Allahabad dated 28.01.2015 in
Criminal Miscellaneous Bail Application No. 18322 of 2014 is
annexed hereto and marked as ANNEXURE-P5 [Pages 49-
50].
e) Office of Customs Commissioner, Aliganj, Lucknow passed the
following order against the Petitioner herein in accordance
with the proceedings relating to the Show cause Notice dated
27.08.2014:-
“(a) I order for absolute confiscation of the 4320
grams foreign origin Gold valued at
Rs.1,09,12,590/- (Rupees One Crore nine lakhs
twelve thousand five hundred and ninety only)
under Section 111 (d) of the customs Act, 1962.
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7 (b) I order for absolute confiscation of 10 Currency
notes in the denomination of Rs.500/- with face
value of Rs.5000/- under section 111 (d) of the
Customs Act, 1962.
(c) I order for absolute confiscation of old white
cloth, one pair socks & shoes valued at Nil used for
conceding the said gold, under section 119 of the
Customs Act, 1962.
(d) I impose a penalty of Rs.25,00,000/- (Rupees
Twenty Five Lakhs only) upon Shri Dipak Bajaj
Section 112 of the Customs Act, 1962.”
A true copy of the order of Additional Commissioner Customs
Lucknow in C.No.VIII(10)68-Adj/ADC/NTW/2014 dated
02.03.2015 is annexed hereto and marked as ANNEXURE-P6
[Pages 51-69].
f) The Petitioner moved the Special Chief Judicial Magistrate,
Varanasi in vide Case No. 765 of 2014 wherein he prayed that
few articles recovered from him during his arrest have not
been seized and the same maybe released. The Petitioner had
filed an Application dated 13.03.2015 as well praying for the
release of the following items;- 1. Passport No. 511352051; 2.
Handset Blackberry Fcc No.L6ARCN70UW with battery & SIM.
3. Indian Currency 500x 10, 100x6, 20x1, 10x8; were the
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8 personal articles of the Petitioner. Special Chief Judicial
Magistrate, Varanasi vide his order dated 05.05.2015 in Case
No. 765 of 2014 held:-
"Heard & perused file. Applicant/accused
Dipak Bajaj is on bail in the present case. File is
pending trial and statement of witnesses is being
recorded. 4 Kg 320 gms gold is stated to have been
recovered from the possession of acad. Subsequently,
passport, mobile handset with SIM & battery and
Indian currency has also been recovered from
applicant/accused. Learned counsel appeared on
behalf of prosecution has contended that accused has
been released on bail. If passport is given to him then
there are very rare probability that he would comeback
in India. Accused is a foreign citizen. In such situation,
once he goes out of India, his appearance could not be
possible and trial of court would affect adversely. In
the objection, no any objection has been stated about
releasing mobile handset with SIM & battery to
applicant. With regard to remaining case articles, it is
stated that application has been filed before the
competent authority for release.
As applicant/accused is a foreign citizen. In case
passport is provided to him, there is absolute
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9 probability of fleeing away out of the country due to
which ensuring his appearance in the case would not be
possible. No any objection has been raised about
releasing remaining articles viz. Mobile handset with
SIM & battery. Therefore, releasing mobile handset
with SIM & battery would be justifiable. Application
is disposed of accordingly.”
A true translated copy of the Application preferred by the
petitioner before Special Chief Judicial Magistrate, Varanasi
dated 13.03.2015 is annexed hereto and marked as
ANNEXURE-P7[Pages_70-73]. A true translated copy of the
order of Special Chief Judicial Magistrate, Varanasi in Case No.
765 of 2014 dated 05.05.2015 is annexed hereto and marked
as ANNEXURE-P8 [Pages 74-76].
g) The Petitioner before the Additional Sessions Judge, Varanasi,
filed Criminal Revision No. 213 of 2015 dated 04.06.2015
against the order dated 05.05.2015 of the Special Chief
Judicial Magistrate, Varanasi in vide Case No. 765 of 2014.
Additional Sessions Judge, Varanasi in Criminal Revision No.
213 of 2015 filed against the order of the Special Chief Judicial
Magistrate, Varanasi in Case No. 765 of 2014 dated
05.05.2015 held:-
“On perusal of file of court below it is evident
that 4320 gms pure gold has been recovered
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10 from the possession of revisionist/accused,
market price of which is stated Rs. One Crore
Nine Lakh Twelve thousand Five Hundred
Ninety. Recovery of gold in such huge quantity
from the possession of revisionist shows that he
has been engaged in business of gold. Learned
Magistrate did not release passport of revisionist
taking this ground in impugned order that
revisionist a foreign citizen and there is absolute
probability of fleeing away abroad and after
leaving, ensuring his appearance would not be
possible. I do fully coincide with said order of
the learned Magistrate that court below has
passed justifiable order keeping in view the facts
& circumstances of the case, which does not
require any kind of interference.
Order
Criminal Revision is dismissed. Order dated
05.05.2015 passed by the learned Magistrate is
confirmed.”
A true translated copy of Criminal Revision No. 213 of 2015
filed by the petitioner before Additional Sessions Judge,
Varanasi dated 04.06.2015 is annexed hereto and marked as
ANNEXURE-P9[Pages 77-81]. A true translated copy of order
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11 of Additional Sessions Judge, Varanasi in Criminal Revision No.
213 of 2015 dated 22.08.2015 is annexed hereto and marked
as ANNEXURE-P10[Pages 82-86].
h) The aforesaid penalty of Rs, 25,00,000/- (Rupees Twenty Five
Lakhs only) levied by the Customs Commissioner levied by his
order dated 02.03.2015 has been paid by the Petitioner on
date 05.11.2015. A copy of the receipt dated 05.11.2015 of
the Payment of Penalty is annexed hereto and marked as
ANNEXURE-P11 [Pages_87-88].
i) Petitioner filed Application No. 35769 of 2015 under Section
482 of the Criminal Procedure Code before the High Court of
Allahabad seeking quashing of order dated 05.05.2015 passed
by Special Chief Judicial Magistrate, Varanasi in Case No. 765
of 2014 dated 05.05.2015. The present Application was
rejected without any pronouncement on the merits of the case
and the Hon’ble Court held:-
“Considering the facts of the case, without expressing
any opinion on the merits of the applicant’s case, this
application U/s 482 Cr.P.C. is finally disposed of with a
direction to the court below to decide Case No.1 of
2014, under section 104/135 Customs Act, P.S. Sima
Sulk Sonauli, District Maharajganj in accordance with
law without granting unnecessary adjournments to
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12 either of the parties as expeditiously as possible
preferably within a period of six months from the date
of production of certified copy of this order, if there is
no legal impediment.”
A copy of the order dated 22.12.2015 in Application under
Section 482 of CrPC numbered as 35769 of 2015 passed by
the High Court of Allahabad is annexed hereto and marked as
ANNEXURE-P12 [Pages_89-90].
j) Petitioner filed an Application dated 25.01.2016 for of
Compounding of Offence under Customs (Compounding of
Offences) Rules, 2005 in view of the ongoing prosecution
against the Petitioner by the Customs Authority, Lucknow at
Varanasi for possession/recovery of 4320 grams of gold of
foreign origin brought to India from Nepal. The Petitioner
prayed before the Chief Commissioner of Customs, Patna on
humanitarian grounds as his family was in bad financial
condition, and he requested for compounding so that the go
back to United Kingdom. A copy of the Application dated
25.01.2016 preferred by the petitioner to the Chief
Commissioner of Customs, Patna is annexed hereto and
marked as ANNEXURE-P13[Pages 91-93].
k) The Chief Commissioner of Customs, Patna responded to the
Application for Compounding by issuing a Show Cause Notice
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13 dated 04.10.2016 to the Petitioner to show cause as to why
his Application for Compounding should not be rejected. A
copy of the Show Cause Notice issued by the 2nd Respondent
to the petitioner dated 04.10.2016 is annexed hereto and
marked as ANNEXURE-P14[Pages 94-100].
l) Petitioner responded to the Show Cause notice dated
04.10.2016 vide his reply dated 06.10.2016 wherein he prayed
that his Application for compounding may not be rejected for
the reason:
“8.It is further submitted that the Notification No.
09/96- Cus dated 22.01.1996 as spelt out in the
Show Cause Notice for holding the goods as
"prohibited" for the purpose of sub-clause (ii) of
clause (c) of provisio to sub-section (3) of section
137 of the Customs Act, 1962, has been issued under
powers conferred under sub-section (1) of Section 11
of the Customs Act, 1962 and not under Section 5 of
the the Foreign Trade (Development and Regulation)
Act, 1992. Thus it may be appreciated that the case
of the applicant is not statutorily debarred from
compounding and hence should be allowed. It has
also been well settled by the Hon'ble Supreme Court
in the case of Pradip Nanjee Gala Vs. Sales Tax
Officer [2015-TIOL-95-SC-CT-LB], that in a taxing
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14 statute one has to look merely at what is clearly said
and there is no room for any intendment. Nothing is
to be read in, nothing is to be implied. One can fairly
look at the language used. Applying the said
principle, it is submitted that prohibitions under
Customs Act, 1962 cannot be held to be debarred
under sub-clause (ii) of clause (c) of proviso to sub-
section (3) of section 137 of the Customs Act, 1962,
for debarring the prohibition must be under the
specified provision of the Act. Therefore, it may be
appreciated that the case of applicant is not covered
under the said provision and hence his application of
compounding of offences must be allowed.”
A copy of the Petitioner’s reply to the show cause notice send
by the 2nd Respondent dated 06.10.2016 is annexed hereto
and marked as ANNEXURE-P15 [Pages_101-115].
m) Petitioner herein filed Writ Petition (Criminal) No. 1209 of
2016 before the High Court of Patna praying for:-
“To issue a writ in the nature of Mandamus
commanding theauthorities to allow the application
dated 25.01.2016 for compounding of offence under
Customs (Compounding of Offences) Rules, 2005.
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15 ii) To issue a writ in the nature of direction
commanding the authorities to release the Passport
of the petitioner.
iii) To grant any other relief or reliefs to which the
petitioner is entitled in the facts and circumstances
of the case.”
A copy of the Writ Petition (Criminal) No. 1209 of 2016 filed
by the petitioner before the High Court of Judicature at Patna
dated nil is annexed hereto and marked as ANNEXURE-P16
[Pages_116-144].
n) Chief Commissioner of Customs (Preventive) Zone, Patna
issued Order No. 01/Compounding/2017 dated 16.01.2017
wherein it was held that the Petitioner has failed to disclose all
the material facts in his application filed for compounding of
offence before the Compounding Authority. Disclosure was
found to be incomplete and inaccurate. Accordingly, the
Application for Compounding was rejected. A copy of the
Order No. 01/Compounding/2017 dated 16.01.2017 passed by
the 2nd Respondent is annexed hereto and marked as
ANNEXURE-P17[Pages_145-188].
o) Special Chief Judicial Magistrate, Varanasi vide his order dated
20.07.2017 has convicted the Petitioner herein under Section
135(1)(i) of Customs Act, 1962 in Criminal complaint No. 765
of 2014 and he was sentenced to undergo one year simple
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16 imprisonment and fine of Rs, 75,000/-. The Ld. Magistrate
held:-
“In the opinion of the court, on the basis of
evidence adduced on behalf of prosecution, charge
of offence under section 135(1)(i) Custom Act
proves against accused Deepak Bajaj beyond
doubt, therefore, accused Deepak Bajaj is liable to
be convicted for the offence punishable under
section 135(1)(i) Custom Act.
Accordingly, accused Deepak Bajaj is convicted
for the charge of offence punishable under section
135(1)(i) Custom Act in Criminal Complaint Case
No. 765/2014. Accused is on bail, having cancelled
his personal bond and surety bond, sureties are
discharged from their liabilities. Today accused is
present in court he be taken in judicial custody.
And would be heard on the quantum of sentence.
On hearing on the quantum of sentence and
perusal of file keeping in mind the circumstance
that accused is Non-Indian British citizen, on
account of seizing his passport in this case, he has
not been able to meet is family for the last more
than three years. Pashas not revealed any other
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17 criminal history or conviction of accused in any
case. Therefore, keeping in view the facts &
circumstances of the case, sentencing accused
Deepak Bajaj with simple imprisonment of one
year and fine of Rs. 75,000/- (Seventy five
thousand only) under section 135(1)(i) Custom Act
seems to be justifiable.”
A true translated copy of the order in Crl. Complaint Case No.
765/2014 of the Special Chief Judicial Magistrate, Varanasi
dated 20.07.2017 is annexed hereto and marked as
ANNEXURE-P18[Pages 189-210].
p) Hon’ble High Court of Patna vide its order dated 26.07.2017
rejected the prayer of the Petitioner in Writ Petition (Criminal)
No. 1209 of 2016 on the ground:-
“In my view, the referred case is not applicable in the
facts and circumstances of this case as no part of cause
of action arose within the territorial jurisdiction of this
Court and in the case of KUSUM (supra) also the
Hon’ble Apex Court had considered that cause of action
or part thereafter even a smallest part arisen within the
territorial jurisdiction of the High Court would be
sufficient to confer jurisdiction to entertain application
under Article 226 of the Constitution of India. In the
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18 present case no part of cause of action is within the
territorial jurisdiction of the court. Hence, the case
(supra) is not helping the petitioner.”
A copy of the judgment dated 26.07.2017 passed by the High
Court of Judicature at Patna in Crl. Writ Jurisdiction Case No.
1209 of 2016 is annexed hereto and marked as ANNEXURE-
P19 [Pages_211-218].
q) Court of Sessions Judge, Varanasi vide its order dated
11.08.2017 in Criminal Appeal No. 173 of 2017 stayed the
operation of the order dated 20.07.2017 in Criminal complaint
No. 765 of 2014 upto the extent that the Petitioner herein
deposits half the amount of fine that was imposed on the
Petitioner. The Petitioner was further released on bail vide this
order on furnishing a personal bond of Rs 25,000/-.
A copy of the order passed by the Court of Sessions Judge,
Varanasi dated 11.08.2017 in Criminal Appeal No. 173 of 2017
is annexed hereto and marked as ANNEXURE-P20
[Pages_219-221].
r) Petitioner sent an application dated 11.08.2017 to the
Commissioner of Customs, Lucknow requesting for the release
of his passport. The Commissioner of Customs vide his reply
dated 30.08.2017 rejected the Petitioner’s request for release
of his passport, Lucknow in view of the order dated
05.05.2017 passed by the Special Chief Judicial Magistrate,
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19 Varanasi in Criminal Complaint No. 765 of 2014. A Copy of the
Application preferred by the petitioner to the 2nd respondent
dated 11.08.2017 is annexed hereto and marked as
ANNEXURE-P21 [Pages_222-224_]. A true copy of the reply
of Commissioner of Customs, Lucknow to the petitioner dated
30.08.2017 is annexed hereto and marked as ANNEXURE-
P22 [Page 225].
s) The Petitioner is constrained to approach this Hon’ble Court
under Article 32 of the Constitution of India as his Rights
under Article 14, 19 and 21 of Constitution of India.
4. GROUNDS
A. It is submitted that Petitioner herein who is a British citizen,
consequently holds a British passport. The Special Chief
Judicial Magistrate, Varanasi for smuggling gold from Nepal to
India, has convicted him and sentenced him to undergo a
custody. Petitioner has served a custody of ten months as
well, however, the Petitioner has been deprived of his
passport on the ground that he will leave the country, which
will hamper the adjudication of the charges against him. It is
submitted that the Customs Authority at Varanasi has seized
the ‘foreign passport’ of the Petitioner without the authority of
law. It is the case of the Petitioner that in view of the passport
being seized without the authority of law, the same maybe
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20 released. The Petitioner seeks to challenge the seizure of his
passport before this Hon’ble Court on the basis that he is a
foreign passport holder and the Indian authorities such as
Customs Authorities as well as the Passport Authority under
the Passport Act, 1967 are not entitled by law to seize or
impound a foreign passport.
B. It is submitted that the present Writ Petition raises a
substantial question of law before this Hon’ble Court in as
much as the treatment of a foreign passport is absent from
the Indian law at present, in case the foreign passport holder
commits a crime on Indian soil. Indian law is silent on the
treatment of foreign passport in case the foreign passport
holder commits a crime. Therefore, the seizure of Petitioner’s
foreign passport is without the authority of law and hence
Article 21 is violated.
C. It is submitted that the Passports Act, 1967 in our humble
submission applies to passports issued under the Act, i.e.
Indian Passports. As per Section 2(b) of the Passports Act,
1967 reads as:
“(b) ‘passport’ means a passport issued or deemed
to have been issued under this act”
From a perusal of the abovementioned section it can be seen
that ‘passport’ means a passport issued under the Passports
Act, 1967. Petitioner’s passport does not fall into this category
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21 as it is a passport issued by the British Government.
Therefore, even the Passport Authority under the Passports
Act, 1967 cannot seize the foreign passport of the Petitioner.
Hence, at present there is no law governing the treatment of
foreign passports under Indian law. It is further submitted
that the only power available to Indian Authorities is only to
revoke the visa as per Passport Entry Into India Rules, 1950.
As per Rule 5A:
“5-A. Any diplomatic, consular or passport authority
referred to in Cl. (iv) or Cl. (iv-a) and Cl. (iv-b) of
Clause 5 may at any time and without assigning any
reason make an order that the endorsement by way of
visa made on a passport shall be of no effect and may
for this purpose require the production of the passport
before it and cancel the visa endorsement made
thereon.”
D. It is submitted that the de facto Petitioner’s passport has been
‘impounded’ by the Customs Authorities. Petitioner’s passport
has been lying in the custody of the Customs Authorities since
2014. As per the judgment of this Hon’ble Court in Suresh
Nanda v. CBI (2008) 3 SCC 674 it was held:
“7. Sub-section (3)(e) of Section 10 of the Act
provides for impounding of a passport if proceedings
in respect of an offence alleged to have been
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22 committed by the holder of the passport or travel
document are pending before a criminal court in India.
Thus, the Passport Authority has the power to
impound the passport under the Act. Section 102 CrPC
gives powers to the police officer to seize any property
which may be alleged or suspected to have been
stolen or which may be found under circumstances
which create suspicion of the commission of any
offence.
8. Sub-section (5) of Section 165 CrPC provides that
the copies of record made under sub-section (1) or
sub-section (3) shall forthwith be sent to the nearest
Magistrate empowered to take cognizance of the
offence whereas Section 104 CrPC authorises the court
to impound any document or thing produced before it
under the Code. Section 165 CrPC does not speak
about the passport which has been searched and
seized as in the present case. It does not speak about
the documents found in search, but copies of the
records prepared under sub-section (1) and sub-
section (3).
9. “Impound” means to keep in custody of the law.
There must be some distinct action which will show
that documents or things have been impounded.
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23 According to Oxford Dictionary “impound” means to
take legal or formal possession. In the present case,
the passport of the appellant is in possession of CBI
right from the date it has been seized by CBI. When
we read Section 104 CrPC and Section 10 of the Act
together, under CrPC, the court is empowered to
impound any document or thing produced before it
whereas the Act speaks specifically of impounding of
the passport.
10. Thus, the Act is a special Act relating to a matter
of passport, whereas Section 104 CrPC authorises the
court to impound document or thing produced before
it.
Where there is a special Act dealing with specific
subject, resort should be had to that Act instead of
general Act providing for the matter connected with
the specific Act. As the Passports Act is a special Act,
the rule that general provision should yield to the
specific provision is to be applied. (See Damji Valji
Shah v. LIC of India , Gobind Sugar Mills Ltd. v. State
of Bihar and Belsund Sugar Co. Ltd. v. State of Bihar).
11. The Act being a specific Act whereas Section 104
CrPC is a general provision for impounding any
document or thing, it shall prevail over that section in
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24 CrPC as regards the passport. Thus, by necessary
implication, the power of court to impound any
document or thing produced before it would exclude
passport.”
Further, Section 10(3) of the Passports Act, 1967 reads as;-
“10. Variation, impounding and revocation of
passport and travel documents.
(3) The passport authority may impound or cause to
be impounded or revoke a passport or travel
document,—
(a) If the passport authority is satisfied that the
holder of the passport or travel document is in
wrongful possession thereof;
(b) If the passport or travel document was obtained
by the suppression of material information or on the
basis of wrong information provided by the holder of
the passport or travel document or any other person
on his behalf:
Provided that if the holder of such passport obtains
another passport, the passport authority shall also
impound or cause to be impounded or revoke such
other passport.
Provided that if the holder of such passport obtains
another passport, the passport authority shall also
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25 impound or cause to be impounded or revoke such
other passport.]
(c) If the passport authority deems it necessary so to
do in the interests of the sovereignty and integrity of
India, the security of India, friendly relations of India
with any foreign country, or in the interests of the
general public;
(d) If the holder of the passport or travel document
has, at any time after the issue of the passport or
travel document, been convicted by a court in India
for any offence involving moral turpitude and
sentenced in respect thereof to imprisonment for not
less than two years;
(e) If proceedings in respect of an offence alleged to
have been committed by the holder of the passport
or travel document are pending before a criminal
court in India;
(f) If any of the conditions of the passport or travel
document has been contravened;
(g) If the holder of the passport or travel document
has failed to comply with a notice under sub-section
(1) requiring him to deliver up the same;
(h) If it is brought to the notice of the passport
authority that a warrant or summons for the
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26 appearance, or a warrant for the arrest, of the holder
of the passport or travel document has been issued
by a court under any law for the time being in force
or if an order prohibiting the departure from India of
the holder of the passport or other travel document
has been made by any such court and the passport
authority is satisfied that a warrant or summons has
been so issued or an order has been so made.”
From a perusal of the above, it is concluded that the
Petitioner’s passport has been impounded by the Customs
Authority without the authority of law. Further, only the
Passports Authority under the Passports Act, 1967 can
impound a passport. Consequently, the Customs Authority
does not have the right to impound an Indian Passport even.
In the present matter the Petitioner possesses a foreign
passport, by corollary the same cannot be impounded either.
The only authority as per the laws of this country that can
impound a passport is the Passport Authority that too those
which have been issued by them.
E. From a perusal of the abovementioned submissions, it can be
concluded that the Customs Authority and the Court lack the
power to impound a passport. Only the Passport Authority
established under the Passports Act, 1967 could impound a
passport. However, after a reading of Section 2(b) of the
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27 Passports Act, 1967 along with Section 10(3) it can be
concluded that even the Passport Authority can impound only
an Indian Passport. In our humble submission, the Passport
Authority also lacks the jurisdiction to impound a foreign
passport. In view of this predicament, it is submitted before
this Hon’ble Court that the question relating to impounding or
seizing of a foreign passport has not been dealt with under
Indian law. It is further submitted that Petitioner’s passport
has been seized without following the due process of law. It is
submitted that by corollary, in the absence of a law governing
the seizure and impounding of foreign passports, the
Petitioner’s passport has been seized without the authority of
law, amounting to violation of the rights of natural justice of
the Petitioner.
F. It is further submitted that the Petitioner’s right to personal
liberty under Article 21 of Constitution of India has been
violated, as his right to free movement has been restricted
without a procedure of law depriving him of such right. It has
been held by this Hon’ble court in Maneka Gandhi v. Union of
India (1978) 1 SCC 248 that:-
“The expression ‘Personal liberty’ in Article 21 is of
the widest amplitude and it covers a variety of rights
which go to constitute the personal liberty of man
and some of item have been raised to the status of
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28 distinct fundamental rights and given additional
protection under Article19. Now, it has been held by
this Court in Satwant Singh’s case (supra) that
‘Personal liberty’ and consequently no person can be
deprived of this right except according to procedure
prescribed by law. Prior to the enactment of the
Passport Act, 1967, there was no law regulating the
right of a person to go abroad and that was the
reason why the order of the Passport Officer refusing
to issue passport to the petitioner in Satwant Singh’s
case (supra) was struck down as invalid. It will be
seen at once from the language of Article 21 that the
protection it secures is a limited one. It safeguards
the right to go abroad against executive interference
which is not supported by law; and law here means
‘enacted law’ or ‘State law’ (vide A.K.Gopalan’s case).
Thus, no person can be deprived of his right to go
abroad unless there is a law made by the State
prescribing the procedure for so depriving him and
the deprivation is effected strictly in accordance with
such procedure. It was for this reason, in order to
comply with the requirement of Article 21”
G. It is further submitted that in the absence of a law governing
the seizure and impounding of foreign passport in India, the
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29 Petitioner’s right to present his case before the appropriate
Court has been taken away. Petitioner’s passport was seized
summarily as he was no opportunity to present his case as to
why his passport should not be seized.
PRAYER
In view of the aforesaid, it is most respectfully prayed that this
Hon’ble Court may be pleased to:-
(i) Issue appropriate writ in the nature of mandamus to the
respondents to release the passport of the Petitioner
(ii) Issue a writ in the nature of mandamus or any such
other writ direction or orders declaring that the Union of
India or the Customs authority has no authority to hold
back the passport of any foreign citizen and such seizure
would be violation of Article 14, 19 and 21 of the
Constitution of India , 1950 ,
(iii) to grant such other reliefs as may be prayed for and to
which this Hon’ble Court may deem just and necessary
in the facts and circumstances of the case.
AND FOR THIS ACT OF KINDNESS, THE PETITIONER AS IN DUTY
BOUND SHALL EVER PRAY.
DRAWN BY: Adv. Renjith B. Marar & Adv.Vasudha Gupta for M/s. Marar&Iyer FILED BY:
DRAWN ON: 05.09.2017 FILED ON: 22.09.2017
LAKSHMI N. KAIMAL ADVOCATE FOR THE PETITIONER
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30
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31
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32 ANNEXURE-P1
GOVERNMENT OF INDIA
MINISTRY OF FINANCE, DEPARTMENT OF REVENUE OFFICE OF THE ASSISTANT COMMISSIONER OF CUSTOMS
LAND CUSTOMS STATION, SONAULI, MAHARAJGANI
ARREST MEMO
1. NAME OF THE OFFENDER : Dipak Bajaj
2. FATHER’S NAME : Late Awat Ram Bajaj 3. CASTE : Hindu (Sindhi)
4. ADDRESS : H.No. 12,6-Flaxley Road, Modern, SM4 6 LJ, London (U.K)
5. OCCUPATION : Business at London 6. Nationality : British
7. PERSONAL DESCRIPTION : AGE :43 Years (Date of Birth- 04.06.1970 HEIGHT : 5-6”
BUILT : Robust COLOUR OF HAIR : Black
COLOR OF EYES : Black
COMPLEXION : Wheatish
INDETIFICATION MARK : Mole on the right forearm
8. NAME OF THE AREA WHERE :Land Customs Station, Sonauli
OFFENCE COMMITTED
9. NATURE OF OFFENCE : Smuggling of Foreign Origin Gold Weighing 4320 gm.
10. LEGAL PROVISION FOR: Section 104 of the Customs Act,
ARREST 1962.
11. NAME & DESIGNATION OF: Ajay Dixit, Commissioner,
THE OFFICER ORDERING : Customs (P) Commissionerate, ARREST : Lucknow
PLACE:: Land Customs Station, Sonauli, District-Maharajganj. DATE:: 03.04.2014
TIME:: 23.30 hrs.
(Kalpnath Ram)
INSPECTOR LCS, SONAULI
(ARRESTING OFFICER)
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33 PERFORMA FOR ARREST
SL POINTS BE COVERED DETAILS
01 Name of BOP/PS/Dist. CHQ Sonauli/
Sonauli/Maharajganj(UP)
02 Date and Time of seizure 02.04.2014 at 2030 hrs
03 Border Pillar No./Pipe
Where apprehended
At Main Gate Sonauli adjacent t
Border Pillai No.517/2
04 The planning part, on
whose intelligence input the
seizure has taken place.
On the intelligence of Sh.Mitul
Kumar, D/o Commandant, 1st
Bn Maharajganj (UP).
05 Was Co-Cooperation of any
other Police Force/Govt.
agencies sought in whole
process?
N/A
06 How exactly the process
was implemented i.e.
raid/Naka/Patrolling etc.
By Special Checking
07 No. of apprehended person
Brief background history of
apprehended person(s)
Dipak Bajaj, S/o. Lt. Awat Ram
Bajaj, age 43 Years, Address:-
6-Flaxely Road, Morden,
SM46LJ, London (UK)
08 To whom the seized items
have been handed over to.
Land Custom Office Sonauli,
Maharajganj (UP)
09 Whether any criminal case
had been registered, if yes
by which agency and under
what section.
Not yet.
10 Interrogation details Enclosed with Seizure Memo
11 The name of SSB personal
involved in the process
Sl/GD Raja Murad Ali
HC/GD Vijay Kumar
HC/GD Vijay Singh
CT/GD Uttam Gogoi
CT/GD Md. Waliur Rehman
CT/GD Adll Hussain
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34 CT/GD(F) Jyoti Giri
CT/GD(F) Anuradha Singh
12 Whether Commandant,
SHQ and FIR have given
any reward, is the unit in
charge recommending
rewards, to be given from
FHQ.
Not yet
Handed over by Taken over by
Sd/-
03.04.2017
//True copy//
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35 ANNEXURE-P2
Tel. No.9839633795
ESTIMATE
Tanish Jewelers
Opposite P.W.D., Thuthi Chowraha, Nautanwa
Dated: 03.04.2014
S.S.B. Sanauli.
Rate Rs.29250/-
1. Today dated 03.04.2014 at Border Site, Sanauli, S.S.B. Officer
tested & weighted Gold on electronic weighing machine on which
its purity established at 70%, weight came at 1964 gms, price Rs.
40,21,290/-(Rs. Forty lakh Twenty one thousand Two Hundred
Ninety) only.
2. Today dated 03.04.2014 at Border Site, Sanauli, S.S.B. Officer
tested & weighted Gold on electronic weighing machine on which
its purity established at 99.850%, weight came at 856 gms, price
Rs. 25,03,800/-/-(Rs. Twenty five lakh three thousand Eight
Hundred) only.
3. Today dated 03.04.2014 at Border Site, Sanauli, on calling by
S.S.B. Officer for testing & weighting Gold, Vinod Kumar Verma,
weighed & tested on electronic weighing machine:
(1) Pure Fine (2) Umicore
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36 1Kg 9999 Feingold
Birmingham 999.9, Weight 500 gms.
(U.K.) 18046
29,25,000/- 14,62,500/-
Total Rs. 43,87,500/-
(Rs. Forty three lakh Eighty seven thousand Five Hundred only).
Sd/-
//True Translated Copy//
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37 ANNEXURE-P3
Panchnama/Recovery Memo dated 03.04.2014
Names, address and other particulars of Panch:
1. Shri Vijay Madheshiya son of Shri Nandu Ram Madheshiya,
aged 24 years, occupation-service, resident of Village
Chhapwa, Post Nautanwa, District Mahrajganj.
2. Shri Randhir Singh son of late Parshuram Singh, aged 39
years, occupation –Service, resident of Ward No. 4,
Vishunpuri, Post Nautanwa, District Mahrajganj.
Today dated 03.04.2014 at about 15.30 Hrs. On calling by
officers of Customs Duty, Sonauli, we above-said Panch appeared at
the office of Customs Duty Post Sonauli. Officer gave us
understand that officers of Board Security Force have handed over
them foreign gold (Biscuit, coins & small granuals and Indian &
foreign currency) and one person through their Memo dated
03.04.2014. we panch are required as witnesses to the necessary
legal/departmental proceedings to be initiated by officers about it.
Therefore, officers requested to remain present as witness in the
above-said whole proceedings, which was accepted by we people
keeping in view the national interest. Therefore, officers called Shri
Vinod Kumar Verma M/s. Tanish Jewelers, Nautanwa, Mahrajganj by
making phone call for weighing & testing of gold handed over by
officers, who appeared in the Office of Custom Duty Post - Sonauli
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38 with is electronic weighing machine and other equipments.
Officers asked to carry out weighing and testing of foreign gold
handed over to them by S.S.B. On checking gold handed over by
officers Shri Vinod Kumar revealed that on calling by S.S.B. Officer
for testing on 03.04.2014 he had tested & weighted this gold. He
had issued weight and test receipt to S.S.B. Offices on 03.04.2014,
the particulars of which were as under:-
Sr.
No.
Particulars Quantity Weight Value
1 One gold Biscuit of
foreign oaring Purefine
1 Kg 999.9 Birmingham
(UK)
01
Biscuit
1000
gms
Rs.29,25,000/-
2 One gold Biscuit of
foreign origin UMICOE
999.9, 500gms 18046
01
Biscuit
500g,s Rs.14,62,500/-
3 Gold coins of foreign
origin (Krugerrand Fyn
Goud 10Z South Africa
(Purity 70%
58 (in
which
one coin
lying
cut)
1964
gms
Rs.40,21,290/-
4 Small gold granual
Purity8 99.850%
--- 856 gms Rs.25,03,800/-
Total 4320
gms.
Rs.109,12,590/-
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39
Thus, the weight & particulars of gold of foreign origin
handed over by S.S.B. was according to the particulars shown in
their memo. On asking by Officers whether the weighing machine
is correct, Shri Vinod Kumar Verma had said that on weighing gold
in this manner, there may be difference of half to one gram in each
time. On showing weight & test receipt available in papers
submitted by S.S.B. Officers, on asking about purity of recovered
gold, as to whether these are the test & weighing receipt, then he
said that these are the weight & test receipts which had been
issued to S.S.B. Offices on 03.04.2014.
In addition to above-said gold, SSB Officers handed over the
following-mentioned articles:-
1. Passport No. 511352051.
2. Handset Blackberry FCC No. L6RCN50UW with Battery and
one Nepali SIM.
3. Foreign Currency, Nepali & Indian Currency recovered,
particulars of which are as under :-
UK Pond 50x2=100, 20x18=360, 5x3=15 Total 475 Ponds,
equal to Indian Rs.47,951/-.
Nepali Currency 100x 3=300, 50x1=50,10x6=60 total 410 NC,
equal to Indian Rs. 256/-.
Indian Currency 500x 10=5000, 100x6=600, 20x1=20,
10x8=8-, Total 5700 IC.
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40 4. White color old cloth which was used in keeping gold biscuit
wrapped.
Thereafter officer inquired person handed over abut is name &
address, then he revealed his name Deepak Bajaj son of late
Awatram Bajaj, resident of 6, Flaxy Road, Modern S.M. 46, L.J.
London, U.K. officers carried out Jamatalashi of person handed
over Shri Deepak Bajaj and his belongings in the presence we
panch, in which three bills were recovered from the possession of
Deepak Bajaj, the details of which are as under:-
1. Bill concerning with purchase of gold Bar 500gms of Bullion
By Post – Order No.0214312 dated 31.03.2014.
2. Bill concerning with purchase of 1 Kg gold bar of Bullion By
Post- Order No.0208064 dated 25.02.2014.
3. Bill concerning with purchase of 1 Kg Fine of the Gold Purse
– Nol.0010727 dated 31.03.2014.
On interrogation by officers Shri Deepak Bajaj revealed that
he happens to be a British citizen, he has been running business in
U.K., name of his firm is Om Fashion Jewelry, which has been
engaged in the business of Fashion Jewelry, Bindi, Tattoo and
Purse. He had purchased gold recovered from his possession from
London (U.K.). Shri Bajaj expressed his satisfaction & consent with
the method of weighing gold recovered. He further revealed that
on 02.04.2014 when he was coming India from Nepal, then officers
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41 of S.S.B. stopped him at the Border and on checking, the above-said
gold recovered from his possession. On inquiring by officers Shri
Deepak Bajaj revealed that on reaching at Kathmandu Airport he
had not given declaration of above-said gold to Nepal Customs.
Shri Bajaj revealed that the above-said gold has been recovered
out of his jeans, coat and pockets of waist. He had hidden few coins
in his shoes.
Thereafter, on the basis of this reasonable belief that foreign
gold was being brought in India from London via Nepal through
smuggling in violation of provisions of notification No. 9/96-
CU(N.T.) dad 22.01.1996 issued under section 11, Customs Act,
1962, therefore, it is liable to acquisition under the provision of
section 11 of the Customs Act, 1962 and his old clothes and shoes
used in hiding the said gold are liable to be seized under the
provisions of Section 119 of the Customs Act, were seized by
Officers of Customs Post Sonauli at the Boarder under the
provisions of section 110 of the Customs Act. The above-mentioned
10 Indian currency notes of Rs. 500 denominations recovered from
the possession of Shri Bajaj, were seized by officers under
section 110 brining those in India amounts to violation of
provisions of guidelines issued by Reserve Bank of India. In
addition to this, all the Indian & Foreign Currency were returned to
him. Subsequently, passport, mobile phone etc. recovered from the
possession of Shri Bajaj were seized through a List Annexure “A”
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42 which is a part of this Panchnama and took in their possession for
further proceeding and investigation. Recovered gold was sale-
packed having kept in a packet and white cloth and shoes used in
hiding gold biscuits and coins were also seal-packed kept in an
another packet and 10 India currency notes of Rs. 500
denominations were seal-packed in an another place and took in
their possession which signatures of Shri Deepak Bajaj and officers
& we panch people put signatures. In addition to articles seized,
officers did not took any other article in their possession.
The above-said whole proceedings was completed peacefully
on 03.04.2015 at about 21.30 Hrs. During this proceeding officers
did not ill-treat Shri Deepak Bajaj in any manner whatsoever and
having been fully satisfied with the whole proceedings, we panch
are putting our signatures on it.
Signatures of party Sd/-
03.04.14
Signatures of officers
Sd/- Inspector
LCS Sonauli
Signatures of panch
Sd/
Sd/-
Annexure ”A”
List of articles of Shri Deepak Baja- 1. Passport No. 511352051
2. Handset Blackberry FCC No. L6ARCN70UW WIH Battery and one Nepali SIM.
Signatures of party Sd/-
03.04.14
Signatures of officers
Sd/-
Inspector LCS Sonauli
Signatures of panch
Sd/
Sd/-
//True Translated copy//
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43 ANNEXURE-P4
PERFORMA OF SEIZURE MEMO
SL POINTS BE COVERED DETAILS
01 Name of BOP/PS/Dist. CHQ
Sonauli/Sonauli/Maharajganj(UP)
02 Date and Time of seizure 02.04.2014 at 2030 hrs
03 Place of seizure including
Latitude and Longitude
At Main Gate Sonauli N-
27,28,26.1, E-83,28,28.5
04 Border Pillar No Adjecent to BP No.517/2
05 From where the items
were being smuggled and
whether from Nepal to
India or India to Nepal
Nepal of India
06 Distance of Border Pillar
from place of Seizure
Appx. 10 Meters from place of
seizure
07 Name and Distance of
Nearest Custom station
Land Custom office sonauli at a
distance of appx. 250 meters
from place of seizure.
08 The planning part, on
whose intelligence input
the seizure has taken
place.
On the intelligence of Sh.Mitul
Kumar, D/o Commandant, 1st 3n
Maharajganj (UP).
09 Was Co-Cooperation of any
other Police Force/Govt.
agencies sought in whole
process?
N/A
10 How exactly the process
was implemented i.e.
raid/Naka/Patrolling etc.
By Special Checking
11 Nature, description quality
and worth of the material
seized, whether it has
already been identified or
1. Golden Coins (Krugerrand FYN
GOUD 10Z Fine Gold South Africa)-Quantity-58 No.S. Weight-1.964 kg, Cost
Rs.40,22,290/-=
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44 waiting for test report 2. Gold Best Value Cast Bar
(Birmingham UK, Pure Fine)
(999.9)-01 kg, Cost Rs.29,25,000/-
3. Gold Best Value Cast Bar (Unicore Fine Gold No.18046)
(999.9)-500 Gram, Cost Rs.14,62,500/-
4. Small Golden Balls (Grilled)-
856 Gram, Cost Rs.25,03800/- Total Weight of Gold-4.320 Kg
(Total Cost Rs.10,91,2590
(Rupees One Crore Nine Lakhs
Twelve Thousand Five Hundred
Ninety Only)
12 To whom the seized items
have been handed over to.
Land Custom Office Sonauli
13 Whether any criminal case
had been registered, if yes
by which agency and
under what section.
Yes By Custom Authority.
14 Any people
arrested/interrogated
regarding the seizure
culprits, escaped, if any,
how information received
in preliminary
interrogation.
Dipak Bajaj S/o Lt.Awat Ram
Bajaj, Age-43 Years, Address:-
H.No.12,6-Flaxley Road,
Morden, SM46LJ, London
(United Kingdom).
15 The name of SSB
personnel involved in the
process
Sl/GD Raja Murad Ali
HC/GD Vijay Kumar
HC/GD Vijay Singh
CT/GD Uttam Gogoi
CT/GD Md. Waliur Rehman
CT/GD Adll Hussain
CT/GD(F) Jyoti Giri
CT/GD(F) Anuradha Singh
16 Whether Commandant,
SHQ and FIR have given
any reward, is the unit in
Not yet
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45 charge recommending
rewards, to be given from
FHQ.
17 Brief Note:- On dated 02.04.2014, special checking has
been conducted at Main Gate Sonauli by the personnel of
‘G’ Coy SSB Sonauli on the intelligence of Sh. Mitul Kumar,
Dy. Commandant 1st Bn Maharajganj (UP). During the
Checking a person was coming from: Nepal side on foot
and reached at Main Gate Sonauli where he has been
stopped by the checking party of 'G' Coy Sonauli 1st Bn
Maharajganj (UP) for checking purpose. During the
checking of person it has been found that some golden
coins were kept hidden in his right pent pocket. After that
he has been brought inside the campus of Main Gate
Sonauli for further checking where his body and belongings
has been searched and found that one Golden Bar was kept
hidden inside the pocket of his jacket wrapped in a white
cloth, another Golden Bar was kept hidden inside the back
Docket of his pent. After thoroughly checking of his body, it
has found that some small golden balls (grilled) packed in
transparent polythene, which were kept hidden inside his
under wear and some more golden coins were also found in
his socks. After that accused persons has been brought to
the Campus of 'G' Coy SSB Sonauli for preliminary
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46 investigation and total weight of Gold has been measured
as 4.320 Kg through Standard Electronic Weight Machine of
Tanish Jewellers of Nautanwa Market and purity of Gold has
also been recorded as 999.9 of Golden Bars by the Tanish
Jewellers. During investigation accused person identified
himself as Dipak Bajaj S/O Lt. Awat Ram Bajaj, Age- 43
Years, Address:- 6-Flaxley Road, Morden,SM46U, London
(UK). He revealed that on dated 25th February-2014, he
visited to the Showroom of "Bullion By post", Jewellery
Quarter Bullion Ltd., Floor-16, Centre City, 7 Hill Street,
Birmingham, B544A, London (UK), Tel. 01216348060, Fax-
8456436497, email. Sales @bullionbypost.co.uk, and
purchased 01 kg Gold Best Value Cast Bar 999.9 at the rate
of 26227 UK Ponds and paid online through his bank
account maintained at Barkley Bank London (UK) for the
purpose of his daughters marriage. On dated 31st March-
2014 he once again visited to the Showroom of Bullion By
Post and purchased 500 gram Gold Best Value Cast Bar
999.9 at the rate of 12724 Ponds. On the same day he
went to the Showroom or The Golden Purse, 39-
Northampton Street Hockley Birmingham, B186DU (United
Kingdom), Ph.+44(0)1212360072, +44(0)1212120184,
[email protected] and purchased the Golden
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47 Coins and he got small Golden Balls (Grilled) in exchange of
his old Jewellery. On dated 01.04.2014 he arranged air
tickets and boarded the flight or Qatar Airways from Hithro
Airport London at about 1600 hrs and reached at Doha
Airport on dated 02.04.2014 at about 0300 hrs. On the
same day he boarded the flight of Qatar Airway from Doha
Airport and reached at Kathmandu (Nepal) on the same day
at about 1100 hrs. After reaching at Kathmandu he hired a
private taxi up to Belahiya and paid him Rs.4000 in Nepali
Currency and in the way he visited pashupati Nath Temple
Kathmandu and finally reached at Belahiya at about 2000
hrs. After Belaniya he crossed international border at
Sonauli, but has been detained by the personnel of SSB
during checking along with gold. He further told that he is
working as an interpreter for British Government since last
13 years at London to translate Indian languages and earn
weekly 250 Ponds. He is associated with CIU as an
interpreter (Central Interpreter Unit) located at Loner
House Main Road High Street Crandon London (UK). He is
running Om Fashion Jewellery Shop, deaWng in Importers
and Wholesalers of Jewellery, Purses, Bindis, Bangles,
Tattoos and Hair Accessories Iocated at 54-Park Royal
Business Centre, 9-17 Park Royal Road, Acton, NW107LQ
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48 London (UK), [email protected] ,
www.omfashionjewellery.com, ph.No.02036387593,
07912622943. After successful introduce of gold into India
he had planned to visit Jhaweri Bazaar, New Delhi adjacent
to Gurdawara for making Jewellery for his daughters
marriage and to devote some Jewellery to his goddess
(Kuldevi) Khoriya Devi. After completion of all requisite
formalities the accused persons along with Gold has been
handed over to the Land Custom Office Sonauli for further
course of action.
Handed over by Taken over By
Sd/- Sd/-
Date: 05.04.2014
//True Copy//
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49 ANNEXURE-P5
Court No.-49
Case :- CRIMINAL MISC. BAIL APPLICATION No.-18322 of 2014
Application:- Deepak Bajaj
Opposite Party:- Union of India
Counsel for Applicant:- Ashutosh Tripathi,R R singh
Counsel for Opposite Party:- D.K.S. Raghuvanshi,A.G.A.
Hon’ble Pankaj Naqvi.J.
Supplementary affidavit filed today, is taken on record.
Heard Sri Ashutosh Tripathi, learned counsel for applicant Deepak
Bajaj, Shri B.K.S. Raghuvanshi, Advocate appearing on behalf of
Union of India (Customs), learned A.G.A. for the State and perused
the records.
It is submitted that applicant is innocent and has been falsely
implicated in this case by the customs officials due to the reason
that custom officials get reward in form of 20% value of goods
seized. It is further submitted that the applicant had bought the
gold in question in London, United Kingdom and was on way back
to Rajkot, Gujarat, where the marriage of his daughter was to take
place. It is further submitted that the maximum punishment
provided for the offence, allegedly committed by the applicant, is 7
years imprisonment and it is triable by the Magistrate. It is finally
contended that applicant does not have my previous criminal history
and is in jail since 3.4.2014.
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50 Learned counsel appearing on behalf of Customs has opposed the
prayer for bail on the ground that applicant has been caught red-
handed with the gold amounting to Rs. One Crore & Nine lacs.
Having regard to the facts and circumstances of the case, and
without expressing any opinion on the merits of the case, I am of
the opinion that the applicant- Deepak Bajaj may be enlarged on
bail.
Let the applicant:- Deepak Bajaj involved in Case no.1 of 2014,
under Sections 104/135 Customs Act, P.S..Sima Sulk, Sonauli,
District Maharajganj be enlarged on bail on his furnishing a personal
bond and two heavy sureties each in the like amount to the
satisfaction of the court concerned subject to the following
conditions:-
(i) The applicant will not misuse the liberty of bail and will
not repeat any such offence in near future.
(ii) The applicant shall not directly or indirectly make any
inducement or threat to any witness.
(iii) The applicant will not tamper with the evidence.
(iv) The applicant shall remain present in the court during
trial and shall cooperate in trial on each date fixed.
Order Date:- 28.1.2015
Chandra
AUTHENDTICATED COPY
SECTION OFFICER COMPUTERISED COPYING SECTION
HIGH COURT ALLAHABAD
//True copy//
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51 ANNEXURE-P6
02.03.2015
BRIEF FACTS OF THE CASE:-
On 03.04.2014 at about 15.10 hrs, the officials of SSB Sonauli vide
their recovery memo dated 03.04.2014 handed over one person
along with 4320 gram gold in the form of biscuits / coins / grilled
(granules), a British passport No. 511352051, Mobile handset
Blackberry FCC No. L6ARCN70UW with Battery and a Nepalese sim,
UK Pond 50x2=100, 20x18-360, 5x3=15, 10x6=60 Total 475 ponds
equivalent to Indian Rs.47951/-, Nepali Currency 100x3=300,
50x1=50, 10x6=60 Total 410 NC, equal into Indian Rs.256/- and
Indian Currency 500x10=5000, 100x6=600, 20x1=20, 10x8=80
Total Rs.5700
IC. As per SSB Memo, while conducting checking on 02.04.2014, the
SSB officials stopped a person coming from Nepal on foot. On
personal search of the person, namely, Shri Dipak Bajaj, one Gold
Bar [(PUREFINE 1KG 999.9 BIRMINGHAM (UK)] wrapped in a white
cloth hidden inside the pocket of his jacket/Coat, another Gold Bar
(UMICORE 999.9, 500gm. 18046) Kept hidden inside the back
pocket of his pant, gold granules (grilled) packed in transparent
polythene and kept in his vest(underwear) and 58 golden coins
(Krugerrand TYN GOUD 10z South Africa) Kept in his shoes and
right pocket of his pant were recovered. The recovered gold was got
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52 weighed and tested by the SSB officials from a local goldsmith M/s
Tanish Jewellers, Nautanwa Market, Nautanwa and total wight of
the aforesaid recovered gold was found as 4320 gram on standard
Electronic Weighing Machine. The purity of the gold bars was found
at 999.9% whereas the purity of gold coins was ascertained at 70%
and that of gold granules (grilled) at 99.850% by the said jeweler. A
certificate was also given by the said jeweler to this effect. The
value of the aforesaid recovered gold was ascertained at
Rs.1,09,12,590/- @ Rs.29,500/- per 10 grams by the jewelers as
per prevailing rate.
2. The Customs officers of Land Customs Station, Sonauli called
upon two independent witnesses, to witness the proceedings. In
presence of the said witnesses, the officers of Land Customs
Station, Sonauli called a local goldsmith, Shri Vinod Kumar of M/s
Tanish Jewellers, Nautanwa Market, Nautanwa to confirm the
weight and purity of the recovered gold bullion/coin/grilled items as
mentioned in SSB’s recovery memo dated 03.04.2014. On
weighment, one gold bar was found 1000 gms. while another was
of 500gms. The weight at 58 gold coins was found to be of 1964
gms. and that of gold granules (grilled) to be 856 gms. The purity of
the gold bars was found at 999.9% while purity of gold coins and
small golden balls (grilled) at 70% and 99.850% respectively. The
value of the said recovered gold was estimated at Rs.1,09,12,590/-
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53 by the said goldsmith at prevailing market price of gold
([email protected] ,500/-per 10 gms).
3. During interrogation, the accused confirmed his identify as Dipak
Bajaj, S/o Late Awat Ram Bajaj, Age 43 yrs. Address- 6 Flaxley
Road, Morden, SM46LJ, London (U.K.). During personal search of
Shri Dipak Bajaj by the afficials of L.C.S. Sonauli, three bills were
recovered from his possession relating to purchase of 500 grams
gold bar from M/s Bullion By Post vide bill order No. 0214312 dated
31.03.2014, 1kg gold bar form M/s Bullion By Post vide bill order no.
0208064 dated 25.02.2014 and 1kg Fine from M/s The Golden Purse
vide bill No.0010727 dated 31.03.2014.
4. Shri Dipak Bajaj in his statement recorded under section 107 of
the Customs Act, 1962 admitted that the aforesaid recovered gold
belonged to him which he had brought into India from UK via
Kathmandu (Nepal) to make jewellery for his family. He also
admitted that he had a bit knowledge that carrying foreign origin
gold from abroad into India via Nepal by a non resident India was
not allowed.
5. Therefore, on reasonable belief that the aforesaid recovered 4320
grams foreign origin gold (TCO) in the from UK via Nepal
contravening the provisions of the Notification No. 09/1996-Cus
dated 22.01.1996 issued under section 11 of the Customs Act, 1962
and thus liable to confiscation under Section 111 of the Customs
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54 Act, 1962 was seized under Section 110 of the Act ibid under
panchnama dated 03.04.2014 drawn on the spot. Further, the
aforesaid recovered 10 Indian Currency notes in the denomination
of Rs.500/- (total Indian Rs.5000/-) were also seized under section
110 of the Customs Act, 1962 under the same panchnama as the
same was smuggled into India contravening the provisions of
Notification No.FEMA 6/ RB-2000 dated 3.5.2000 issued under
Foreign Exchange Management (Export and import of Currency)
Regulations, 2000 by the Reserve Bank of India and were liable to
confiscation under section 111 of the Act ibid. Also, the goods used
for concealing of the aforesaid seized foreign origin gold etc, i.e.,
old cloth, shoes and socks were also seized under Section 110 of
the Customs Act 1962 under the same panchnama as the same
were liable to confiscation under section 119 of the customs Act,
1962. All aforesaid seized goods were sealed by the officers of LCS
in three packets and the accused and the independent witnesses
put their signatures in taken of their satisfaction over the manner of
the seizure. The rest of the Nepalese, U.K. and Indian currency
were returned to Shri Dipak Bajaj being not relevant to case.
6. Shri Dipak Bajaj in his statement dated 04.04.2014 recorded
under section 108 of the Customs Act, 1962 confirmed his version
recorded in his statement dated 03.04.2014 before the Customs
officer and admitted that the aforesaid seized gold was recovered
from the pocket of his jeans, coat/Jacket and vest(underwear) and
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55 that same of the said seized coins were kept in his shoes. He further
accepted that he had purchased the seized gold from UK and he
passessed the invoices for purchase of the same. He also informed
that he was a British national and was going to Gorakhpur via
Sonauli border to catch a train to New Delhi (India). He also
accepted that he had a bit knowledge that bringing gold from
abroad into India by a non resident is not allowed. On being asked
about the awareness of the land route from sonauli to Delhi, he
replied that a taxi driver guided him about the land route to New
Delhi. Shri Bajaj disclosed his educational qualification as “A Level”
in law equivalent to a law graduate in India and further stated that
he dealt in fashion jewelery, bindi, purse & tattoo in London with his
firm, M/s Fashion Jewellery, Shri Bajaj also stated that the aforesaid
seized foreign origin gold was recovered from his possession by the
SSB officers seized foreign origin gold was recovered from his also
stated that the aforesaid seized foreign origin gold was recovered
from his possession by the SSB officers of sonauli on 02.04.2014;
that he had not declared the aforesaid gold on his arrival at
Kathmandu Air Port; that he was going to Delhi with the aforesaid
seized foreign origin gold; that he had made payment for purchase
of the aforesaid foreign origin gold.
7. To verify the genuineness of the identify of Shri Bajaj, the
consulate office, British High Commission, New Delhi was requested
vide this office letter C. No.VIII(10)01/Seiz/SNL/2014-15/332 dated
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56 06.04.2014 for verification of the genuineness of the passport No.
511352051 issued to Shri Dipak Bajaj by the British Embassy. The
Consulate Officer, British High Commission, vide his letter reference
No. REF/CON14- IND865853 dated 25.04.2014 informed that there
was a record of the passport issued matching the details.
8. As evident from above, Shri Dipak Bajaj was indulged in
smuggling of the aforesaid seized foreign origin gold. Since the
offence committed by him was punishable under Section 135 of the
Customs Act, 1962 after he was arrested on 04.04.2014 under
section 104 of the Customs Act, 1962 after due permission of the
Commissioner, Customs Act, 1962 after due permission of the
Commissioner Customs (Preventive) Commissionerate, Lucknow
vide Arrest Memo dated 04.04.2014. A prosecution case was also
launched against him before the Hon’ble Court of Chief Judicial
Magistrate (Economic Offences) at Varanasi.
9. In view of the facts and circumstances as narrated above and as
evident from the records, it appears that the accused, Shri Dipak
Bajaj was knowingly and actively involved in the act smuggling of
the aforesaid seized 4320 grams foreign origin gold in the form of
bars, coins & balls (grilled) valued at Rs.1,09,12,590/- contravening
the provisions of the Notification No.09/1996 – Cus dated
22.01.1996 issued under section 11 of the Customs Act, 1962
rendering the same liable to confiscation under section 123 of the
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57 customs Act, 1962 and Shri Dipak Bajaj caught with the aforesaid
seized Foreign Origin Gold failed to prove the bonafide nature of the
goods and its legal import into India. In view of clear admission of
Shri Dipak Bajaj that he was actively involved in the act of
smuggling of gold in huge quantitiy, it appears, that the
commissions and omissions on the part of the said accused render
him liable for penal action section 112(i) of the Customs Act, 1962.
10. Accordingly, a notice to show cause was issued under
C.No.VIII(10)01-seiz/SNL/14-15 Dtd.27-08-2014 to Shri Dipak Bajaj
requiring therein to show cause to the Commissioner of Customs,
Customs (Preventive) Commissionerate, Lucknow, as to why:-
(i) The aforesaid 4320 grams seized foreign gold
biscuits/coins/grilled (granules) total valued at Rs.1,09,12,590/-
(Rupees One Crore, Nine lakhs, Twelve thousand, Five Hundred
Ninety only) Should not be confiscated under section 111(d) of the
Customs Act, 1962;
(ii) The aforesaid seized Indian currency of Rs.5000/- in the
denomination of Rs. 500/- each should not be confiscated under
sanction 11(d) of the Customs Act, 1962;
(iii) The aforesaid seized old white cloth, one pair of socks & shoes
valued at Nil Setting use in concealing the aforesaid seized gold
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58 should not be confiscated under Section 119 of the customs Act,
1962 and;
(iv) A penalty should not be imposed upon Shri Dipak Bajaj under
Section 112 of he Customs Act, 1962.
11. Further, vide corrigendum dated 09.12.2014 issued under C. No.
C.No.VIII(10)01-Seiz/SNL/14-15/1212 Dtd. 09.12.14 show cause
notice was made answerable to the Additional Commissioner of
Customs, Customs (Preventive Commissionerate Lucknow.
DEFENCE REPLY:
12. Shri Avneesh Pratap Singh, Advocate vide letter dtd. 27.9.2014
submitted that he is appointed counsel by the notice to defend his
case and wishes to be heard. Superintendent LCS Sonauli vide letter
C. No. VIII(10)01-Seiz/SNL/14-15/1990 Dtd.30.09.2014 furnished
the acknowledgement dtd. 02.09.2014 of service of show cause
notice upon the notice through the jailor, Dist.Jail Varansi.
To ensure Natural Justice in the case dates for personal
hearing were fixed for 08.01.15, 15.01.15 and 22.01.2015 and
communicated to the notice through the Jailor, Distt. Jail Varansi
and his counsel hearing. Shri Avneesh Pratap Singh, but none
appeared on the dates fixed for personal hearing. Shri Avneesh
Pratap Singh, Advocate vide letter dated 22.01.15 on behalf of the
notice requested adjournment for one month. Accordingly, personal
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59 hearing was fixed for 23.02.2015, but again neither notice nor the
counsel appeared to attend the personal hearing.
Shri Avneesh Pratap Sing, Advocate vide letter dated
22.02.2015, inter-alia submitted following reply to the show cause
notice-
i. That notice is British Citizen and owns Multiplex VISA. He
intended to visit India to get the jewelry prepared out of
some gold coins saved for his daughter’s marriage and gold
bought instantly. He visited Pashupati Nath Temple
Kathmandu and was arriving India by road but was
detained by the Border security officers before crossing the
border and implicated him in the case for getting
department reward.
ii. That he agrees to the facts regarding his address and the
bills for purchasing the gold are genuine.
iii. That he was not aware of the fact that bringing Gold from
Nepal into India is an offence and he was willing to pay the
duty leviable on the import of Gold.
iv. That he was not intended to smuggle the recovered Gold.
He nowhere mentioned that he wished to get profit by
selling the Gold.
v. That he used to travel India frequently and was never
indulged in the smuggling.
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60 vi. That there was no cavity in his shoes and in the interest of
justice seized Gold may be released on Redemption Fine.
vii. That he has no criminal record either in India or in Britain.
viii. That he is lodged in jail for 9-10 months and because of
this his family is going through financial hardship.
ix. Finally, it is prayed that he was not intended to smuggle
the gold. He wishes to compound the offences and will
soon file an application to this effect before the competent
authority. He is willing to pay Redemption fine, the show
cause notice may be withdrawn and the gold may be
released.
DISCUSSION AND FINDINGS:
13. I have carefully gone through the show cause notice, its relied
upon documents and other material facts available on record.
Following issues arise for decision by me:-
(i) Whether aforesaid 4320 grams seized foreign gold
biscuits/coins/grilled (granules) total valued at Rs.1,09,12,590/- is
liable to confiscation under section 111(d) of the Customs Act,
1962;
(ii) Whether aforesaid seized Indian currency of Rs.5000/- in the
denomination of Rs.500/- each is liable to confiscation under
sanction 111(d) of the Customs Act, 1962;
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61 (iii) Whether, aforesaid, seized old white cloth, one pair of socks &
shoes valued at Nil being used to conceal the aforesaid seized goods
is liable to confiscation under section 119 of the customs Act, 1962
and;
(iv) Whether penalty should be imposed upon Shri Dipak Bajaj
under Section 112 of the Customs Act, 1962.
14. Now, I proceed wise as under-
14.1 Confiscation of 4320 grams seized foreign gold
biscuits/coins/grilled (granules) total valued at Rs.1,09,12,590/-
From perusal of records I observe that while conducting checking on
02.04.2014, the SSB Officials stopped Shri Dipak Bajaj coming from
Nepal on foot and recovered one Gold Bar [(PUREFINE 1KG 999.9
BIRMINGHAM UK)] wrapped in a white cloth hidden inside the
pocket of his jacket/coat, another Gold Bar (UMICORE 999.9, 500
gm. 18046) Kept hidden inside the back pocket of his pant, gold
granules (grilled) packed in transparent polythene and kept in his
vest(underwear) and 58 golden coins (Krugerrand FYN GOUD 10z
South Africa) Kept in his shoes and right pocket of his pant. Shri
Dipak Bajaj in his statement dated 04.04.2014 recorded under
Section 108 of the Customs Act, 1962 admitted that the aforesaid
seized gold was recovered from the pocket of his jeans, jacket/coat
and vest (underwear) and that some of the said seized coins were
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62 kept in his shoes. He further accepted that he had purchased the
seized gold from UK and he possessed the invoices for purchase of
the same. Shri Bajaj disclosed his educational qualification as “A
Level” in law equivalent to a law graduate in India. He also accepted
that he had a bit knowledge that bringing gold from abroad into
India by a non resident is not allowed. Here, I would like to place
reliance on the judgment of Hon’ble supreme court pronounced in
the case of Commissioner of Central Excise Madras Vs. Systems and
components (P) Ltd. reported in 2004 (165)ELT 136 {SC}, wherein
it was held that ‘What is admitted need not to be proved.’
Since the notice has admitted that he was aware that import of gold
from Nepal into India by a non-resident is prohibited thus it
emerges that he was willingly attempting to import the gold
contrary to the provisions of the Customs Act, 1962. Ratio of above
judgment is squarely applicable in the instant case. His intention to
smuggle the gold is also corroborated from the fact that he had not
declared the aforesaid gold on his arrival at Kathmandu Air Port.
Further, recovery of Gold in the form of Coin/bar/granules
concealed in his shoes, Trousers, Jacket/Coat, vest(underwear)
itself indicates his lone intention to smuggle the Gold.
I further observe that the notice in his written defense has
submitted that he was willing to declare the gold but he was
detained by the officers of Border security before crossing the
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63 border and for sake of departmental reward he was falsely
implicated in the case. I however, find no gravity in this argument
as no such incident was reported by him in his statement recorded
under 107 and 108 of the customs, Act, 1962. Apart from it, I
observe that he never narrated this version earlier, either before the
departmental officers or at the time of investigation of the case,
thus I find it baseless and an afterthought.
I also find that Seciton 2(33) of the Customs Act, 1962 defines
prohibited goods’. It reads as follows:
“(33)” prohibited goods means any goods the import or export of
which is subject to any prohibition under this Act or any other law
for the time being in force but does not include any such goods in
respect of which the conditions subject to which the goods are
permitted to be imported or exported have been complied with”
Further Section 11 of the Customs, Act, 1962 empowers the Central
Government to prohibit either absolutely or subject to such
conditions to be fulfilled before or after clearance the import or
export of the goods of any specified direction by issuing a
notification in this behalf. The effect of interpretation of the words
“prohibited goods” was considered by the Hon’ble Apex Court in the
matter of OM Prakash Bhatia Vs. Commissioner of Customs
[2003(155)E.L.T 423] and the court held as follows:
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64 “10. From the aforesaid definition, it can be stated that (a) if there
is any prohibition of import or export of goods under the Act or any
other law for the time being in force, it would be considered to be
prohibited goods; and (b) this would not include any such goods in
respect of which the conditions, subject to which the goods are
imported or exported have been complied with. This would mean
that if the conditions prescribed for import or export of goods are
not complied with, it would be considered to be prohibited goods.
This would also be clear from section 11 which empowers the
Central Government to prohibit either absolutely or ‘subject’ to such
conditions to be fulfilled before or after clearance, as may be
specified in the notification, the import or export of the goods of any
specified description. The notification can be issued for the purposes
specified in sub-section [2] Hence, prohibition of importation or
exportation could be subject to certain prescribed conditions to be
fulfilled before or after clearance of goods. If clear by this court in
Sheikh Mohd. Omer Vs. CC (AIR 1971 SC 293] wherein it was
contended that the expression ‘prohibition’ used in section 111(d)
must be considered as a total prohibition and that the expression
does not bring within its fold the restrictions imposed by clause (3)
of the import Control Order, 1955. The court negatived the said
contention and held thus:-
“….What clause (d) of section 111 days is that any goods which are
imported or attempted to be imported contrary to Any prohibition
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65 imposed by any law for the time being in force in this country is
liable to be confiscated. “Any prohibition” referred to in that section
applies to every type of “prohibition”. That prohibition may be
complete or partial: Any restriction on import or export is to an
extent a prohibition. The expression “any prohibition” In section
111(d) of the Customs Act, 1962 includes restrictions. Merely
because section 3 of the Imports and Export (control) Act, 1947
uses three different expressions “prohibiting”, “restricting” or
“otherwise controlling”, we cannot cut down the amplitude of the
word “any prohibition” in section 111(d) of the Act. “Any
prohibition” means every prohibition. In other words all types of
prohibitions. Restriction is one type of probation”
On applying aforesaid judgment to the aforesaid notification
No.9/96-Customs dated 22.01.1996 import of TCO gold from Nepal
to India is prohibited and in view of meaning of the word
“prohibition” as construed / laid down by the Hon’ble Apex court in
the case cited supra, I hold that the seized gold is prohibited goods
and thus liable for confiscation under section 111(d) of the customs
Act, 1962.
As regards submission of the counsel for notice to release the seized
gold on deposit of redemption fine, I find that commissioner of
customs (AIR) Chennai-l has (through Civil Miscellaneous Appeal
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66 filed before Hon’ble court of Judicature at Madras) raised following
question of law:
“Whether in the facts and circumstance of the case, the Tribunal
was right in remanding the matter with a direction to the
commissioner to invoke the power under section 125 of the
Customs Act for redemption of the goods on payment of fine”
The Hon’ble Court vide its order dated 27.04.2009 [2009(247) E.L.T
21] held that goods were prohibited as the assessee did not belong
to category of persons who could bring gold at concessional rate of
duty and such goods had been imported in violation of import
(Control)order, 1955 read with section 3(i) of import and Export
Control Act, 1947. Therefore, Commissioner’s order or absolute
confiscation of goods was correct.
Hon’ble Supreme Court dismissing the petition filed by samynathan
Murugesan against aforesaid order, passed following order
[2010(254) E.L.T. A15]:
“Applying the ratio of judgment in the case of Om Prakash Bhatia V.
CC, Delhi reported in 2003 (155)E.L.T 423 (S.C), to the facts of the
case, we find that, in present case, the assessee i.e. the notices did
not fulfill the basic eligbility criteria, which makes the imported item
a prohibited goods; hence, we see no reason to interfere with
impugned order.”
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67 Aforesaid judgment are squarely applicable in the instant case as
Noticee has violated the provisions of Notification No.9/96-Customs
dated 22.01.1996 and gold was secreted by him in the form of
Bar/Coin/Gold grilled granules, thus, seized 4320 grams foreign
origin Gold totally valued at Rs.1,09,12,590/- is liable for absolute
confiscation.
14.2 Confiscation of Indian currency of Rs.5000/- in the
denomination of Rs.500/- I observed that sub section (ii) of Section
8 of the Notification No.FEMA 6/ RB- 2000 dated 03.05.2000 issued
under Foreign Exchange Management (Export and Import of
Currency) Regulations, 2000 imposes prohibition on export and
import to or from Nepal and Bhutan of Indian Currency into India
other than notes of denominations of above Rs.100/- In the instant
case, Indian currency amounting to Rs.5,000/- in the denomination
of Rs.500/- were imported by the notice from Nepal into India in
violation of the aforesaid Notification, I, therefore, hold the same
liable for confiscation.
14.3 Confiscation of old white cloth, one pair of socks & shoes
valued at Nil used in concealing the recovered Foreign Origin Gold-
I observe that as per Section 119 of the Customs Act, 1962- “ Any
goods used for concealing smuggled goods shall also be liable to
confiscation. In present case Foreign Origin Gold was concealed by
the notice in white cloth, one pair of Socks & Shoes valued at Nil
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68 used in concealing the recovered Foreign Origin Gold are liable to
confiscation under section 119 of the Customs Act, 1962.
14.4 Penalty upon Shri Dipak Bajaj under section 112 of the
Customs Act, 1962- His acts of Commission and omission have
already been discussed in para 14.1 above. His deliberate
indulgence in the smuggling of huge quantity of foreign origin gold
from Nepal into India to the tune of 4320 grams in the form of
Bar/Coin/Grilled Granules, totally valued at Rs.1,09,12,590/- is well
established. I am, therefore, inclined to impose penalty upon the
notice under section 112 of the customs Act, 1962.
15. Accordingly, I pass following order-
ORDER
i. I order for absolute confiscation of the 4320 grams foreign
origin Gold valued at Rs.1,09,12,590/- (Rupees One Crore
nine lakhs twelve thousand five hundred and ninety only)
under Section 111 (d) of the customs Act, 1962.
ii. I order for absolute confiscation of 10 Currency notes in the
denomination of Rs.500/- with face value of Rs.5000/-
under section 111 (d) of the Customs Act, 1962.
iii. I order for absolute confiscation of old white cloth, one pair
socks & shoes valued at Nil used for conceding the said
gold, under section 119 of the Customs Act, 1962.
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69 iv. I impose a penalty of Rs.25,00,000/- (Rupees Twenty Five
Lakhs only) upon Shri Dipak Bajaj Section 112 of the
Customs Act, 1962.
(K.P.SING)
ADDITIONAL COMMISSIONER
CUSTOMS LUCKNOW
To,
(1) Mr.Dipak Bajaj S/o Late Awat Ram Bajaj,
H.No.12, 6-Flaxley Road, Morden, SM46LJ, London (U.K)
(2) Guard File.
C. No. VIII(10)68-Adj/ADC/NTW/2014 Dated:
02.03.2015
Copy forwarded for information and necessary action to:-
1. The commissioner, Customs (P), Lucknow along with copy of
show cause Notice.
2. The Deputy Commissioner Customs (P) Division Nautanwa
3. The Superintendent (TRC) Customs (P) Commissionerate,
Lucknow.
4. Shri Avaneesh Pratab Singh, Advocate 94 Vindhyavansini
Colony Ardali Bazar, Varanasi
SUPERINTENDENT (ADJ.) CUSTOMS (P.) HDQRS,
LUCKNOW
//True Copy//
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70 ANNEXURE-P7
Before the Hon’ble Court of Special Chief Judicial Magistrate,
Varanasi
Union of India Vs. Deepak Bajaj etc.
U/s : 135, Customs Act.
Police Station -Customs Sonauli,
Mahrajganj
Application on behalf of Deepak Bajaj son of late Avatram
Bajaj, resident of House No. 12, 6, Flaxy Road, Modern S.M. 4, L.R.
London (U.K.) is submitted as under:-
1. That the applicant is on bail in the above-said case and
comply with the orders of the Hon’ble local court
scrupulously.
2. That Four Kg 300gms gold was seized from applicant in the
above-said case, which he had purchased through his Bank
and the said gold was his personal property, applicant is
initiating appropriate proceedings before the competent
officer for release of the same.
3. That after investigation in the above-said case, complaint has
been filed against applicant.
4. That after arrest, few personal articles were recovered from
the possession of applicant which have not been seized.
(a) Passport No. 511352051
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Page 71
71 (b) Handset Blackberry Fcc No.L6ARCN70UW with
battery & SIM.
© Indian Currency 500x 10, 100x6, 20x1, 10x8
personal articles.
5. That above-said articles are personal belongings of applicant
and Department has nothing to do with the above-said
articles & goods and nor the same have any concern with the
above-said case.
6. That in such situation, releasing the above-said articles of
applicant is necessary & justifiable.
7. That as & when court would call for the above-said articles,
applicant would produce in court.
8. That applicant is ready to file indemnity bond for superdgi of
the above-said articles.
9. That in such situation, releasing the said articles in favour of
applicant is necessary & justifiable.
Prayer
Therefore, it is humbly prayed before the Hon’ble Court hat
keeping in view the above-stated facts, the above-said articles may
kindly be released in favour of applicant, in the interest of justice.
Dated: 13.03.15 Sd/-
Applicant
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Page 72
72 Before the Hon’ble Court of Special Chief Judicial Magistrate,
Varanasi
Case No. Of
Union of India Vs. Deepak Bajaj etc.
U/s : 135, Customs Act.
Police Station -Customs Sonauli,
Mahrajganj
Affidavit
I, Deepak Bajaj son of late Avatram Bajaj, resident of House
No. 12, 6, Flaxy Road, Modern S.M. 4, L.R. London (U.K.) do hereby
solemnly affirm & state as under:-
1. That deponent is resident of above-stated address and is well
conversant with all the facts mentioned in the affidavit.
2. That the applicant is on bail in the above-said case and
comply with the orders of the Hon’ble local court scrupulously.
3. That Four Kg 300gms gold was seized from applicant in the
above-said case, which he had purchased through his Bank
and the said gold was his personal property, applicant is
initiating appropriate proceedings before the competent
officer for release of the same.
4. That after investigation in the above-said case, complaint has
been filed against applicant.
5. That after arrest, few personal articles were recovered from
the possession of applicant which have not been seized.
(a) Passport No. 511352051
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Page 73
73 (b) Handset Blackberry Fcc No.L6ARCN70UW with
battery & SIM.
(c) Indian Currency 500x 10, 100x6, 20x1, 10x8 personal
articles.
6. That above-said articles are personal belongings of applicant
and Department has nothing to do with the above-said articles
& goods and nor the same have any concern with the above-
said case.
7. That in such situation, releasing the above-said articles of
applicant is necessary & justifiable.
8. That as & when court would call for the above-said articles,
applicant would produce in court.
9. That applicant is ready to file indemnity bond for superdgi of
the above-said articles.
10. That in such situation, releasing the said articles in favour of
applicant is necessary & justifiable.
Sd/-
Deponent
Verification
I, the deponent, do hereby verify that all the contents of paras
No.1 to10 of the above-affidavit are true & correct to my personal
knowledge. Neither any false fact has been stated nor any fact has
been concealed therein. Verified in the Civil court Complex,
Varanasi.
Dated: 13.03.15 Sd/-
Deponent
//True Translated//
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Page 74
74 ANNEXURE-P8
Court of Special Chief Judicial Magistrate, Varanasi
Case No. 765/14
Union of India Vs. Deepak Bajaj
Section 135, Customs Act
Police Station Sonauli
Copy of order dated 05.05.2015
Dated: 05.05.2015
File put up. Appeared learned counsels for both parties.
Heard learned counsels for both parties on the applicator moved
by accused/applicant.
On behalf of applicant/accused Deepak Bajaj application duly
supported with affidavit has been moved to the effect that Four
Kilogram Three Hundred Twenty gram gold seized from him is his
personal gold which he had purchased. He has been initiating
proceedings before he competent officer about release of the same.
After consideration, complaint has been filed against him. after
arrest, few personal articles were recovered from the possession of
applicant which have not been seized viz. 1. Passport No.
511352051; 2. Handset Blackberry Fcc No.L6ARCN70UW with
battery & SIM. 3. Indian Currency 500x 10, 100x6, 20x1, 10x8
personal articles. The above-said articles are personal belongings of
applicant and Department has nothing to do with the above-said
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Page 75
75 articles & goods and nor the same have any concern with the
above-said case. Prayed for release of all the above-said articles in
his favour.
Heard & perused file. Applicant/accused Deepak Bajaj is on
bail in the present case. File is pending trial and statement of
witnesses is being recorded. 4 Kg 320 gms gold is stated to have
been recovered from the possession of acad. Subsequently,
passport, mobile handset with SIM & battery and Indian currency
has also been recovered from applicant/accused. Learned counsel
appeared on behalf of prosecution has contended that accused has
been released on bail. If passport is given to him then there are
very rare probability that he would comeback in India. Accused is a
foreign citizen. In such situation, once he goes out of India, his
appearance could not be possible and trial of court would affect
adversely. In the objection, no any objection has been stated
about releasing mobile handset with SIM & battery to applicant.
With regard to remaining case articles, it is stated that application
has been filed before the competent authority for release.
As applicant/accused is a foreign citizen. In case passport is
provided to him, there is absolute probability of fleeing away out of
the country due to which ensuring his appearance in the case
would not be possible. No any objection has been raised about
releasing remaining articles viz. Mobile handset with SIM & battery.
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Page 76
76 Therefore, releasing mobile handset with SIM & battery would be
justifiable. Application is disposed of accordingly.
Order
While allowing application dtd 13.03.15 filed by
applicant/accused Deepak Bajaj partly it is disposed of in the form
that Mobile handset Blackberry Fcc No. L6ARCN70UW with battery
& SIM be released in his favour on filing a surety in the sum of
Rs. 15,000/- and P.B. in the likewise amount and Undertaking to the
effect that on calling for mobile by court he would produce before
the court. Application about remaining case articled is rejected.
Application stands disposed of accordingly file be put up on
08.06.2015 for evidence.
Sd/-
(Mahender Srivastava)
Special Chief Judicial Magistrate Varanasi.
//True Translated Copy//
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Page 77
77 ANNEXURE-P9
Before the Hon’ble Court of District & Sessions Judge, Varanasi
Crl. Revision No. 213 of 2015
Deepak Bajaj son of late Avatram Bajaj, resident of House No. 12, 6, Flaxy Road, Modern S.M. 4, L.R. London (U.K.).
… Revisionist
Versus
1. Union of India
2. Shri Brijender Chaudhary, Assistant Commissioner, Customs
Duty, Nautanwa, Mahrajganj.
… Respondents
Revision against the order dated 15.05.2015 passed by Shri
Mahender Srivastava, Special Chief Judicial Magistrate, Varanasi in
Case No. 765/2014 Union of India versus Deepak Bajaj, under
section 135, Customs Act vide which having allowed application
partly, application for passport was rejected.
--------------------
Grounds of Revision
1. That order dated 15.05.2015 (05.05.15) passed by the court
below is contrary to the facts, evidence and bail orders, which
is liable to be set-aside.
2. That according to prosecution case, in brief, on 03.04.2014
officers of Customs Department called Panch and told that
officers of the Border Security Force handed over them
foreign gold biscuits, coins and small granuals, Indian and
foreign currency and one person vide their Memo dated
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Page 78
78 03.04.2014. thereafter, officers inquired name address of the
person handed over, who revealed his name as Deepak Bajaj.
Three bills relating to purchase of gold were recovered from
the possession of Deepak Bajaj. On inquiring by officers,
Deepak revealed that he happens to be a British citizen, he
has been running business in U.K. and name of his firm is Om
Fashion Jewelry. He had brought having purchased the gold
recovered from him from London, thereafter, officers of the
Customs Department, Sanauli took him under arrest under
Section 104, Customs Act on the basis of this reasonable
belief that gold handed over is foreign gold and Jeans, Coat &
Waist and few coins hidden in shoes were recovered from the
possession of Deepak Bajaj.
3. That the fact is that revisionist happens to be a British citizen
and applicant has got Multiplex Visa. Revisionist was coming
in India with coins gathered earlier for marriage of his
daughter and few coins purchased recently through bank for
getting manufactured ornaments because marriage of
daughter of revisionist had scheduled to have been
solemnized and he visited Mandir of Pashupati Nath in
Kathmandu for Darshan for this auspicious work and he
offered two small coins in Pashupati Nath Mandir in
Kanthmandu and he was coming from Kathmandu by taxi to
see the hilly beauty that before entering in the limits of
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Page 79
79 India, he was taken under arrest by the Border Security
Force. He kept on saying that he is to go to Immigration
Office and has to deposit his goods and to satiate requisite
custom duty, but applicant was not allowed to go back by not
believing on the averments of applicant. Border Security
Force handed over applicant/revisionist to Custom Officers
and revisionist revealed all the true facts before officers which
have been mentioned in Panchnama, but officers made him
accused with the intentions that they would get departmental
incentive & prize.
4. That applicant/revisionist has been enlarged bail and
revisionist has been complying with all the conditions of bail
and the very purpose behind bail is that applicant would not
terrorize witnesses in any manner and would not tamper
with evidence and would keep on representing his case.
Revisionist kept on complying with all the orders scrupulously.
5. That there is one more purpose behind enlarging bail that
revisionist/applicant may go to his family and because he
happens to be the head of the family and all the financial
sources depend on him only and business of applicant is
suffering loss and family is suffering huge loss on account of
not getting money family and applicant/ revisionist is under
mental depression due to not meeting with family for the last
about 14-15 months.
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Page 80
80 6. That court below had restrained him from going to England
by making observations that he is foreigner and his return is
not certain, while he has got business and his family, he has
been deprived of meeting is family for the last about 15
months, while has not got any place to stay in India, he is
becoming more & more indebted day by day8. Neither has got
any work and he was deprived of meeting is family members
which is violation of bail orders.
7. That revisionist was coming India legally and he was coming
by road and not through any passage hiding himself, he
wanted to pay custom duty and formalities, but before
reaching in the Immigration Officer, Border Security Force
took him under arrest.
8. That revisionist/applicant kept on appearing in court and
complying with orders of the Hon’ble Court scrupulously.
9. That revisionist is a foreigner and his business is established
abroad, is business is ruining and his family is starving and he
could not meet with his children for about 14 months.
10. That revisionists is foreigner and appeal about release of
above-said gold is pending before the Commissioner and any
person who was coming India in legal manner, purchased gold
legally then why would he leave his gold.
11. That above-said gold belongs to revisionist which has been
purchased by him leally.
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Page 81
81 12. That Hon’ble court below did not release passport of
revisionist because his appearance in court is not possible
which is contrary to rules because if applicant/revisionist is
foreigner, then naturally, he would go to his home and court
has released on bail for it and revisionist has been complying
and in future also, he would comply with conditions
stipulated by the Hon’ble High Court scrupulously.
13. That in such situation setting-aside order passed by the
Hon’ble court below is necessary & justifiable and order of the
court below is contrary to the principle of natural justice,
which is unconstitutional.
14. That in the interest of justice, having called for file of the
court below, peruse the same and while setting-aside the
judgment of the court below, allowing revision of revisionist is
necessary & justifiable.
PRAYER
Therefore, it is prayed before the Hon’ble Court that in the
interest of justice, having called for file of the court below, peruse
the same and while setting-aside the judgment of the court below,
revision of revisionist may kindly be allowed, in the interest of
justice.
Dated: 04.06.2015 Sd/- Revisionist
Through : Sd/-
Counsel
///True Translated Copy//
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Page 82
82 ANNEXURE-P10
Court of Additional Session Judge, Court No.9, Varanasi
Presiding Office –Shri Vikas Saxena, H.J.S
Criminal Revision No. 213 of 2015
Deepak Bajaj son of late Avatram Bajaj, resident of House No. 12,
6, Flaxy Road, Modern S.M. 4, L.R. London (U.K.).
… Revisionist
Versus
1. Union of India
2. Shri Brijender Chaudhary, Assistant Commissioner, Customs
Duty, Nautanwa, Mahrajganj.
… Respondents
Judgment
This Criminal Revision has been made on behalf of revisionist
Deepak Bajaj against the order dated 15.05.2015 passed by Shri
Mahender Srivastava, Special Chief Judicial Magistrate, Varanasi in
Case No. 765/2014 Union of India versus Deepak Bajaj, under
section 135, Customs Act vide which having allowed application
partly, application for passport was rejected.
The submissions of the revisionist, in brief, are that the order
dated 15.05.2015 (05.05.15) passed by the court below is contrary
to the facts, evidence and bail orders. The prosecution case, in
brief, is that on 03.04.2014 officers of Customs Department called
Panch and told that officers of the Border Security Force handed
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Page 83
83 over them foreign gold biscuits, coins and small granuals, Indian
and foreign currency and one person vide their Memo dated
03.04.2014. thereafter, officers inquired name address of the
person handed over, who revealed his name as Deepak Bajaj.
Three bills relating to purchase of gold were recovered from the
possession of Deepak Bajaj. On inquiring by officers, Deepak
revealed that he happens to be a British citizen, he has been
running business in U.K. and name of his firm is Om Fashion
Jewelry. He further revealed that he has brought gold having
purchased from him from London, thereafter, officers of the
Customs Department, Sanauli took him under arrest under Section
104, Customs Act and during is Jamatalashi, coins were recovered
hidden in Jeans, Coat & shoes.
Learned counsel for revisionist has submitted that he
happens to be a British citizen and he has got Multiplex Visa.
Revisionist was coming in India with coins gathered earlier for
marriage of his daughter and few coins purchased recently
through bank for getting manufactured ornaments because
marriage of daughter of revisionist had scheduled to have been
solemnized and he visited Mandir of Pashupati Nath in Kathmandu
for Darshan for this auspicious work and he offered two small
coins in Pashupati Nath Mandir in Kanthmandu and he was coming
from Kathmandu by taxi to see the hilly beauty that before entering
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Page 84
84 in the limits of India, he was taken under arrest by the Border
Security Force. He kept on saying that he is to go to Immigration
Office and has to deposit his goods and to satiate requisite custom
duty, but instead of believing on the averments of revisionist he
was handed over to Custom Officers and was made accused.
Revisionist has further submitted that he is on sanctioned bail
and he has been complying with all the conditions of bail and he
has become victim of depression due staying away from his family
for the last about 14-15 months & business of revisionist has also
been incurring losses. Court below has restrained him from going
to England by making observations that he is foreigner and his
return is not certain, while he has got business and his family, he
has been deprived of meeting his family for the last about 15
months. Revisionist has further submitted that he was coming
India legally and he was coming by road and not through any
hidden passage. He would keep on appearing on the orders of the
court and would abide by orders. It has also been submitted that
is business sis establish abroad, on account of this reason, his whole
business is going to ruin and is family is starving. Revisionist was
coming India in lawful manner and he had purchased gold in legal
manner. On the above-stated ground, prayed for allowing revision
and to set-aside the order of the court below.
Heard learned counsel for revisionist and perused the file of
court below.
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Page 85
85 Learned counsel for revisionist contended that incident
occurred on 03.04.2014 and despite allowing bail to revisionist, he is
unable to go to England to meet his family in the absence of
passport, resultantly he has become victim of depression and his
business etc. is also suffering heavily.
Learned counsel for respondent contended that file is
pending before court below in evidence that if revisionist renders
cooperation having appeared before the court below himself, then
case may be disposed of quickly. Learned counsel for respondent
has further contended that in case accused goes to his home in
England, he would not return and disposal of the case would get
delayed unnecessarily.
Learned counsel for revisionist contended that more than 4
Kg gold is seized by respondents from the possession of revisionist,
the value of which is more than One Crore. The said gold
exclusively belong to revisionist, how can he flee away leaving the
said gold.
Perused the file of the court below.
On perusal of file of court below it is evident that 4320 gms
pure gold has been recovered from the possession of
revisionist/accused, market price of which is stated Rs. One Crore
Nine Lakh Twelve thousand Five Hundred Ninety. Recovery of gold
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Page 86
86 in such huge quantity from the possession of revisionist shows that
he has been engaged in business of gold. Learned Magistrate did
not release passport of revisionist taking this ground in impugned
order that revisionist a foreign citizen and there is absolute
probability of fleeing away abroad and after leaving, ensuring his
appearance would not be possible. I do fully coincide with said
order of the learned Magistrate that court below has passed
justifiable order keeping in view the facts & circumstances of the
case, which does not require any kind of interference.
Order
Criminal Revision is dismissed. Order dated 05.05.2015 passed
by the learned Magistrate is confirmed.
File be returned to learned court below without delay where
revisionist is to appear on 26.08.2015.
Dated: 22.08.2015 Sd/-
(Vikas Saxena) Additional Session Judge
Court No. 9, Varanasi
Judgment has been pronounced today in open court duly
signed & dated.
Dated: 22.08.2015 Sd/- (Vikas Saxena)
Additional Session Judge Court No. 9, Varanasi
//True Translated Copy//
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Page 87
87 ANNEXURE-P11
6/TR6 (037) No. 2
[Treasury Rule 92] Challan No. 40166946
Accounting Commissionerate/Office
STATE BANK OF INDIA SONAULI BRANCH
Challan of Account Paid into the A/c. No. 11103238391 PAO Customs & Central Excise
Commissionerate State Bank of India at Sonauli Branch (6364)
Lucknow
Focal Point Bank-SBI M.G. Narg 24 Halwasia Count [LC 05]
Hazratganj: Lucknow BSR Coad No. 00649 Division-Nautanwa
Name and address of the Assessee/Remitter:
Shri Dipak Bajaj S/o. Late Awat Ram Bajaj
R/o. H.No. 12, 6-Flaxley Road, Morden, SM46LJ, London U.K.
Code No. LC - 0605
By/Whom tendred: Inspector, Customs (Preventive) Div. Nautanwa
Full particulars of the
remittance and authority
if any
HEAD OF ACCOUNT/ Major
Head 037-CUSTOMS
(indicate below
the appropriate Head from the
list on the reverse
Amount tendered Counter Signature
of the Depart-mental
Officer (where
required)
By cassh By
Cheque/ Draft
Pay order etc
Rs. Ps Rs. Ps
Personal Penalty
imposed vide O.I.O. No.
23/2015 dated
02.03.2015 passed by
Shir.K.P.Singh,
1.Redemption Fine (iv)
2500000 Seal Sd/-
5.11.15 2.Personal Penalty (iv)
0
3. Cash Security
(iv)
0
4. Sale proceed
(ii)
0
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Page 88
88 ADC Customs
(P)
Commissioner Luncknow
0
0
0
0
Total 2500000
Date: 05.11.2015 (Rupees Twenty five lakh Only) Signature of the
Sd/-
Signature of the authorized Officer of the Bank Name of the Branch
//True Copy//
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Page 89
89 ANNEXURE-P12
Court No.-53
Case:-APPLICATION U/S 482 No.-35769 of 2015
Applicant :- Deepak Bajaj
Opposite Party :- Union of India Thuru Asstt.Commissioner of
Customs Mahrajganj
Counsel for Applicant:- Rajiv Ratn Singh
Counsel for Opposite Party:- Bijendra Kumar Singh
Hon’ble Ramesh Sinha.J.
Supplementary affidavit has been filed by learned counsel for the
applicant and compliance affidavit has been filed by opposite party
which are taken on record.
Heard Sri. R.R.Singh, learned counsel for the applicant, Sri Sanjay
Kumar Singh, learned counsel for Union of India and Sri.R.K.Maurya,
learned A.G.A. for the state.
This application under Section 482 Cr.P.C. has been filed for
quashing the order dated 5.5.2015 passed by Special C.J.M.,
Varanasi in Case No.765 of 2014 and order dated 22.8.2015 passed
by Special Session Judge, Varanasi in Criminal Revision No.213 of
2015.
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Page 90
90 Learned counsel for the applicant submits that the applicant is
citizen of England and he had come to India to attend the marriage
of his relative but he was falsely implicated under the Customs Act.
Learned counsel for the applicant also undertakes to cooperate with
the trial. He further submitted that the applicant may allow to go
abroad and his Passport may be handed over to him.
Learned counsel for Union of India pointed out that discharge
application has been filed by the applicant which is pending and the
applicant is taking adjournment continuously. He submitted that if
the applicant is allow to go abroad then the trial would be delayed
and hampered.
Considering the facts of the case, without expressing any opinion on
the merits of the applicant’s case, this application U/s 482 Cr.P.C. is
finally disposed of with a direction to the court below to decide Case
No.1 of 2014, under section 104/135 Customs Act, P.S. Sima Sulk
Sonauli, District Maharajganj in accordance with law without
granting unnecessary adjournments to either of the parties as
expeditiously as possible preferably within a period of six months
from the date of production of certified copy of this order, if there is
no legal impediment.
Order Dated: 22.12.2015
Manoj
//True Copy//
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Page 91
91 ANNEXURE-P13
25.01.16
To,
The Chief Commissioner of Customs
Patna Zone Central Revenue Building B.C. Patel Path ,
Patna – 800001
Respect Sir,
Subject :- Submission of application of compounding of offence by
Dipak Bajaj R/o H.No. 12, 6-Flaxley Road, Modern,
SM46U, London (U.K.) under Customs (Compounding of
Offences) Rules 2005.
Respectfully, the applicant begs to enclose herewith application for
compounding of offence along with brief facts of the case and
relevant documents.
2. He also begs to submit that the application for compounding of
offence is submitted in view of the prosecution launched against the
applicant by the Commissioner Customs (Prev.) Lucknow before the
Court of Hon'ble Chief Judicial Magistrate (Economic Offences) at
Varanasi for possession/recovery of 4320 grams of gold of foreign
origin brought to India from U.K. via Nepal.
3. The recovered and seized gold weighing 4320 grams has been
confiscated by the Additional Commissioner Customs Lucknow and
penalty of Rs. 25,00,000/- imposed upon the applicant under Order
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Page 92
92 No. 23/2015 dated 02.03.2015, has been deposited} by the
applicant.
4. The applicant is presently on bail granted by the Hon'ble High
Court Allahabad on 29.01.2015.
5 The applicant is a British National having passport no. 511352051
and is engaged in the business of imitation jewelry having a shop
viz Om Fashion Jewelry, Park Royal Business Cenire, Action,
London, U.K. which is now closed after the arrest of the applicant
on 04.04.2014 and the applicant is incurring a lot of liabilities on the
inventory of the goods stored in his shop.
6. Wife of the applicant is a British National and is under going
through acute mental depression since the arrest of the applicant
and his 3 children- daughter aged 23 years, two sons aged 14 &
18 years are also under acute mental trauma and the whole family
is in financial mess and almost on the verge of starvation.
7. The applicant has managed to deposit penalty by borrowing
money from his friends and relatives and has thus incurred a huge
liability upon in.
It is, therefore, humbly requested that the application of the
applicant for compounding of offence may kindly be sympathetically
considered on humanitarian grounds so that he can go back to his
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Page 93
93 country to save his family from being ruined on account of
miserable financial condition.
Thanking you,
Yours sincerely,
(Dipak Bajaj)
S/o Late Awat Ram Bajaj
H.No. 12, 6-Flaxley Road, Modern
SM46U, London (U.K.)
End.:
Application for compounding of offence in duplicate
along with enclosures.
//True copy//
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Page 94
94 ANNEXURE-P14
GOVERNMENT OF INDIA
OFFICE OF THE CHIEF COMMISSIONER OF CUSTOMS
(PREVENTIVE) ZONE, PATNA
4TH FLOOR. C.R. BUILDING. BIRCHAND PATEL PATH.
PATNA-800001
[email protected] Fax: 0612-2504770
C.No. VIII (48)09-Compounding offence/CCO/CUS/T/2016/246970
Dated:04.10.2016
To,
Shri Dipak Bajaj,
S/o late Awat Ram Bajaj,
(i) H.No. 126-Flaxely Road, Morden,
SM46 LJ,London (U.K.)
(ii) C/o Dushyant Kumar (Consultant)
19/849, Ring Road, Indira Nagar,
Lunknow-226 016
NOTICE TO SHOW CAUSE
Whereas it appears that Shri Dipak Bajaj, S/o late Awat Ram Bajaj,
H.No.12, 6-Flaxely Road, Modern, SM46 U, London (U.K.) was
Intercepted by the officials of SSB at Sonauli on 02.04.2014 and
recovered gold in different forms from his packets of jacket/coat
and pants, underwear and socks total weighing 4320 gms of 3rd
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Page 95
95 country origin (U.K.) and Indian currency of Rs.5,000/-. The officers
of SSB, Sonauli handed over the recovered gold to the officers of
LCS Sonauli on 03.04.2014. On reasonable belief that the said
recovered gold was being smuggled into India from U.K. via Nepal
contravening the provisions of Notification No. 9/96-Cus dated
22.01.1996 issued under Section 11 of the Customs Act, 1962 and
thus liable for confiscation under Sections 111 & 119 of the Customs
Act' 1962, the officers of LCS Sonauli seized the said gold and
Indian currency of Rs.5,000/- and old white cloth, one. Pair of socks
and shoes under Section 110 of the Customs Act' 1962. Accordingly
a show cause notice was issued to him on 27.08.2014.
2. Whereas it appears that Vide O-in-0 No. 23/2015 dated
02.03.2015 the Adjudicating Authority i.e. Additional Commissioner,
Customs Lucknow has ordered for absolute confiscation of the
seized gold weighing 4320 gms. Valued at Rs.1,09,12,590/- and
Indian Rs5,000/- under Section lll (d) and also absolute confiscation
of old white cloth, one pair of socks and shoes under Section 119 of
the Customs Act' 1962 and also imposed a penalty of Rs.25,00,000/-
under Section 112 of the Customs Act' 1962 upon Shri Dipak Bajaj.
3. Whereas it appears that since, the offence committed by Shri
Dipak Bajaj was punishable under Section 135 of the Customs Act'
1962 hence, he was arrested under Section 104 of the Customs Act'
1962 by the order of the Competent Authority on 04.04.2014.
Prosecution was launched against him before the Hon'ble Court of
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Page 96
96 Chief Judicial Magistrate (Economic Offence) at Varanasi on
27.05.2014. Presently, Shri Bajaj is on bail as granted by the
Hon'ble High Court, Allahabad on 29.01.2015.
4. Whereas it appears that Shri Bajaj filed an application dated
25.01.2016 for compounding offence under Section 137 (3) of the
Customs Act, 1962 read with Rule 3 of the Customs (Compounding
of Offences) Rules, 2005.
5. Whereas it appears that as per rule 2 (e) of the Customs
(Compounding of Offences) Rules, 2005, a report, in this regard,
was called from the Reporting Authority i.e. Commissioner of
Customs (Prev.) Lucknow. The Reporting Authority vide his letters
dated 08.07.2016 and 19.08.2016 informed that as per the inputs
received at his end, Sri Dipak Bajaj is still indirectly indulged in the
smuggling activities and after re-examining the matter and seeing
the gravity & magnitude of the offence and its adverse impact on
the financial health of the country necessitating his prosecution
under Customs Act' 1962, he opined that compounding of offences
committed by the accused in the instant case should not be allowed.
6. Whereas it appears that the import of 3rd country origin gold
from Nepal, is prohibited vide Notification No. 9/96-Cus dated
22.01.1996. The Notification No. 9/96 dated 22.01.1996 is as
under:-
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Page 97
97 "In exercise of the powers conferred by sub-section (l) of Section 11
of the Customs Act, 1962(52 of 1962) and in supersession of the
Notification No. 76/F.No.80/83/65-LCI, dated the 19th June, 1965,
published in the Gazette of India vide No. GSR 848, dated the 19th
June, 1965, the Central Government, being satisfied- that for the
prevention of smuggling it is necessary so to do, hereby prohibits
the import from Nepal to India of goods which have been exported
to Nepal from countries other than India:
Provided that machinery and equipment used in Nepal for the
execution of a project may be allowed to be imported into India
from Nepal after completion of the project subject to the following
conditions namely:-
(i) The importer produces a certificate from the Indian Embassy
Kathmandu, that the machinery and equipment have in fact been
used for a period of one year for the execution of the project in
Nepal;
(ii) The project has been financed by an Agency of the United
Nations or the International Bank for Reconstruction and
Development Association or the Asian Development Bank or any
other multilateral agency or the Government of India; and
(iii) The importer had obtained the permission from the Reserve
Bank of India for import of the machinery and equipment into Nepal
for taking up work in the project in Nepal, if so required"
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Page 98
98 While it appears that the gold, under seizure, has conclusively been
proved to be of 3rd country origin and accordingly absolutely
confiscated. Section 137 (3) (C)(ii) of the Customs Act' 1962 clearly
envisages that nothing contained in this sub-section shall apply to a
person involved in smuggling of "Goods which are specified as
prohibited items for import and export in the ITC (HS) Classification
of Export and Import Items of the Foreign Trade Policy, as amended
fron, time to time, issued under section 5 of the Foreign Trade
(Development and Regulation) Act, 1992". Also, the compounding
cannot be claimed as a matter of right. In view of the contravention
of Notification No. 9/96 dated 22.01.1996 read with Section 137(3)
of the Customs Act' 1962 by the applicant as stated above, his
application for compounding of offence is liable to be rejected.
7. Whereas it appears that the applicant has failed to disclose all
the material facts in his application filed for compounding of offence
before the Compounding Authority. The applicant also filed an
application before Hon'ble CESTAT, Allahabad, in this regard. But
the same has not been disclosed by the applicant in his application
dated 25.01.2016, filed for compounding of offence under Customs
(Compounding of Offences) Rules, 2005 before the Compounding
Authority or later on. In the case of UOI Vs. Anil Channa (2008)
(222 ELT481 SC) the Hon'ble Supreme Court held that the basic rule
of disclosure underlying Section 137 (3) of the Customs Act' 1962, is
that if there are demonstrable contradictions or inconsistencies or
Bar & Bench (www.barandbench.com)
Page 99
99 incompleteness in the case of applicant, the application for
compounding cannot be entertained. The application for
compounding ought to be disallowed if there are such contradictions
or inconsistencies or incompleteness. The present case is fully
covered by aforesaid judgment of Hon'ble Supreme Court.
8. Whereas it appears that the applicant has already filed an
application before Hon'ble CESTAT, Allahabad for seeking judicial
remedy and also filed application for compounding of offence under
Customs (Compounding of Offences) Rules, 2005. Both facilities
cannot be availed together.
9. Now, Shri Dipak Bajaj, S/o late Awat Ram Bajaj, H.No. 12, 6-
Flaxeiy Road, Modern, SM46 U, London (U.K.) is hereby called upon
to show cause to the Chief Commissioner Customs (Prev.) Zone
Patna, 4th floor. Central Revenue Building, Birchand Patel Path,
Patna-1 within 30 days of the receipt of this notice as to why his
application seeking for compounding of offence under Customs
(Compounding of Offences) Rules, 2005, should not be rejected
under sub-rule 3 of Rule 4 of Customs (Compounding of Offences)
Rules, 2005.
10. He should also clearly state in his reply to the show cause
notice whether he desires to be heard in person or through his legal
representative before the Compounding Authority. In case no reply
is received within the stipulated date and no such request for
personal hearing is made or in case he does not appear before the
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Page 100
100 Compounding Authority on the date and time as fixed without any
sufficient cause the case will be decided ex-parte on the basis of
available records without making any further reference.
11. This show cause notice is issued on the basis of available
evidence without prejudice to any other action that may be taken
against the person mentioned in this show cause notice under the
Customs Act, 1962 or any other law for the time being in force.
12. The department reserves the right to amend, modify or
supplement this notice at any time on the basis of further evidence
prior to decide the case.
13. This issues with the approval of the Chief Commissioner.
Joint Commissioner
Customs (Prev.) Zone, Patna
//True Copy//
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Page 101
101 ANNEXURE-P15
BEFORE THE CHIEF COMMISSIONER OF CUSTOMS ( PREVENTIVE)
ZONE, PATNA
IN THE MATTER OF SHOW CAUSE NOTICE ISSUED UNDER C. NO.
Vlll (48) 09-COMPOUND1NG OFFENCE/CCO/CUS/T/2016 DATED
04.10.2016
Respectfully the applicant Shri Dipak Bajaj, resident of house no. 12,
6-FIaxiey Road, Modern, SM46LJ, London (UK), begs to submit the
reply to the Show Cause Notice issued under C. NO. VIII (48) 09-
Compounding oflfcncc/CCO/CUS/T/2.016 dated 04.10.2016 for
rejection of application for compounding of offence under section
137(3) of Customs Act, 1962 read with Rule 4(3) of Customs
(Compounding of offences) Rules, ZOOS.
Brief facts of the case:-
1. The applicant Dipak Bajaj son of Lt. Awat Ram Bajaj, resident
of house no. 12, 6-Flaxley Road, Modern, SM46LJ, London (UK),
holder of British passport np.511352051, while coming from Nepal
on 02.04.2014 was stopped by the Officers of SSB Sonauli
(Nautanwa District-Maharajganj) for checking and during the course
of his personal search 4320 gms of gold totally valued at
Rs.1,09,12,590/- was found along with following goods and foreign
currency:-
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Page 102
102 a. Foreign currency total 475 pounds;
b. Nepali currency 410 ;
c. Indian currency lls.5700/-;
d. Passport No. 511352051;
e. Handset Blackberry (FCC No.L6ARCN70UW); and Nepali SIM-1;
2. After completion of necessary formalities the applicant along
with gold and currency etc., was handed over by SSB to the Officers
of Land Customs Station Sonauli on 03.04.2014 for further action.
Thereafter statements of applicant were recorded under Section 107
and 108 of the Customs Act, 1962, on 03.04.2014 and 04.04.2014.
The applicant had also produced the bills/invoices of purchase of
recovered gold from Birmingham (UK) which were issued in his own
name bearing nos. 0214312 dated 31.03.2014 for 500 gms gold ;
0208064 dated 25.02.2014 for one kg gold and 0010727 dated
31.03.2014 for one kg gold.
3. The customs Officers of LCS Sonauli seized the above gold and
foreign currency under Section 110 of the Customs Act, 1962. The
applicant was thereafter arrested under Section 104 of the Customs
Act, 1962 on 04.04.2014 and was produced before the Chief judicial
Magistrate, Varanasi, who sent him to the judicial custody up to
27.05.2014. Subsequently prosecution was sanctioned and launched
against the applicant by the Commissioner Customs (prev.)
Lucknow.
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Page 103
103 4. The applicant was released on bail by the Hon'ble High Court
All 29.01.2015 under the order for Criminal Misc. Bail Application
No. 2014.
5. The applicant was also issued a Show Cause Notice dated
27.08.2014 when he was lodged in District jail Varanasi and the
case was adjudicated by the Additional Commissioner Customs
Lucknow, vide Order No. 23/2015 dated 02.03.2015,under which
4320 gms of gold along with foreign currency was ordered for
absolute confiscation and a penalty of Rs.25,00,000/- was imposed
upon him. Thereafter the applicant deposited the adjudged penalty
of Rs.25,00,000/- on 05.11.2015 vide challan no. 2(40166946).
6. Since the prosecution was already ordered to be launched in
the present case by the Commissioner Customs (prev.), Lucknow,
the applicant filed an application for compounding of offence under
Rule 3 of the Customs (Compounding of Offences) Rules, 2005, vide
his application dated 25.01.2016. The copies of documents referred
above were also annexed as Annexure Al to A12 of the said
application.
7. Now the applicant is in receipt of a Show Cause Notice issued
under C. NO. VIII (48) 09-Compounding offence/CCO/CUS/T/2016
dated 04.10.2016 which was received in person at Patna when the
applicant personally visited Office of the Chief Commissioner
Customs (preventive) Zone situated at Patna to enquire about the
fate of his application dated 25.01.2016. The said Show Cause
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Page 104
104 Notice has been issued for rejection of the application dated
25.01.2016 of the applicant allegedly on the following grounds:-
(i) The reporting authority in his letters dated 08.07.2016 and
19.08.2016 informed the Chief Commissioner that as per the
inputs received at his end Shri Dipak Baja is still indirectly
indulged in the smuggling activity and after re-examining the
matter and seeing the gravity and magnitude of the offence and its
adverse impact on the financial health of the country necessitating
his prosecution under the Customs Act, 1962, has opined that
compounding of offences committed by the accused in the instant
case should not be allowed.
(ii) The goods allegedly illegally imported by the applicant is
prohibited under Notification No. 09/96-CUS dated 22.01.1996
and thereby debarring the applicant for compounding under sub-
clause (ii) of clause (c) of provisio to sub-section (3) of section 137
of the Customs Act, 1962.
(iii) The applicant has not disclosed the fact of appeal filed by him
before the CESTAT Allahabad against the order of adjudicating
authority bearing no. 23/2015 dated 02.03.2015 in his application
dated 25.01.2016 for compounding of offences before the
Compounding Authority. The said act of applicant allegedly
amounts to demonstrable contradiction or inconsistencies or
incompleteness of the application and therefore the compounding
cannot be entertained in terms of the decision of Supreme Court in
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Page 105
105 case of Union of India vs. Anil Chanana. [2000(222) 1SL.T 481
(SC)J. (iv) Since the applicant has already filed the appeal against
the order-in original dated 02.03.2015 before Hon'ble CESTAT
Allahabad for seeking judicial remedy and also filed the application
for compounding of offence under the Customs (Compunding of
Offences) Rules, 2005, he is not eligible for both the facilities.
Submission:-
1. The applicant most respectfully and humbly begs to submit
that the aforesaid Show Cause Notice for rejection of application of
compounding of offence has been issued on assumptions and
presumptions without appreciating the facts and mis-appreciating
the law and therefore is bad in law.
2. The applicant has submitted his application on 25.01.2016 and
the Show Cause Notice for rejection has been issued on 04.10.2016,
after elapse of period of more than eight months. The CBEC while
introduction of compounding scheme has issued elaborate
guidelines for considering the matter of compounding y the
compounding authority vide Circular No. 54/2005-Cus dated
30,12.2005. In the said Circular CBEC has delineated the very
purpose f compounding as to prevent litigation and encourage early
settlement of disputes. In the said Circular the offences have been
classified into technical and substantive offences under the Customs
Act, 1962. Offences under Section 135 and 135(A) of the Customs
Act, 1962, have been classified as substantive offence and in such
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Page 106
106 cases the guidelines are that the compounding should be allowed
once. It is submitted that the offence committed by the applicant is
alleged to be in the nature of those specified at Section 135 and
hence applicant's claim for compounding must be considered
positively keeping in view the purpose of compounding under the
Customs Act.
3. The Circular no. 54/2005 dated 30.12.2005 issued by CBEC
referred above at para 7 delineates the time limit under which the
compounding authority is expected to dispose of the application. It
says, "the applications for compounding of offences must be
disposed off within six months". In the present case the time limit of
six months has not been adhered to and a Show Cause Notice for
rejection of application for compounding of application has been
issued after eight months that too on flimsy grounds which is bad in
law and also barred by limitation. It is well settled that Circulars
issued by the Department are binding on the Departmental Officers.
And in the present case the time limit as prescribed in the said
Circular for disposing off the said application has not been adhered
to by the Department and the said Show Cause Notice needs to be
withdrawn on the ground of the limitation itself.
4. The CBEC Circular No. 54/2005-cus dated 30.12.2005 at para
6 also provides for intimating the assessees the offer of
compounding of offences at the time of initiating action for
launching of prosecution. However in this case no intimation of such
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Page 107
107 kind was received by the applicant and the prosecution proceedings
were initiated which is nothing but defeat of the very purpose of
compounding scheme under the Customs Act, 1962.
5. It is also submitted that the power to grant compounding
under Section 137(3) of the Customs Act,1962, is a statutory
obligation and should be decided in a systematized manner within
the reasonable time and with due care and diligence. However in
the present case the processes and time limit prescribed by CBEC in
the Circular no. 54/2005 dated 30.12.2005 has not been followed
and the Show Cause Notice needs to be withdrawn on this ground
alone. In the case of V. Shreeharan alias Murugan vs. Union of India
[2014 4 SCC 242] and Shatrughan Chauhan vs. Union of India
[2014 3 SCC 1], the Supreme Court while deciding the delay in
action on mercy petition has held that the right to seek mercy under
Article 72/161 of the Constitution of India is a constitutional right
and is not dependent at the discretion and whims of the executive.
Every constitutional duty must be fulfilled with due care and
diligence. The fact that no time limit is prescribed to the President/
Governor for disposal of mercy petition to work in a more
systematized manner to repose the confidence of people in the
institution of democracy. Drawing analogy from the said judgment
of the Hon'ble Apex Court it is submitted that the right to seek
compounding under the Customs Act, 1962, is a statutory right and
the authority must act with due care and diligence and within
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Page 108
108 reasonable time which is prescribed within the Circular itself. Not
binding to the said time limit debars the impugned Show Cause
Notice by limitation and must be withdrawn.
6. It is also well settled by Hon'ble Supreme Court in the case of
M/s Paper Products Ltd Vs. CCE [1999 (112) ELT 765 (SC)] that all
actions of the revenue department must be consistent with the
Circulars which was in force at relevant point. Hence, it is submitted
that keeping in view the essence of Circular No 54/2005-Cus dated
30.12.2005, the application of compounding by the applicant should
be allowed.
7. Another ground alleged by the Compounding Authority for
rejection of compounding is that the goods allegedly smuggled by
the applicant is prohibited goods and therefore the applicant is
debarred from compounding of offences in the instant case by
virtue of sub-clause (ii) of clause (c) of provisio to sub-section (3) of
section 137 of the Customs Act, 1962. for the sake of easy
reference it is submitted that the said provision reads "goods which
are specified as prohibited items for import and export in the ITC
(IIS) Classification of Export and Import Items of the Foreign Trade
Policy, as amended from time to time, issued under section 5 of the
Foreign Trade (Development and Regulation) Act, 1992 (22 of
1992)". On plain reading of the said provision it can be appreciated
that the compounding under this provision is prohibited for the
goods which arc specified as "prohibited" under ITC (HS) list for
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Page 109
109 import and export under Foreign Trade Policy issued under Section
5 of the Foreign Trade (Development and Regulation) Act, 1992 and
not under the Customs law for time being in force. It is re-iterated
that gold falling under Tariff Heading 71001300 is expressed as
"free" under the aforesaid list and therefore the case of applicant is
not debarred For compounding under the said provision.
8. It is further submitted that the Notification No. 09/96- Cus
dated 22.01.1996 as spelt out in the Show Cause Notice for holding
the goods as "prohibited" for the purpose of sub-clause (ii) of clause
(c) of provisio to sub-section (3) of section 137 of the Customs Act,
1962, has been issued under powers conferred under sub-section
(1) of Section 11 of the Customs Act, 1962 and not under Section 5
of the the Foreign Trade (Development and Regulation) Act, 1992.
Thus it may be appreciated that the case of the applicant is not
statutorily debarred from compounding and hence should be
allowed. It has also been well settled by the Hon'ble Supreme Court
in the case of Pradip Nanjee Gala Vs. Sales Tax Officer [2015-TIOL-
95-SC-CT-LB], that in a taxing statute one has to look merely at
what is clearly said and there is no room for any intendment.
Nothing is to be read in, nothing is to be implied. One can fairly look
at the language used. Applying the said principle, it is submitted
that prohibitions under Customs Act, 1962 cannot be held to be
debarred under sub-clause (ii) of clause (c) of provisio to subsection
(3) of section 137 of the Customs Act, 1962, for debarring the
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Page 110
110 prohibition must be under the specified provision of the Act.
Therefore, it may be appreciated that the case of applicant is not
covered under the said provision and hence his application of
compounding of offences must be allowed.
9. Further it is submitted that the maxim "Expressum facit
cessare taciturn" (meaning where there is express mention of
certain things than anything which is not mentioned is excluded) as
upheld by Hon'ble Supreme Court in the case of U0I Vs. Tulsidas
Pate! [1985 3 SCC -'98] as a system of logic and common sense is
rightly applicable in the present case and therefore the case of
applicant cannot be held to be debarred form compounding of
offences under sub-clause (ii) of clause (c) of provisio to sub-section
(3) of section 137 of the Customs Act, 1962, as alleged in the Show
Cause Notice.
10. The Show Cause Notice also alleges that the applicant has not
disclosed the fact of appeal filed by him before the CESTAT
Allahabad against the order of adjudicating authority bearing no.
23/2015 dated 02.03.2015 in his application dated 25.01.2016 for
compounding of offences before the Compounding Authority. The
said nr. of applicant allegedly amounts to demonstrable
contradiction or inconsistencies or incompleteness of the application
and therefore the compounding cannot be entertained in terms of
the decision of Supreme Court in case of Union of India vs. Anil
Chanana [2008(222) ELT 481 (SC)]. In this regard it is submitted
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Page 111
111 that the applicant has filed the application for Compounding of
Offence in the form prescribed under Rule 3 of the Customs
(Compounding of Offence) Rules 2005 and has furnished all the
particulars as required by the said form. It may be appreciated that
there is no column in the said form which requires such information
nor the provisions governing the Compounding of Offences under
the Customs Act, 1962 requires anything of this sort. Moreover, the
fact of filing of appeal before Hon'ble CESTAT Allahabad is not a
clandestine activity. It is indeed a statutory proceeding and the
department is kept informed of all the matters pertaining to such
facts by way of intimations or notices, and also given chance of
being heard. It is on record that the applicant has filed the
application for compounding of offences is on 25.01.2016 whereas
the appeal before CESTAT, Allahabad has been filed on 19.04.2016.
Thus the sard allegation of the department cannot be regarded as
demonstrable inconsistency or incompleteness in filing of application
before the Compounding Authority, so as to debar the applicant
from compounding of offences. The decision of 110! Vs Anil
Chanana was again considered in the case of Deepesh Mamodia Vs
Chief Commissioner of Customs (DZ) [2014 (3080 ELT 34 (Del.)] by
the Hon'ble High Court, Delhi wherein it was held that the power of
compounding under Section 137 (3) of the Customs Act, 1962 is
wide and the exclusions are well enumerated therein. For applying
the Rule of Disclosure, there must be demonstrable and substantive
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Page 112
112 contradiction and not the technical omissions. These aspects have
to be looked on facts and circumstances of each case. In the
present case the applicant has paid the entire amounts confirmed
by the 0rder4n-0riginal and is ready to pay the Compounding fees,
and his case is not debarred by other exclusions spelt out in the
statue. Therefore, it is submitted that the case of the applicant
merits consideration and the compounding should be allowed in his
case.
11. Regarding the allegation in the Show Cause Notice that, since
the applicant has already filed an appeal before Hon'ble CESTAT,
Allahabad for judicial remedy, his application cannot be allowed for
compounding, it is submitted that the appeal has been filed before
CESTAT Allahabad for the civil liability under the Customs Act, 1962
and the application for compounding is given for settlement of
criminal liability under the said Act. It is well settled that both the
liabilities run independent of each other and have to be weighed in
terms of defined offences and penalties. Appeal has been filed
before CESTAT, Allahabad under statutory right conferred by the
Customs Act, 1962 after complying with the specified provisions and
the same has nothing to do with the filing application for
compounding of offences. It is also submitted that filing of appeal
before CESTAT is not spelt out as a exclusion for compounding
under provisio to sub-section (3) of Section 137 of the Customs Act,
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Page 113
113 1962. Therefore, it is prayed that the application for compounding
of offence by the applicant should be allowed.
12. It is further alleged in the Show Cause Notice that the
reporting authority in his letters dated 08.07.2016 and 19.08.2016
informed the Chief Commissioner that as per the inputs received at
his end Shri Dipak 13ajaj is still indirectly indulged in the smuggling
activity and after re-examining the matter and seeing the gravity
and magnitude of the offence and its adverse impact on the
financial health of the country necessitating his prosecution under
the Customs Act, 1962, has opined that compounding of offences
committed by the accused in the instant case should not be allowed.
In this regard, it is submitted that the said allegations are based on
assumptions and presumptions and do not hold water in the eyes of
law. The applicant is a person of 46 years old, has been mentally
disturbed since the time he was arrested on 04.04.2014, has
already been in jail for almost ten months when he was released on
bail. His passport has been seized because of which he cannot go
home as he is a British citizen, his family has taken a shape of
broken home. The applicant neither has the capacity nor the ability
or the means to indulge into such activities. Therefore the said
allegations are vehemently denied. The Show Cause Notice
Authority has neither enumerated any evidence nor provided any
evidence based on which such opinions were formed, and hence the
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Page 114
114 said charges must be held to without any basis and the application
of the applicant for compounding of offences should be allowed.
13. Further, it is also submitted that the above said allegations are
not only baseless but also extra-statutory. The Reporting Authority
is expected to furnish his report "with reference to the particulars
furnished in the application or any matter considered relevant for
examination of application". There is no provision under Rule 4 (1)
of the Customs (Compounding of Offence) Rules 2005 for furnishing
opinions by the Reporting Authority, that too after re-examining the
matter, and further to cause biasness in the minds of the
Compounding Authority. Thus, it is submitted that the Show Case
Notice issued on aforesaid grounds needs to be withdrawn merely
on the grounds of biasness and being baseless.
14. Without prejudice to what has been submitted above, it is
further submitted that there is no bar for compounding the first
offence even where it is of substantive nature as spelt out at clause
(a) and (d) of provisio sub-section (3) of Section 137 of the Customs
Act, 1962, and hence the application for compounding of offence by
the applicant should be allowed.
Prayer:-
15. In view of submissions made above, the applicant would like
to pray humbly that the Ld. Authority may like to refrain from
rejection of application made under the above rules or may like to
pass such orders as deemed fit in the circumstances of the case.
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Page 115
115 16. The Ld. Authority may like to appreciate the fact that the
applicant has suffered a lot so far in this case and it has ruined his
family life and business prospect and he is stranded in India for
such a long time. This has resulted into mental agony and further
lead to mental depression for which the applicant is under medical
treatment and consultation. Therefore, the applicant prays the
Hon'ble authority would take a compassionate view and grant
personal hearing in the case at the earliest. The applicant would feel
highly obliged if P.M. is fixed on 07.10.2016 since the applicant is
available by this date in Patna.
17. The applicant has authorized Shri Vimal Choudhary
Superintendent (Retd.), Central Excise & Service Tax, Patna to
represent his case before the competent authority and the
authorization is enclosed herewith.
Place :- Patna (Name & Signature of the applicant)
Date:- 06.10.2016 (Dipak Bajaj
//True Copy//
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Page 116
116 ANNEXURE-P16
IN THE HIGH COURT OF JUDICATURE AT PATNA
(CRIMINAL WRIT JURISDICTION CASE)
Criminal Writ Jurisdiction Case No. 1209 of 2016
Dipak Bajaj …….Petitioner
Versus
Union of India & Ors. ……Respondent
SYNOPSIS
That through the present writ application the petitioner seeks
following reliefs;-
i) To issue a writ in the nature of Mandamus commanding the
authorities to allow the application dated 25.01.2016 for
compounding of offence under Customs (Compounding of Offences)
Rules, 2005.
ii) To issue a writ in the nature of direction commanding the
authorities to release the Passport of the petitioner.
iii) To grant any other relief or reliefs to which the petitioner is
entitled in the facts and circumstances of the case.
The petitioner is a Non Resident Indian. The petitioner runs his
business in United Kingdom. A show cause notice bearing
no.246970 dated 03/04.10.2016 has been issued by the office of
Chief Commissioner of Customs (Preventive) Zone, Patna whereby
the petitioner has been asked to reply to the show cause notice
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Page 117
117 before the Compounding Authority. The show cause notice is issued
by the office of Customs which is in the territorial zone of State of
Bihar, therefore, the petitioner is entitled to invoke the extra
ordinary jurisdiction of this Hon'ble High Court. The office of Chief
Commissioner of Customs (Preventive) Zone, Patna, Government of
India vide letter no. 246970 dated 03/04.10.2016 issued show
cause notice to the petitioner as to why the petitioner's application
seeking for compounding of offences under Customs (Compounding
of Offences) Rules, 2005, should not be rejected under sub-rule 3 of
Rule 4 of Customs (Compounding of Offences) Rules, 2005. The
customs Officers of LCS Sonauli seized the above gold and foreign
currency under Section 110 of the Customs Act, 1962. The
petitioner was thereafter arrested under Section 104 of the Customs
Act, 1962 on 04.04.2014 and was produced before the Chief Judicial
Magistrate, Varanasi, who sent him to the judicial custody upto
27.05.2014. Subsequently prosecution was sanctioned and launched
against the petitioner by the Commissioner Customs (prev)
Lucknow. The petitioner was released on bail by the Hon'ble High
Court Allahabad on 29.01.2015 under the order for Criminal Misc.
Bail Application No.18322 of 2014. Since the prosecution was
already ordered to be launched in the present case by the
Commissioner Customs (Prev.), Lucknow, the petitioner filed an
application for compounding of offence under Rule 3 of the Customs
(Compounding of Offences) Rules, 2005, vide his application dated
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118 25.01.2016. The petitioner has submitted his application on
25.01.2016 and the Show Cause Notice for rejection has been
issued on 04.10.2016, after elapse of period of more than eight
months. The reply to the Show Cause Notice dated 04.10.2016 was
already filed on 06.10.2016 and it was requested that the Personal
Hearing in the matter be fixed on 07.10.2016 as the petitioner was
available at Patna as inordinate delay has already beencaused on
the issue. Rather than being communicated for any date of hearing,
the petitioner received an Addendum dated 17.10.2016 to the said
Show Cause Notice thereby raising additional grounds for rejection
which amply speaks of biased mind of the Compounding Authority.
It is well settled that corrigendum or addendum can modify only
unsubstantial changes to the Show Cause Notice, but cannot
altogether bring about a new charge. In the said addendum, the
Compounding Authority has raised a new ground for rejection on
the basis of issuance of Circular No.46/2016 dated 04.10.2016 by
the CBEC. It is alleged that by way of said Circular, the stage of
launching prosecution has been advanced to the stage of issuance
of Show Cause Notice in the case of smuggling of gold, in place of
after completion of adjudication which means that the prosecution is
to be invariably launched in case of smuggling of gold and there is
no escape from the same. It is also alleged that in case of the
petitioner, the reporting authority has also reported that prosecution
in his case is in advanced stage with high probability of befitting
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119 punishment being meted out to the petitioner and the hearing is in
crucial stage, therefore, application for seeking Compounding of
Offence, i.e. grant of escape from prosecution for criminal liability
would be clear cut violation of the latest Circular of the Board. It is
submitted that such procedure was never followed in the case of the
petitioner and the Show Cause Notice has been issued de hors the
procedure laid down and in contravention to the spirit of Circular
No. 54/2005-Cus dated 30.12.2005. Again, regarding the allegation
that the case of petitioner is in advanced stage of crucial hearing
with high probability of befitting punishment being meted out to the
petitioner, hence, compounding cannot be allowed. In this regard, it
is submitted that there is no bar in the Law for exceptions to
prosecution in all such cases. The law is clear that the compounding
can be allowed both before or after launching of prosecution, there
is not even a bar that compounding cannot be allowed even after
conviction. Thus the contention of the Compounding Authority has
been raised without basis of any valid illegal provisions, therefore,
same is bad in law and same has been issued to harass the
petitioner, which is impermissible in law and on facts. The petitioner
is not well and is suffering from many ailments for which the
petitioner regularly consults doctors and remains under their
supervision. The petitioner is diagnosed as "moderate depressive
episode" for which he requires effective and regular supervision
under the doctor. Besides the said ailment, the petitioner is diabetic
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120 also. Considering this aspect, the authorities ought not to have sit
over the matter. The petitioner herein craves leave of this Hon'ble
Court to produce the documents concerning his ailments at the time
of hearing of the case, if required so, in the facts and Circumstances
of the case. Besides this, the petitioner being a PIO British Citizen
does not have necessary wherewithal and refuge to sustain his life
and there is no means of livelihood available to the petitioner.
LIST OF DATES AND EVENTS:
Date Events
02.04.2014 The Petitioner while coming from Nepal was stopped
by the Officers of SSB Sonauli (Nautanwa
District-Maharajganj for checking and during the
course of his personal search 4320 gms of gold totally
valued at Rs. 1,09,12,590/- was found along with
other goods and foreign currency.
03.04.2014 The petitioner was handed over by SSB to the
Officers of Land Customs Station Sonauli.
04.04.2014 The petitioner was thereafter arrested under Section
104 of the Customs Act, 1962 and was produced
before the Chief Judicial Magistrate, Varanasi, who
sent him to the judicial custody upto 27.05.2014.
Subsequently prosecution was sanctioned and
launched against the petitioner by the Commissioner
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121 Customs (prev) Lucknow.
29.01.2015 That the petitioner was released on bail by the
Hon'ble High Court Allahabad under the order for
Criminal Misc. Bail Application No.18322 of 2014.
25.01.2016 The petitioner filed an application for compounding of
offence under Rule 3 of the Customs (Compounding
of Offences) Rules, 2005.
04.10.2016 A show cause notice bearing no.246970 has been
issued by the office of Chief Commissioner of
Customs
(Preventive) Zone, Patna whereby the petitioner has
been asked to reply to the show cause notice before
the Compounding Authority.
06.10.2016 Pursuant to the said show cause notice, the
petitioner replied before the authorities.
17.10.2016 The authorities vide letter no.2531 issued addendum
to the show cause notice dated 04.10.2016.
17.11.2016 The authorities in order to obviate the accountability
for delaying the issue of the petitioner, again
arbitrarily issued a letter asking for submission of
defence reply to addendum to show cause notice.
Hence, this writ petition
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122 IN THE HIGH COURT OF JUDICATURE AT PATNA
(CRIMINAL WRIT JURISDICTION CASE)
Crl.W.J.C.No 1209 of 2016
In the matter of an application
under Articles 226 & 227 of the
Constitution of India.
And
In the matter of
Dipak Bajaj, Son of Late Awat Ram Bajaj, resident of House no.
12/6-Flaxley Road, Modern, SM46L.J, London (UK)
..... ....Petitioner
Versus
1. Union of India through Department of Revenue, Government of
India, North Block, New Delhi - 110 001.
2. The Department of Revenue through its Secretary, North Block,
New Delhi - 110 001.
3. The Secretary, Department of Revenue, Government of India,
North Block, New Delhi - 110 001.
4. The Chief Commissioner of Customs (Preventive) Zone Patna, 4th
Floor, C.R Building, Birchand Patel, Path, Patna-800001.
2. The Joint Commissioner, Customs (Preventive) Zone, Patna, 4th
Floor, C.R Building, Birchand Patel, Path, Patna-800001.
………Respondents
To,
The Mr. Justice Hemant Gupta, the Hon'ble Acting Chief
Justice of the High Court of Judicature at Patna and his Companion
Justices of the said Hon'ble Court.
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123
The humble petition on behalf of the
petitioner above named.
Most Respectfully Sheweth:
1. That through the present writ application the petitioner seeks
following reliefs:-
i) To issue a writ in the nature of Mandamus commanding the
authorities to allow the application dated 25.01.2016 for
compounding of offence under Customs (Compounding of Offences)
Rules, 2005.
ii) To issue a writ in the nature of direction commanding the
authorities to release the Passport of the petitioner.
iii) To grant any other relief or reliefs to which the petitioner is
entitled in the facts and circumstances of the case.
2. That the main questions of law involved in the writ application
are as follows:-
a) Whether the authorities can act against the circular?
b) Whether the case of the petitioner is fit for compounding?
c) Whether the authorities are required to apply their independent
mind upon the available documents?
d) Whether the power to permit compounding under Section 137
(3) of Customs Act is wide?
e) Whether the case of the petitioner falls under the embargo place
upon the power of compounding?
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124 f) Whether the case referred to in the show cause notice is not at all
applicable in the facts and circumstances of the petitioner's case?
g) Whether the satisfaction of the authorities is subjective or same
must be guided by objectivity?
h) Whether the impugned action of the authorities is colourable
exercise of power?
i) Whether the action of the authorities is per se illegal and
arbitrary?
3. That the petitioner is a Non Resident Indian. The petitioner runs
his business in United Kingdom. A show cause notice bearing
no.246970 dated 03/04.10.2016 has been issued by the office of
Chief Commissioner of Customs (Preventive) Zone, Patna whereby
the petitioner has been asked to reply to the show cause notice
before the Compounding Authority. The show cause notice is issued
by the office of Customs which is in the territorial zone of State of
Bihar, therefore, the petitioner is entitled to invoke the extra
ordinary jurisdiction of this Hon'ble High Court.
3. That office of Chief Commissioner of Customs (Preventive) Zone,
Patna, Government of India vide letter no. 246970 dated
03/04.10.2016 issued show cause notice to the petitioner as to why
the petitioner's application seeking for compounding of offences
under Customs (Compounding of Offences) Rules, 2005, should not
be rejected under sub-rule 3 of Rule 4 of Customs (Compounding of
Offences) Rules, 2005.
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125 4. Photocopy of letter dated 03/04.10.2016 is
annexed herewith and marked as Annexure-1
to the application.
5. That pursuant to the said show cause notice, the petitioner
replied before the authorities on 06.10.2016.
Photocopy of reply dated 06.10.2016 is
annexed herewith and marked as Annexure-2
to the application.
6. That instead of considering the merits of the reply filed by the
petitioner, the authorities vide letter no.2531 dated 17.10.2016
issued addendum to the show cause notice dated 04.10.2016 in the
matter of application for Compounding of Offences.
Photocopy of letter dated 17.10.2016 is
annexed herewith and marked as Annexure-3
to the application.
7. That it is pertinent to bring on record the application for
compounding dated 25.01.2016 filed by the petitioner before the
Chief Commissioner of Customs, Patna Zone.
Photocopy of application dated 25.01.2016 is
annexed herewith and marked as Annexure-4
to the application.
8. That it is to refer here that the petitioner is resident of house
no. 12,6-Flaxley Road, Modern, SM46LJ, London (UK), holder of
British passport no.511352051, while coming from Nepal on
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126 02.04.2014 was stopped by the Officers of SSB Sonauli (Nautanwa
District-Maharajganj for checking and during the course of his
personal search 4320 gms of gold totally valued at Rs. 1,09,12,590/-
was found along with following goods and foreign currencyi-(a)
Foreign currency total 475 pounds;(b) Nepali currency 410;(c)
Indian currency Rs.5700/-;(d) Passport No.511352051 ;(e)Handset
Blackberry(FCCNo.L6ARCN70U); and Nepali SIM-1.
9. That after completion of necessary formalities, the petitioner
along with gold and currency etc., was handed over by SSB to the
Officers of Land Customs Station Sonauli on 03.04.2014 for further
action. Thereafter, statement of the petitioner was recorded under
Section 107 and 108 of the Customs Act, 1962 on 03.04.2014 and
04.04.2014. The petitioner had also produced the bills/invoices of
purchase of recovered gold from Birmingham (UK) which were
issued in his own name bearing nos. 0214312 dated 31.03.2014 for
500 gms gold; 0208064 dated 25.02.2014 for one kg gold and
0010727 dated 31.03.2014 for one kg gold.
10. That the customs Officers of LCS Sonauli seized the above
gold and foreign currency under Section 110 of the Customs Act,
1962. The petitioner was thereafter arrested under Section 104 of
the Customs Act,1962 on 04.04.2014 and was produced before the
Chief Judicial Magistrate, Varanasi, who sent him to the judicial
custody up to 27.05.2014. Subsequently prosecution was sanctioned
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Page 127
127 and launched against the petitioner by the Commissioner Customs
(prev.) Lucknow.
11. That the petitioner was released on bail by the Hon'ble High
Court Allahabad on 29.01.2015 under the order for Criminal Misc.
Bail Application No. 18322 of 2014.
12. That the petitioner was also issued a Show Cause Notice
dated 27.08.2014 when he was lodged in District jail Varanasi and
the case was adjudicated by the Additional Commissioner Customs
Lucknow, vide Order No. 23/2015 dated 02.03.2015, under which
4320 gms of gold along with foreign currency was ordered for
absolute confiscation and a penalty of Rs.25,00,000/- was imposed
upon him.Thereafter the applicant deposited the adjudged
penalty of Rs,25,00,000/- on 05.11.2015 vide challan no. 2
(40166946).
13. That since the prosecution was already ordered to be
launched in the present case by the Commissioner Customs (Prev.),
Lucknow, the petitioner filed an application for compounding of
offence under Rule 3 of the Customs (Compounding of Offences)
Rules, 2005, vide his application dated 25.01.2016.
14. That the petitioner most respectfully and humbly begs to
submit that the aforesaid Show Cause Notice for rejection of
application of compounding of offence has been issued on
assumptions and presumptions without appreciating the facts and
mis-appreciating the law and therefore, same is bad in law.
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128 15. That the petitioner has submitted his application on
25.01.2016 and the Show Cause Notice for rejection has been
issued on 04.10.2016, after elapse of period of more than eight
months. The CBEC while introduction of compounding scheme has
issued elaborate guidelines for considering the matter of
compounding by the compounding authority vide Circular No.
54/2005 Cus dated 30.12.2005. The said Circular CBEC has
delineated the very purpose of compounding as to prevent litigation
and encourage early settlement of disputes. In the said Circular the
offences have been classified into technical and substantive offences
under the Customs Act, 1962. An offence under Section 135 and
135(A) of the Customs Act, 1962, have been classified as
substantive offence and in such cases the guidelines is that the
compounding should be allowed once. It is submitted that the
offence committed by the petitioner is alleged to be in the nature of
those specified at Section 135 and hence petitioner's claim for
compounding must be considered positively keeping in view the
purpose of compounding under the Customs Act.
16. That the Circular no.54/2005 dated 30.12.2005 issued by
CBEC referred above at para 7 delineates the time limit under which
the compounding authority is expected to dispose of the application.
It says, "The applications for compounding of offences must be
disposed of within six months". In the present case the time limit of
six months has not been adhered to and a Show Cause Notice for
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129 rejection of application for compounding of application has been
issued after eight months that too on flimsy grounds which is bad in
law and also barred by limitation. It is well settled that Circulars
issued by the Department are binding on the Departmental Officers.
And in the present case the time limit as prescribed in the said
Circular for disposing off the said application has not been adhered
to by the Department and the said Show Cause Notice needs to be
withdrawn on the ground of the limitation itself.
17. That the CBEC Circular No, 54/2005-cus dated 30,12.2005 at
paragraph no.6 also provides for intimating the assesses offer of
compounding of offences at the time of initiating action for
launching of prosecution. However in this case no intimation of such
kind was received by the applicant and the prosecution proceedings
were initiated which is nothing but defeat of the very purpose of
compounding scheme under the Customs Act, 1962.
18. That it is also submitted that the power to grant compounding
under Section 137(3) of the Customs Act, 1962, is a statutory
obligation and should be decided in a systematized manner within
the reasonable time and with due care and diligence. However in
the present case the processes and time limit prescribed by CBEC in
the Circular no. 54/2005 dated 30.12.2005 has not been followed
and the Show Cause Notice needs to be withdrawn on this ground
alone. It is submitted that the right to seek compounding under the
Customs Act, 1962, is a statutory right and the authority must act
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130 with due care and diligence and within reasonable time which is
prescribed within the Circular itself. Not binding to the said time
limit debars the impugned Show Cause Notice by limitation and
must be withdrawn.
19. That it is also well settled law that all actions of the revenue
Department must be consistent with the Circulars which was in
force at relevant point. Hence, it is submitted that keeping in view
the essence of Circular No 54/2005-Cus dated 30.12.2005, the
application of compounding by the petitioner must be allowed.
20. That further the Compounding Authority has taken the ground
for rejection of compounding is that the goods allegedly smuggled
by the petitioner is prohibited goods and therefore the petitioner is
debarred from compounding of offences in the instant case by
virtue of subclause (ii) of clause (c) of proviso to sub-section (3) of
section 137 of the Customs Act, 1962. For the sake of easy
reference it is submitted that the said provision reads "goods which
are specified as prohibited items for import and export in the ITC
(HS) Classification of Export and Import Items of the Foreign Trade
Policy, as amended from time to time, issued under section 5 of the
Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992)
". On plain reading of the said provision, it can be appreciated that
the compounding under this provision is prohibited for the goods
which are specified as "prohibited" under ITC (HS) list for import
and export under Foreign Trade Policy issued under Section 5 of the
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131 Foreign Trade (Development and Regulation) Act, 1992 and not
under the Customs law for time being in force. It is reiterated that
gold falling under Tariff Heading 71081300 is expressed as "free"
under the aforesaid list, therefore, the case of the petitioner for
compounding under the said provision must be allowed.
21. That it is further submitted that the Notification No. 09/96-
Cus dated 22.01.1996 as spelt out in the Show Cause Notice for
holding the goods as "prohibited" for the purpose of sub-clause (ii)
of clause (c) of proviso to sub-section (3) of section 137 of the
Customs Act, 1962 has been issued under powers conferred under
sub-section (1) of Section 11 of the Customs Act, 1962 and not
under Section 5 of the Foreign Trade (Development and Regulation)
Act, 1992. Thus it may be appreciated that the case of the petitioner
is not statutorily debarred from compounding, hence, same should
be allowed. It is well settled law that in a taxing statute that there is
no room for any intendment. It is submitted that prohibitions under
Customs Act, 1962 cannot be held to be debarred under sub-clause
(ii) of clause (c) of proviso to sub-section (3) of Section 137 of the
Customs Act, 1962, for debarring the prohibition must be under the
specified provision of the Act. Therefore, it may be appreciated that
the case of petitioner is not covered under the said provision;
hence, his application of compounding of offences must be allowed.
22. That the Show Cause Notice also alleges that the petitioner
has not disclosed the fact of appeal filed by him before the CESTAT,
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Page 132
132 Allahabad against the order of adjudicating authority bearing no.
23/2015 dated 02.03.2015 in his application dated 25.01.2016 for
compounding of offences before the Compounding Authority and
the said act of petitioner allegedly amounts to demonstrable
contradiction or inconsistencies or incompleteness of the application,
therefore, the compounding cannot be entertained in terms of the
decision of Supreme Court in case of Union of India v/s Anil
Chanana [2008(222) ELT 481 (SC)]. In this regard it is submitted
that the petitioner has filed the application for Compounding of
Offence in the form prescribed under Rule 3 of the Customs
(Compounding of Offence) Rules 2005 and has furnished all the
particulars as required by the said form. It may be appreciated that
there is no column in the said form requiring such information nor
the provisions governing the Compounding of Offences under the
Customs Act, 1962 requires anything of this sort. Moreover, the fact
of filing of appeal before Hon'ble CESTAT Allahabad is not a
clandestine activity. It is indeed a statutory proceeding and the
Department is kept informed of all the matters pertaining to such
facts by way of intimations or notices and also given chance of
being heard. It is on record that the petitioner has filed the
application for compounding of offences is on 25.01.2016 whereas
the appeal before CESTAT, Allahabad has been filed on 19.04.2016.
Thus the said allegation of the department cannot be regarded as
demonstrable inconsistency or incompleteness in filing of application
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133 before the Compounding Authority in order to debar the petitioner
from compounding of offences. The decision of UOI V/s Anil
Chanana was again considered in the case of Deepesh Mamodia V/s
Chief Commissioner of Customs (DZ) [2014 (3080 ELT 34 (Del.)] by
the Hon'ble High Court, Delhi wherein it was held that the power of
compounding under Section 137 (3) of the Customs Act, 1962 is
wide and the exclusions are well enumerated therein. For applying
the Rule of Disclosure, there must be demonstrable and substantive
contradiction and not the technical omissions. These aspects have
to be looked on facts and circumstances of each case. In the
present case, the petitioner paid the entire amounts confirmed by
the Order-In-Original and is ready to pay the Compounding fees and
his case is not debarred by other exclusions spelt out in the statue.
Therefore, it is submitted that the case of the petitioner merits
consideration and the compounding should be allowed in his case.
23. That the regarding the allegation in the Show Cause Notice
that the petitioner has already filed an appeal before Hon'ble
CESTAT, Allahabad for judicial remedy, his application cannot be
allowed for compounding, it is submitted that the appeal has been
filed before CESTAT Allahabad for the civil liability under the
Customs Act, 1962 and the application for compounding is given for
settlement of criminal liability under the said Act. It is well settled
that both the liabilities run independent of each other and have to
be weighed in terms of defined offences and penalties. Appeal has
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Page 134
134 been filed before CESTAT, Allahabad under statutory right conferred
by the Customs Act, 1962 after complying with the specified
provisions and the same has nothing to do with the filing application
for compounding of offences. It is also submitted that filing of
appeal before CESTAT is not spelt out as a exclusion for
compounding under proviso to subsection (3) of Section 137 of the
Customs Act, 1962. Therefore, it is prayed that the application for
compounding of offence by the petitioner should be allowed.
24. That it is further alleged in the Show Cause Notice that the
reporting authority in his letters dated 08.07.2016 and 19.08.2016
informed the Chief Commissioner that as per the inputs received at
his end Sri Deepak Bajaj is still indirectly indulged in the smuggling
activity and after re-examining the matter and seeing the gravity
and magnitude of the offence and its adverse impact on the
financial health of the country necessitating his prosecution under
the Customs Act, 1962 has opined that compounding of offences
committed by the accused in the instant case should not be allowed.
In this regard, it is submitted that the said allegations are based on
assumptions and presumptions and do not hold water in the eyes of
law. The petitioner is a person of 46 years old, has been mentally
disturbed since the time he was arrested on 04.04.2014, has
already been in jail for almost ten months when he was released on
bail. His passport has been seized because of which he cannot go
home as he is a British citizen; his family has taken a shape of
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Page 135
135 broken home. The petitioner neither has the capacity nor the ability
or the means to indulge into such activities. Therefore, the said
allegations are vehemently denied. The Show Cause Notice
Authority has neither enumerated any evidence nor provided any
evidence based on which such opinions were formed, and hence the
said charges must be held to without any basis and the application
of the petitioner or compounding of offences should be allowed.
25. That it is also submitted that the above said allegations are
not only baseless but also extra-statutory. The Reporting Authority
is expected to furnish his report "with reference to the particulars
furnished in the application or any matter considered relevant for
examination of application". There is no provision under Rule 4 (1)
of the Customs (Compounding of Offence) Rules 2005 for furnishing
opinions by the Reporting Authority, that too after re-examining the
matter, and further to cause biasness in the minds of the
Compounding Authority. Thus, it is submitted that the Show Case
Notice issued on aforesaid grounds needs to be withdrawn merely
on the grounds of biasness and being baseless.
26. That without prejudice to what has been submitted above, it is
further submitted that there is no bar for compounding the first
offence even where it is of substantive nature as spelt out at clause
(a) and (d) of proviso sub-section (3) of Section 137 of the Customs
Act, 1962, hence, the application for compounding of offence by the
petitioner should be allowed.
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Page 136
136 27. That it is submitted that it is the mandate of law that the
Compounding Authority while discharging the statutory duty of
making proper enquiry is required to examine the available
materials with care and caution and the Compounding Authority
must be satisfied with the materials for proper enquiry in order to
pass the order of compounding.
28. That from perusal of provisions, it is evident that the power to
permit compounding of offences contained in Section 137(3) is
apparently wide, the concerned official is not empowered to allow
compounding in respect of offences under Section 135 and 135(A)
and the class of offences which are spelt out in clauses (b) & (c) of
the proviso to Section 137(3). Likewise, an embargo has been
placed upon the power of compounding in respect of a person who
has been allowed to compound once in respect of any offence under
Chapter XVI of the Customs Act, 1962. The requirement of
disclosure, apparently spelt out in Anil Chanana's case was read in
to the power under Section 137(3) of the Act, having regard to the
given circumstances of the case. It was highlighted during the
hearing, that the offence with which the importer or smuggler was
charged with in that case attracted a minimum sentence.
29. That the authorities ought to have taken into consideration
the real purport and nature of Section 137 of Customs Act, 1962,
From perusal of the provisions contained in Section 137, it is evident
that the petitioner does not come within the purview of the proviso
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Page 137
137 of Section 137. The petitioner does not fall within the zone of
proviso (b) of Section 137. Further, the petitioner also does not
come within the purview of proviso (c) (ii) of Section 137.
Therefore, the authorities cannot sit over the matter rather they are
obligated under law to decide the issue of the petitioner
expeditiously.
30. That as regards proviso (c) (ii) of Section 137, it is stated that
from perusal of ITC(HS),2012, Schedule-I, Import Policy, Section-
XlV, Chapter-71, (Exim Code-7108) -Gold (including gold plated with
platinum) unwrought or in semi-manufactured forms, or in powder
form, it is evident that same does not come within the purview of
the above said proviso. The petitioner craves leave of this Hon'ble
Court to bring on record the relevant extracts of schedule dealing
with the said code.
Photocopy of relevant extracts of schedule is
annexed herewith and marked as Annexure-5
to the application.
31. That the Government of India, Ministry of Finance vide circular
no. 54/2005 dated 30.12.2005 issued guidelines for compounding of
offences. It is stated therein, "in order to make best of use of
compounding of offence, assesses at the time of intimation
/initiating action for launching of prosecution should be given an
offer of compounding. It may however be clarified that the
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Page 138
138 application for compounding shall be decided on merits and in the
absolute discretion of the Chief Commissioner. The cases where the
Chief Commissioner is not inclined to accede to applicant's request
for compounding as detailed in paragraph no.3 above, may be
rejected informing the grounds accordingly". It is further mentioned
therein, "adequate publicity may be given to the compounding of
offences Rules and these guidelines so that large numbers of cases
are compounded resulting in reduction in number of cases pending
in the Courts. All the applications for compounding of offences must
be disposed of within 6 months. The performance of the zone in
realization of compounding amount also may be indicated suitably in
the monthly report to the Directorate of Data Management".
Photocopy of guidelines is annexed herewith
and marked as Annexure-6 to the application.
32. That from perusal of the above said guidelines, it is apparent
that the application for compounding must be decided on merit
though absolute discretion vests in the Chief Commissioner but it is
settled law that even the exercise of absolute discretion, the
authority concerned should not bring element of subjectivity rather
same has to be done in most objective manner. In the present case,
the authorities are refraining from exercise of their discretion and
the application of the petitioner is put to shelve on one pretext or
another. It is amply clear that the Department insists upon
compounding of the cases and for that recourse to wide publicity is
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139 resorted to in order to decrease the litigation. But in the present
case, the authorities are not compounding the petitioner's case for
reasons best known to them. The peculiar mode adopted by the
authorities is contrary to the wisdom expressed in guidelines in
letters and spirit.
33. That the authorities in order to obviate the accountability for
delaying the issue of the petitioner, again arbitrarily issued letter
dated 17.11.2016 asking for submission of defence reply to
addendum to show cause notice. This letter is an eye wash.
Photocopy of letter dated 17.11.2016 is annexed
herewith and marked as Annexure-7 to the
application.
34. That the reply to the Show Cause Notice dated 04.10.2016
was already filed on 06.10.2016 and it was requested that the
Personal Hearing in the matter be fixed on 07.10.2016 as the
petitioner was available at Patna as inordinate delay has already
been caused on the issue. Rather than being communicated for any
date of hearing, the petitioner received an Addendum dated
17.10.2016 to the said Show Cause Notice thereby raising additional
grounds for rejection which amply speaks of biased mind of the
Compounding Authority. It is well settled that corrigendum or
addendum can modify only unsubstantial changes to the Show
Cause Notice, but cannot altogether bring about a new charge. In
the said addendum, the Compounding Authority has raised a new
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140 ground for rejection on the basis of issuance of Circular No.46/2016
dated 04.10.2016 by the CBEC. It is alleged that by way of said
Circular, the stage of launching prosecution has been advanced to
the stage of issuance of Show Cause Notice in the case of
smuggling of gold, in place of after completion of adjudication which
means that the prosecution is to be invariably launched in case of
smuggling of gold and there is no escape from the same. It is also
alleged that in case of the petitioner, the reporting authority has
also reported that prosecution in his case is in advanced stage with
high probability of befitting punishment being meted out to the
petitioner and the hearing is in crucial stage, therefore, application
for seeking Compounding of Offence, i.e. grant of escape from
prosecution for criminal liability would be clear cut violation of the
latest Circular of the Board. In this regard, it is submitted that the
aforesaid Circular of the CBEC simply brings about a modification to
Circular No. 27/2015-Cus dated 23.10.2015 which provides
guidelines for launching of prosecution and nowhere affects the
procedure for Compounding of Offences as contained at proviso to
Section 137 (3) of the Customs Act, 1962. The said provision spells
out that compounding can be done before or after launching of
prosecution. Thus, even if the stage of launching prosecution is
advanced to the Show Cause Notice stage in gold cases as stated in
the addendum to the show cause notice then also, there would be
no bar for compounding such cases. The parent Circular No.
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141 27/2015-Cus 23.10.2015 at Para 12 mentions that the provisions
related to compounding should be brought to the notice of person
being prosecuted and such person be given an offer of
compounding as per Circular 54/2005-Cus dated 30.12.2005. It is
submitted that such procedure was never followed in the case of the
petitioner and the Show Cause Notice has been issued de hors the
procedure laid down and in contravention to the spirit of Circular
No. 54/2005-Cus dated 30.12.2005. Again, regarding the allegation
that the case of petitioner is in advanced stage of crucial hearing
with high probability of befitting punishment being meted out to the
petitioner, hence, compounding cannot be allowed. In this regard, it
is submitted that there is no bar in the Law for exceptions to
prosecution in all such cases. The law is clear that the compounding
can be allowed both before or after launching of prosecution, there
is not even a bar that compounding cannot be allowed even after
conviction. Thus the contention of the Compounding Authority ha?
been raised without basis of any valid illegal provisions, therefore,
same is bad in law and same has been issued to harass the
petitioner, which is impermissible in law and on facts.
35. That besides above, it is pertinent here to mention that the
petitioner is not well and is suffering from many an ailments for
which the petitioner regularly consults doctors and remains under
their supervision. The petitioner is diagnosed as "moderate
depressive episode" for which he requires effective and regular
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Page 142
142 supervision under the doctor. Besides the said ailment, the
petitioner is diabetic also. Considering this aspect, the authorities
ought not to have sit over the matter. The petitioner herein craves
leave of this Hon'ble Court to produce the documents concerning his
ailments at the time of hearing of the case, if required so, in the
facts and circumstances of the case. Besides this, the petitioner
being a PIO British Citizen does not have necessary wherewithal and
refuge to sustain his life and there is no means of livelihood
available to the petitioner.
36. That it is submitted that the authorities cannot act against the
circular.
37. That it is submitted that case of the petitioner is fit for
compounding.
38. That it is submitted that the authorities are required to apply
their independent mind upon the available documents.
39. That it is submitted that the power to permit compounding
under Section 137 (3) of Customs Act is wide.
40. That it is submitted that the case of the petitioner does not fall
under the embargo place upon the power of compounding.
41. That it is submitted that the case referred to in the show
cause notice is not at all applicable in the facts and circumstances of
the petitioner's case.
42. That it is submitted that the satisfaction of the authorities
must be objective.
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143 43. That it is submitted that the impugned action of the
authorities is colorable exercise of power.
44. That it is submitted that the action of the authorities is per se
illegal and arbitrary.
45. That the petitioner has no alternative remedy than to move
this Hon'ble Court for redressal of the grievances. 46.That the
petitioner has not moved earlier before this Hon'ble Court for the
reliefs stated in the matter.
It is, therefore, prayed that your Lordships
may graciously be pleased to consider the
facts and circumstances of the case and issue
Rule NISI calling upon the respondents as to
why reliefs prayed for in paragraph no.1 in this
writ application be not allowed in favour of the
petitioner and upon return of the rule and
make the rule absolute.
And /or
Pass such other order(s) or direction(s) as
your Lordships may deem fit and proper in the
facts and circumstances of the case.
And for this the petitioner shall ever pray.
Dated : Nil
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144
A F F I D A V I T
I, Dipak Bajaj, Aged about 46 years, Son of Late Awat Ram Bajaj,
resident of House no. 12/6-Flaxley Road, Modern, SM46L.J, London
(UK), do hereby solemnly affirm and state as follows:-
1. That I am the petitioner and as such I am acquainted with
the facts and circumstances of the case.
2. That I have read the contents of this writ application and I
have fully understood the same. The statement made in
paragraph
Nos 3, 8 to 29, 32, 34 to 46 are true to my knowledge and those
made in paragraph nos 4 , 5, 67 and 30, 31 and 33 are true to my
information derived from the records of the case and the rests are
by way of submissions before this Hon’ble Court.
3. That the annexures are photocopies of their respective
original.
Dated: Nil
//True Copy//
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145 ANNEXURE-P17
GOVERNMENT OF INDIA
OFFICE OF THE CHIEF COMMISSIONER OF CUSTOMS (PREVENTIVE) ZONE, PATNA
4th FLOOR, C.R. BUILDING, BIRCHAND PATEL PATH, PATNA
ORDER No.: 01/Compounding/2017
Dated : 16.01.2017
Shri Dipak Bajaj, S/o Late Awat Ram Bajaj, H.No.12, 6-Flaxely Road,
Modern, SM46 LJ, London (U.K.) has filed an application dated
25.01.2016 before the Chief Commissioner, Customs(Preventive)
Zone, Patna (Compounding Authority) for compounding of offence
under Section 137 of the Customs Act, 1962 read with Rule 3 of the
Customs (Compounding of Offences) Rules, 2005, as amended in
respect of case of 4.320 Kg smuggled gold valued at
Rs.1,09,12,590/- (Rupee One Crore Nine lakh Twelve thousand five
hundred and ninety) recovered and seized from him on 03.04.2014.
BRIEF FACTS OF THE CASE
1. Shri Dipak Bajaj, S/o Late Awat Ram Bajaj, H.No.12, 6-Flaxely
Road, Modern, SM46 LJ, London (U.K.) (hereinafter referred as
"Applicant") was intercepted by the officials of SSB at Sonauli on
02.04.2014 and gold in different forms totally weighing 4320 gms of
3rd country origin (U.K.) (hereinafter referred as "smuggled gold")
and Indian currency of Rs.5,000/- were recovered from him
concealed in pockets of his jacket/coat and pants, underwear and
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146 socks. The officers of SSB, Sonauli handed over the recovered
"smuggled gold" to the officers of LCS Sonauli on 03.04.2014. On
reasonable belief that the said recovered gold was being smuggled
into India from U.K. via Nepal contravening the provisions of
Notification No.09/1996-Cus dated 22.01.1996 issued under section
11 of the Customs act, 1962 and thus liable for confiscation under
Sections 111 & 119 of the Customs Act, 1962, the officers of LCS
Sonauli seized the said "smuggled gold" and Indian currency of
Rs.5,000/-, old white cloth, one pair of socks and shoes under
Section 110 of the Customs Act, 1962. After investigation, a show
cause notice was issued to him on 27.08.2014.
2. Vide O-in-0 No.23/2015 dated 02.03.2015, the Adjudicating
Authority, i.e. Additional Commissioner, Customs, Lucknow ordered
for absolute confiscation of the seized gold weighing 4320 gms.
valued at Rs.1,09,12,590/- along with Indian currency of Rs.5,000/-
under Section 111(d) of the Customs Act, 1962 and also ordered for
absolute confiscation of old white cloth, one pair of socks and shoes
under Section 119 of the Customs Act, 1962 and also imposed a
penalty of Rs.25,00,0007- under Section 112 of the Customs Act,
1962 upon Shri Dipak Bajaj. The Appeal filed by Applicant against
the aforesaid Order-in-Original dated 02.03.2015 has also been
rejected by Commissioner (Appeals), Lucknow vide his Order-in-
Appeal No. 03/C us/A I Id/2016 dated 13.01.2016.
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147 3. Since the offence committed by Shri Dipak Bajaj was
punishable under Section 135 of the Customs Act, 1962 hence, he
was arrested under Section 104 of the Customs Act, 1962 by the
order of the Competent Authority on 04.04.2014. Prosecution was
launched against him before the Hon'ble Court of Chief Judicial
Magistrate (Economic Offence) at Varanasi on Presently, Shri Bajaj
is on bail as granted by the Hon'ble High Court, Allahabad on Shri
Dipak Bajaj filed an application before the Hon'ble Spl. CJM,
Varanasi for release of his seized passport, but the Hon'ble Spl. CJM,
Varanasi vide his order dated 05.05.2015 has ordered that
since Applicant is foreign national, therefore, if he is allowed to go
outside India, his presence could not be ensured in future during
trial. He appealed against the said order before the Hon'ble Spl.
Session Judge Varanasi but the Hon'ble Spl. Session Judge Varanasi
vide order dated 22.08.2015 dismissed the appeal of the Applicant
and upheld the order of the Spl. CJM. Appeal of the Applicant
against the order of the Spl. Session Judge has also been rejected
by the Hon'ble High Court, Allahabad vide order dated 15.10.2015
and directed the Applicant for filing petition under section 482 of the
Criminal Procedure Code. Further, the Applicant filed application
before Hon'ble High Court, Allahabad under section 482 of Cr.P.C.
Accordingly, Hon'ble High Court, Allahabad vide his order dated
22.12.2015 has directed that :
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148 "Considering the facts of the case, without expressing any
opinion on the merits of the Applicant's case, this application
U/s 482 Cr.P.C. is finally disposed of with a direction to the
court below to decide Case No. 1 of 2014, under Section
104/135 Customs Act, P.S. Sima Sulk Sonauli, District
Maharajganj in accordance with law without granting
unnecessary adjournments to either of the parties as
expeditiously as possible preferably within a period of
six months from the date of production of certified copy of
this order, if there is no legal impediment."
4. Name of Applicant in High Court orders dated 15.10.2015 &
22.12.2015 is mentioned as "Deepak Bajaj" and not as "Dipak Bajaj"
which raises doubts about intention of Applicant using two names in
proceedings for reasons best known to him. An application dated
25.01.2016 was filed by Shri Dipak Bajaj for compounding offence
under Section 137(3) of the Customs Act, 1962 read with Rule 3 of
the Customs (Compounding of Offences) Rules, 2005. (Hereinafter
referred as Rules), without disclosing these vital facts, which has
come to knowledge of department during antecedent verification by
Reporting Authority.
5. As per Rule 2(e) of the Customs (Compounding of Offences)
Rules, 2005, reports, in this regard, were called from the Reporting
Authority, i.e. Commissioner of Customs (Prev), Lucknow. Based on
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149 reports and antecedent verifications of 'Applicant' by Reporting
Authority,
Show Cause Notice dated 04.10.2016 was issued under
C.No.VIII(48)09-Compounding offence/CCO/CUS/T/2016/2469
dated 04.10.2016 to Mr. Dipak Bajaj requiring therein to show cause
to the Chief Commissioner, Customs(Prev.) Zone, Pana as to why
his application seeking for compounding of offence under Customs
(Compounding of Offences) Rules, 2005, should not be rejected
under sub-rule 3 of Rule 4 of Customs (Compounding of Offences)
Rules, 2005 on the ground that:
(i) Import of 3rd country origin gold from Nepal, is
prohibited vide Notification No.9/96-Cus dated 22.01.199
read with Section 137(3) of the Customs Act, 1962.
While it appears that the gold, under seizure, has conclusively been
proved to be of 3rd country origin and accordingly absolutely
confiscated. Section 137 (3)(C)(ii) of the Customs Act, 1962 clearly
envisages that nothing contained in this sub-section shall apply to a
person involved in smuggling of "Goods which are specified as
prohibited items for import and export in the ITC (HS)
Classification of Export and Import Items of the Foreign
Trade Policy, as amended from time to time, issued under section
5 of the Foreign Trade (Development and Regulation) Act, 1992".
Also, the compounding cannot be claimed as a matter of right.
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150 (ii) The Applicant has failed to disclose all the material
facts in his application filed for compounding of offence before
the Compounding Authority. The Applicant also filed an application
before Hon'ble CESTAT, Allahabad, in this regard. But the same
has not been disclosed by the Applicant in his application dated
25.01.2016 before the Compounding Authority or later on. In the
case of UOI Vs. Anil Channa (2008) (222 ELT481 SC) the
Hon'ble Supreme Court held that the basic Principle of
Disclosure underlying Section 137 (3) of the Customs Act,
1962, is that if there are demonstrable contradictions or
inconsistencies or incompleteness in the case of Applicant,
the application for compounding cannot be entertained.
6. In view of spurt in smuggling of Gold in country, CBEC, issued
Circular No.46/2016 dated 04.10.2016 to make stringent provisions
against persons involved in smuggling of gold. An addendum to
above Show Cause Notice, taking cognizance of recently issued
CBEC Circular No.46/2016 dated 04.10.2016 amending the Circular
No.27/2015 dated 23.10.2015, was issued, which inter-alia
mentioned that "vide which the stage of launching prosecution has
been advanced to the stage of issuance of show cause notice in
place of stage after completion of adjudication which means that
prosecution is to be invariably launched in the case of smuggling of
gold and there is no escape from the same". In case of the
Applicant, the Reporting Authority has reported that the prosecution
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151 in this case is already launched on 27.05.2014 and hearing in the
matter is in crucial stage with high probability of befitting
punishment being meted out to the Applicant, therefore, the
application for seeking Compounding of Offence, that is, grant of
escape from prosecution for criminal liability would be
in clear cut violation of latest circular of the Board". The Applicant
did not submit the reply to the addendum to show cause
notice in stipulated period. Therefore the Applicant was
reminded for the same vide this office letters dated 17.11.2016,
24.11.2016 and 06.12.2016 and he submitted the reply only
on 27.12.2016 at the time of personal hearing, after more
than 2 months.
7. Director General, DRl, New Delhi was reminded vide this office
letter dated 19.09.2016 to intimate information about the Applicant,
required under Section 137 (3) of the Customs Act, 1962. The
Assistant Director (G.I.), DRl, New Delhi vide his letter dated
07.10.2016 informed that two cases were booked by the DRl,
Mumbai Zonal Unit against one Shri Deepak Bajaj, R/o 6-B,
Devashish, Peddar Road, Mumbai, which created a doubt in the
mind whether both the Deepak Bajaj are same or not. Further the
Assistant Director (G.I.), DRl, New Delhi vide his letter dated
24.10.2016 requested to the Deputy Director, DRl, Zonal Unit,
Mumbai about the verification of the Applicant with the Deepak
Bajaj against whom DRl, Mumbai Zonal Unit booked the cases. Vide
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152 letter dated 11.11.2016 this office had also requested to the Deputy
Director, DRl, Zonal Unit, Mumbai about verification of the
Applicant. The Deputy Director, DRl, Zonal Unit, Mumbai vide his
letter dated 23.11.2016 had forwarded a copy of personal data &
financial profile of Shri Deepak Bajaj against whom DRl, Mumbai
Zonal Unit booked the cases. Name of Applicant in High Court
orders dated 15.10.2015 & 22.12.2015 as well as CESTAT is
mentioned as "Deepak Bajaj" and not as "Dipak Bajaj" which
raises doubts about intention of Applicant using two names in
proceedings for reasons best known to him. This fact has not been
disclosed by Applicant in his application which is evidence of
demonstrable contradictions, incompleteness & inconsistencies in
case of Applicant making his application for Compounding non-
maintainable.
REPLY AND SUBMISSIONS OF APPLICANT
8. Shri Dipak Bajaj through his letter dated 06.10.2016 in reply
to the Show Cause Notice dated 04.10.2014 has stated that the
Show Cause Notice for rejection of compounding of offence has
been issued on assumptions and presumptions without appreciating
the facts and mis-appreciating the law and therefore is bad in law.
He also relied heavily on Circular No. 54/2005 dated
30.12.2005, which does not exist and has been superseded
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153 by Circular No. 29/2009-Cus dated 15.10.2009. However, his
submissions, as submitted, are as follows:
9. He stated that he has submitted his application on 25.01.2016
and the Show Cause Notice for rejection has been issued on
04.10.2016, after elapse of period of more than eight months. The
CBEC while introduction of compounding scheme has issued
elaborate guidelines for considering the matter of compounding vide
Circular No.54/2005-Cus dated 30.12.2005. Circular No.54/2005
dated 30.12.2005 issued by CBEC referred above at para 7
delineates the time limit under which the compounding authority is
expected to dispose off the application. CBEC Circular No.54/2005-
Cus dated 30.12.2005 at para 6 also provides for intimating the
assessees the offer of compounding of offences at the time of
initiating action for launching of prosecution. However, in this case
no intimation of such kind was received by the application and the
prosecution proceedings were initiated which is nothing but defeat
of the very purpose of compounding scheme under the Customs
Act, 1962.
10. He also submitted that the power to grant compounding under
Section 137(3) of the Customs Act, 1962, is a statutory obligation
and should be decided in a systematized manner within the
reasonable time and with due care and diligence. In the case of V.
Shreeharan alias Murugan vs Union of India [2014 4 SCC 242] and
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154 Shatrughan Chauhan vs Union of India [2014 3 SCC 1], the
Supreme Court while deciding the delay in action on mercy petition
has held that the right to seek mercy under Article 72/161 of the
Constitution of India is a constitutional right and is not dependent at
the discretion and whims of the executive. Every constitutional duty
must be fulfilled with due care and diligence. The fact that no time
limit is prescribed to the President/Governor for disposal of mercy
petition to work in a more systematized manner to repose the
confidence of people in the institution of democracy.
11. Another ground alleged by the Compounding Authority for
rejection of compounding is that the goods allegedly smuggled by
the Applicant is prohibited goods and therefore the Applicant is
debarred from compounding of offences in the instant case by
virtue of sub-clause (ii) of clause(c) of proviso to sub-section (3) of
section 137 of the Customs Act, 1962. For the sake of easy
reference, it is submitted that the said provision reads "goods which
are specified as prohibited items for import and export in the ITC
(HS) Classification of Export and Import Items of the Foreign Trade
(Development and Regulation) Act, 1992 (22 of 1992)". On plain
reading of the said provision, it can be appreciated that the
compounding under this provision is prohibited for the goods which
are specified as "prohibited" under ITC(HS) list for import and
export under Foreign Trade Policy issued under Section 5 of the
Foreign Trade (Development and Regulation) Act, 1992 and not
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155 under the Customs law for time being in force. It is reiterated that
gold falling under Tariff Heading 71081300 is expressed as "free"
under the aforesaid list and therefore the case of Applicant is not
debarred for compounding under the said provision.
12. He has further submitted that the Notification No. 09/96-Cus
dated 22.01.1996 as spelt out in the Show Cause Notice for holding
the goods as "prohibited" for the purpose of sub clause (ii) of clause
© of provisio to sub-section (3) of section 137 of the Customs Act,
1962, has been issued under powers conferred under sub-section
(1) of Section 11 of the Customs Act, 1962 and not under Section 5
of the Foreign Trade (Development and Regulation) Act, 1992. Thus
it may be appreciated that the case of the Applicant is not
statutorily debarred from compounding and hence should be
allowed. It has also been well settled by the Hon'ble Supreme Court
in the case of Pradip Nanjee Gala Vs. Sales Tax Officer [2015-TIOL-
95-SC-CT-LB], that in a taxing statute one has to look merely at
what is clearly said and there is no room for any intendment.
Nothing is to be read in, nothing is to be implied. One can fairly look
at the language used. Applying the said principle, it is submitted
that prohibitions under Customs Act, 1962 cannot be held to be
debarred under sub-clause (ii) of clause(c) of provisio to sub-section
(3) of section 137 of the Customs Act, 1962, for debarring the
prohibition must be under the specified provision of the Act.
Therefore, it may be appreciated that the case of Applicant is not
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Page 156
156 covered under the said provision and hence his application of
compounding of offences must be allowed.
13. Further, he has submitted that the maxim "Expressum facit
cessare taciturn" (meaning where there is express mention of
certain things than anything which is not mentioned is excluded) as
upheld by Hon'ble Supreme Court in the case of UOI Vs. Tulsidas
Patel [1985 3 SCC 398] as a system of logic and common sense is
rightly applicable in the present case and therefore the case of
Applicant cannot be held to be debarred from compounding of
offences under sub-clause (ii) of clause (c) of proviso to sub-section
(3) of section 137 of the Customs Act, 1962, as alleged in the Show
Cause Notice.
14. The Show Cause Notice also alleges that the Applicant has not
disclosed the fact of appeal filed by him before the CESTAT
Allahabad against the order of adjudicating authority bearing no.
23/2015 dated 02.03.2016 in his application dated 25.01.2016 for
compounding of offences before the Compounding Authority. The
said act of Applicant allegedly amounts to demonstrable
contradiction or inconsistencies or incompleteness of the application
and therefore the compounding cannot be entertained in terms of
the decision of Supreme Court in case of Union of India Vs. Anil
Chanana (2008(222)] ELT 481 (SC)]. In this regard, it is submitted
that the Applicant has filed the application for Compounding of
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Page 157
157 Offence in the form prescribed under Rule 3 of the Customs
(Compounding of Offence) Rules 2005 and has furnished all the
particulars as required by the said form. It may be appreciated that
there is no column in the said form which requires such information
nor the provisions governing the Compounding of Offences under
the Customs Act, 1962 requires anything of this sort, Moreover, the
fact of filing of appeal before Hon'ble CESTAT Allahabad is not a
clandestine activity, it is indeed a statutory proceeding and the
department is kept informed of all the matters pertaining to such
facts by way of intimations or notices, and also given chance of
being heard, it is on record that the Applicant has filed the
application for compounding of offences is on 25.01.2016 whereas
the appeal before CESTAT, Allahabad has been filed on 19.04.2016.
Thus the said allegation of the department cannot be regarded as
demonstrable inconsistency or incompleteness in filing of application
before the Compounding Authority, so as to debar the Applicant
from compounding of offences. The decision of UOI Vs. Anil
Chanana was again considered in the case of Depesh Mamodia Vs.
Chief Commissioner of Customs (DZ) [2014 (3080 ELT 34 (Del.)] by
the Hon'ble High Court, Delhi wherein it was held that the power
and the exclusions are well enumerated therein. For applying the
Principle of Disclosure, there must be demonstrable and substantive
contradiction and not the technical omissions. These aspects have
to be looked on facts and circumstances of each case. In the
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158 present case the Applicant has paid the entire amounts confirmed
by the Order-ln-Original and is ready to pay the Compounding fees,
and his case is not debarred by other exclusions spelt out in the
statue. Therefore, it is submitted that the case of the Applicant
merits consideration and the compounding should be allowed in his
case.
15. He submitted that regarding the allegation in the Show Cause
Notice that, since the Applicant has already filed an appeal before
Hon'ble CESTAT, Allahabad for judicial remedy, his application
cannot be allowed for compounding, and also submitted that the
appeal has been filed before CESTAT Allahabad for the civil liability
under the Customs Act, 1962 and the application for compounding
is given for settlement for criminal liability under the said Act. It is
well settled that both the liabilities run independent of each other
and have to be weighed in terms of defined offences and penalties.
Appeal has been filed before CESTAT, Allahabad under statutory
right conferred by the Customs Act, 1962 after complying with the
specified provisions and the same has nothing to do with the filing
application for compounding of offences. It is also submitted that
filing of appeal before CESTAT is not spelt out as a exclusion for
compounding under proviso to sub-section (3) of Section 137 of the
Customs Act, 1962. Therefore, prayed that the application for
compounding of offence by the Applicant should be allowed.
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159 16. He stated that it is further alleged in the Show Cause Notice
that the reporting authority in his letters dated 08.07.2016 and
19.08.2016 informed the Chief Commissioner that as per the inputs
received at his end Shri Dipak Bajaj is still indirectly indulged in the
smuggling activity and after re-examining the matter and seeing the
gravity and magnitude of the offence and its adverse impact on the
financial health of the country necessitating his prosecution under
the Customs Act, 1962, has opined that compounding of offences
committed by the accused in the instant case should not be allowed.
In this regard, it is submitted that the said allegations are based on
assumptions and presumptions and do not holds water in the eyes
of law. The Applicant is a person of 46 years old, has been mentally
disturbed since the time he was arrested on 04.04.2014, has
already been in jail for almost ten months when he was released on
bail. His passport has been seized because of which he cannot go
home as he is British citizen, his family has taken a shape broken
home. The Applicant neither has the capacity nor the ability or the
means to indulge into such activities. Therefore, the said allegations
are vehemently denied.
17. In reply to the addendum the Applicant stated that the
addendum was issued after filing of the reply and without
considering the legal grounds put forth in the reply and also made a
Circular No. 46/2016 which was issued on 04.10.2016, a ground for
rejection applying it retrospectively, although the said Circular
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160 nowhere mentions about its retrospective effect. It is settled
principle that the law or provision related thereto cannot be applied
retrospectively, if not provided in the statute itself. The said Circular
simply advances the stage of launching of prosecution in cases of
smuggling of gold by amending the parent Circular 27/2015-Cus
dated 23.10.2015, The aforesaid Circular nowhere amends provision
or instructions related to compounding of offences as prescribed
under circular No. 27/2015- Cus dated 23.10.2015 which, at para
12, inter alia provides that guidelines issued under Circular No.
54/2005-Cus dated 30.12.2005 should be adhered to. He further
added that the statute nowhere prohibits the cases for
compounding even where the hearing is at advance stage or even
where conviction has been made. Applicant also informed having
filed a Criminal writ Petition before the Hon'ble Patna High Court on
21.11.2016 in the matter.
RECORD OF PERSONAL HEARING
18. In compliance with the Principles of Natural Justice, Show
Cause Notice dated 04.10.2016 and addendum dated 17.10.2016
were issued in the instant case. Applicant did not submit reply to
addendum despite three reminders and submitted reply on
27.12,2016 at the time of Personal Hearing after lapse of more than
2 months. The personal hearing was held before me on 27.12.2016
at 11.30 hrs. which was attended by the Applicant Sri Dipak Bajaj
along with Sri Vimal Chaudhary and Sri Amit Pandey, both
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161 authorized representatives, in which he reiterated submissions made
as per the letter dated 06.10.2016 and letter dated 27.12.2016.
DISCUSSION & FINDINGS
19. I have carefully gone through the Show Cause Notice dated
04.10.2016, addendum to Show Cause Notice dated 17.10.2016,
submissions of the Applicant dated 06.10,2016 and submission
dated 27.12.2016, the parawise comments of Reporting Authority
on aforesaid reply and records of the case.
20. I find that the Applicant has filed an application dated
25.01.2016 for compounding of offences under section 137(3) of
the Customs Act, 1962 read with Rule 3 of the Customs
(Compounding of offences) Rules, 2005 under Notification
No.114/2005-Cus(N.T.) dated 30.12.2005 as amended. The case is
to be decided mainly on the following grounds :-
(i) Whether the goods recovered and seized from the possession
of the Applicant are "prohibited goods" as has been held by the
Hon'ble Apex Court in case of M/s Om Prakash Bhatia Vs.
Commissioner of Customs Delhi 2003(155)E.L.T. 423 (SC)?
(ii) Whether the Applicant has made full disclosure or not in
respect of the instant case as has been held to be basic Principle of
Disclosure underlying Section 137(3) of the Customs Act, 1962 by
the Apex Court in UOI Vs. Anil Channa 2008(222) ELT481 (SC)?
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162 (iii) Whether the offence committed by the Applicant in respect of
aforesaid "prohibited goods" falls within the purview of
Compounding of Offences envisaged under Section 137(3) of the
Customs Act, 1962 read with sub-rule 3 of Rule 4 of the Customs
(Compounding of offences) Rules, 2005 or not ?
21. It is seen from records of the case that absolute confiscation
of goods is ordered by Adjudicating Authority by referring to
Sections 111(d) of the Customs Act, 1962. It reads as under:-
Section 111 Confiscation of improperly imported goods, etc. -
(d) "Any goods which are imported or attempted to be imported or
are brought within the Indian customs waters for the purpose of
being imported, contrary to any prohibition imposed by or under this
Act or any other law for the time being in force".
The aforesaid Section empowers the authority to confiscate any
goods attempted to be imported contrary to any prohibition
imposed by or under the Act or any other law for the time being in
force. Hence, for application of the said provision, it is required to
be established that attempt to import the goods was contrary to any
prohibition imposed under any law for the time being in force.
Further Section 2(33) of the Customs Act, 1962 of the Act defines
"prohibited goods" as under:
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163 "prohibited goods" means any goods the import or export of which
is subject to any prohibition under this Act or any other law for the
time being in force but does not include any such goods in respect
of which the conditions subject to which the goods are permitted to
be imported or exported have been complied with" Here, I refer to
judgment of Hon'ble Supreme Court of India In case of Om Prakash
Bhatia V/s Commissioner of Customs, Delhi 2003(155)E.LT. 423
(SC):
From the aforesaid definition, it can be stated that:
(a) if there is any prohibition of import or export of goods under the
Act or any other law for the time being in force, it would be
considered to be prohibited goods, and (b) this would not include
any such goods in respect of which the conditions, subject to which
the goods are imported or exported, have been complied with. This
would mean that if the conditions prescribed for import or
export of goods are not complied with, it would be
considered to be prohibited goods. This would also be clear
from Section 11 which empowers the Central Government to
prohibit either 'absolutely' or 'subject to such condition' to be
fulfilled before or after clearance, as may be specified in the
notification, the import or export of the goods of any specified
description. The notification can be issued for the purpose specified
in the sub-section (2). Hence, prohibition of importation or
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164 exportation could be subject to certain prescribed conditions to be
fulfilled before or after clearance of goods. If conditions are not
fulfilled, it may amount to prohibited goods.
22. The Adjudicating Authority in the instant case vide his
Adjudication Order No. 23/2015 dated 02.03.2015 has ordered as:
l. order for absolute confiscation of the 4320 grams foreign origin
gold valued at Rs. 1,09,12,590/- ( Rupees One crore nine lakhs
twelve thousand five hundred and ninety only) under Section 111(d)
of the Customs Act, 1962
II. I order for absolute confiscation of 10 Indian Currency notes in
the denomination of Rs. 500/- with force value of Rs. 5000A under
Section 111(d) of the Customs Act, 1962.
III. I order for absolute confiscation of old white cloth, one pair of
socks & shoes valued at Nil used for concealing the said gold ,
under Section 119 of the Customs Act, 1962.
IV. I impose a penalty of Rs.25,00,000/-( Rupees Twenty Five Lakhs
only) upon Shri Dipak Bajaj under Section 112 of the Customs Act,
1962.
23. It is seen from records of the case that the Applicant was
intercepted by the officials of SSB at Sonauli on 02.04.2014 and
gold in different forms totally weighing 4320 gms of 3rd country
origin (U.K.) valued at Rs. 1,09,12,590/- and Indian currency of
Rs.5,000/- was recovered from the pockets of his jacket/coat and
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Page 165
165 pants, underwear and socks. The officers of SSB, Sonauli handed
over the recovered gold to the officers of LCS Sonauli on
03.04.2014. On reasonable belief that the said recovered gold was
being smuggled into India from U.K. via Nepal contravening the
provisions of Notification No.09/1996-Cus dated 22.01.1996 issued
under section 11 of the Customs act, 1962 and thus liable for
confiscation under Sections 111 & 119 of the Customs Act, 1962,
the officers of LCS Sonauli seized the said gold and Indian currency
of Rs.5,000/-, old white cloth, one pair of socks and shoes under
Section 110 of the Customs Act, 1962 and the Applicant was
arrested under Section 104 of the Customs Act, 1962 by the order
of the Competent Authority on 04.04.2014. Thereafter,
Adjudicating Authority vide O-in-O No.23/2015 dated
02.03.2015 confirmed the charges leveled against the
Applicant and the gold, under seizure, was confiscated
absolutely without giving option to redeem as import of
third country origin gold, in any manner, from Nepal is
prohibited by Government of India under Notification
No.09/1996-Cus dated 22.01.1996 issued under section 11 of
the Customs Act, 1962 as amended and also imposed a personal
penalty upon the Applicant. The Notification No.09/96 dated
22.01.1996 is as under :-
"In exercise of the powers conferred by sub-section(l) of
Section 11 of the Customs Act, 1962 (52 of 1962) and in
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166 supersession of the Notification No.76/F.No.80/83/65-LCI,
dated the 19m June, 1965, published in the Gazette of India
vie No.GSR 848, dated the 191h June, 1965, the Central
Government being satisfied that for the prevention of
smuggling, it is necessary so to do, hereby prohibits the
import from Nepal to India of goods which have been
exported to Nepal from countries other than India :
Provided that machinery and equipment used in Nepal for the
execution of a project may be allowed to be imported into India
from Nepal after completion of the project subject to the following
conditions, namely :-
(i) The importer produced a certificate from the Indian Embassy,
Kathmandu, that the machinery and equipment have in fact been
used for a period of one year for the execution of the project in
Nepal;
(ii) The project has been financed by an Agency of the United
Nations or the International Bank for Reconstruction and
Development Association or the Asian Development Bank or any
other multilateral agency or the Government of India; and
(iii) The importer had obtained the permission from the Reserve
Bank of India for import of the machinery and equipment into Nepal
for taking up work in the project in Nepal, if so required."
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167 24. In view of above it is settled law that Import of 3rd country
origin gold from Nepal, is prohibited vide Notification No.09/96-Cus
dated 22.01.1996. Gold falls under Chapter 71 of the first schedule
to the Customs Tariff Act, 1975 and Chapter Note 4A defines the
expression "precious metal" means silver .gold and platinum. Policy
Circular No. 77(RE-008)/2004-2009 dated 31.03.2009 by DGFT
provides list of agencies/entities which are authorized to import
gold. In addition to this list, designated Banks notified by RBI are
also entitled to import gold. Para 1 of Notification No.106/2009-
Customs dated 14.09.2009 issued by the Government of India
amending Notification No.94/96-Customs dated 16.12.1996 provides
the list of'' Nominated agencies" for the purpose of import of gold.
Para 1 of the said Notification reads "In the said Notification, in the
Explanation (i) for clause (b), the following clauses shall be
substituted, namely :-
(b) Foreign Trade Policy means Foreign Trade Policy 2009-2014
notified by the
Government of India in the ministry of Commerce & Industry
published in the Gazette of
India , Extraordinary , Part-ll, Section 3, Subsection (ii) vide
Notification No. 01/2009-
2014 dated27.08.2009, as amended from time to time.
(ii) for clause (c), the following clause shall be substituted, namely
"(c) "Nominated agencies" means,-
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168 (1)Metals and Minerals Trading Corporation Limited (MMTC);
(2)Handicraft and Handloom Export Corporation (HHEC);
(3)State Trading Corporation (STC);
(4)Project and Equipment Corporation of India Ltd. (PEC);
(5)STCL Ltd;
(6)MSTC Ltd;
(7)Diamond India Limited (DIL);
(8)Gems & Jewellery Export Promotion Council(G&J EPC);
(9)a Star Trading House (only for Gems and Jewellery sector) or a
Premier Trading House under paragraph 3.10.2 of Foreign Trade
Policy; and any other agency authorised by Reserve Bank of India
(RBI)."
25. In terms of ITC(HS) Classification on import items under FTP
2009-2014 , import of gold is subjected to RBI Regulations. Circular
No. 15 dated22.07.2013 and Circular No. 25 dated24.08.2013
issued vide RBI/2013-14/148 AP(DIR Series ) regulate import of
gold into India. RBI regulations also endorse the list of nominated
agencies for the purpose of import of precious metal eg gold. DGFT
vide their Notification No.69(RE-2013)/2009-2014 dated19.02.2014
have provided continuity to the FTP 2009-2014 by extending the
FTP 2009-2014 till further order even after 31.03.2014. Therefore,
FTP 2009-2014 was in vogue at the time of detection and seizure of
the contraband in the instant case.
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169 26. The FTP was in vogue at the time of detection and seizure of
the smuggled gold in the instant case. The foregoing makes it amply
clear that the Government has imposed certain restrictions/control
by way of regulating import of gold for use in domestic sector.
Hon'ble Supreme Court of India in case of Om Prakash Bhatia vs.
Commissioner of Customs, Delhi 2003 (155 ELT 423 (SC) has held in
para, inter-alia as follows:
". Hence,, prohibition of importation or exportation could be
subject to certain prescribed conditions to be fulfilled before or after
clearance of goods. If conditions are not fulfilled, it may
amount to prohibited goods. This is also made clear by this
court in Sheikh Mohd. Omer Vs. Collector of Customs, Calcutta &
Others [(1970)2 SCE 728)}. "
The Court held thus :
' What clause (d) of Section 111 says is that any goods which
are imported or attempted to be imported contrary to "any
prohibition imposed by any law for the time being in force in this
country" is liable to be confiscated, "Any prohibition" referred to
in that section applies to every type of "prohibition". That
prohibition may be complete or partial. Any restriction on import
or export is to an extent a prohibition. The expression "any
prohibition" in Section 111(d) of the Customs Act, 1962 includes
restrictions. Merely because Section 3 of the Imports and Exports
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Page 170
170 (Control) Act, 1947, uses throe different expressions
"prohibiting", restricting" or "otherwise controlling", we
cannot cut down the amplitude of the word "any prohibition" in
Section 111(d) of the Act. "Any prohibition" means every
prohibition. In other words all types of prohibitions. Restrictions
is one type of prohibition.
The instant case, is fully covered by aforesaid judgement of Apex
Court. Therefore, gold in terms of ITC (HS) classification of Export &
Import of the Foreign Trade Policy being subject to RBI regulations
falls under prohibited category of goods for import in view of the
aforesaid judgment of the Apex court in case of Om Prakash Bhatia
Vs. Commissioner of Customs 2003(155) ELT423.
As Mr. Dipak Bajaj does not belong to any of the nominated
agencies/entities etc. figured in the list provided in the policy
Circular of DGFT, so he is not entitled to import gold into India in
terms of FTP and import of gold by him in view of judgment of Apex
Court in Om Prakash Bhatia case supra falls under prohibited goods
in terms of ITC (HS) Classification of Export & Import of the Foreign
Trade policy. The Hon'ble Madras High Court has also taken the
same view in their order dated 23.08.2016 in case of Commissioner
of Customs (Air) vs. P. Sinnasamy.
It is admitted fact that the impugned gold weighing 4320 gms.
Valued at Rs.1,09,12,590/- was goods of third country origin and
the Applicant was caught red handed while smuggling gold into
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Page 171
171 India from Nepal, therefore, impugned gold is prohibited goods in
terms of the express provisions of Notification No. 9/96-cus dated
22.01.1996 and ITC (HS) Classification of Export & Import of the
Foreign Trade policy.
Hon'ble Madras High Court in the case of Aiyakanny Vs. Joint
Commissioner of Customs on 2 March, 2012 in para 7 held interalia
as under:
". Applying the ratio of the Judgment in the case of Om Prakash
Bhatia Vs. Commissioner of Customs, Delhi, reported in 2003(6)
S.C.C.161, to the facts of the case, we find that, in the present case,
the assessee did not fulfil the basic eligibility criteria, which makes
the imported item prohibited goods "
Hon'ble Bombay High Court in the case of Ramdas Bhikaji Satpute
vs. joint Commissioner -2016(332) E.L.T.A86 (Bom.) has held
interalia as under:
" in the absence of any other evidence showing licit
procurement of gold the inescapable conclusion is that the gold is
smuggled. Under the circumstances the goods have to be held as
"prohibited goods". "
27. The Apex Court in the case of Om Prakash Bhatia Vs.
Commissioner of Customs [2003(155)E.L.T 423] has held that:
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172 " Merely because Section 3 of the Imports and Export (Control)
Act, 1947, uses three different expressions "prohibiting",
"restricting" or "otherwise controlling", we cannot cut down the
amplitude of the word "any prohibition" in Section 111(d) of the Act.
"Any prohibition" means every prohibition. In other words
all types of prohibitions. Restriction is one type of
prohibition"
28. I find that the ratio of above judgements of Apex Court is
squarely applicable in the instant case. In view of above, 1 find that
import of gold in commercial quantity beyond the purview of
regulations laid down by RBI duly endorsed by Ministry of
Commerce through Policy Circular of DGFT as well as by Notification
of Ministry of Finance is "prohibited". I, therefore, hold that gold in
terms of ITC(HS) classification of Export & Import of the foreign
Trade Policy being subject to RBI regulations falls under prohibited
category of goods for import, in the instant case.
29. Here it is pertinent to refer to the relevant provisions of law
relating to Compounding as under :-
Section 137(3) of Customs Act, 1962 reads as follows :-
“Any offence under this Chapter may, either before or after the
institution of prosecution, be compounded by the Chief
Commissioner of Customs on payment, by the person accused of
the offence to the Central Government, of such compounding
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Page 173
173 amount and in such manner of compounding as may be specified by
rules. Provided that nothing contained in this sub-section shall
apply to-
(a) a person who has been allowed to compound once in respect
of any offence under sections 135 and 135A;
(b) a person who has been accused of committing an offence
under this Act which is also an offence under any of the following
Acts, namely:—
(i) the Narcotic Drugs and Psychotropic Substances Act, 1985 (61
of 1985);
(ii) the Chemical Weapons Convention Act, 2000 (34 of 2000);
(Hi) the Arms Act, 1959 (54 of 1959);
(iv) the Wild Life (Protection) Act, 1972 (53 of 1972);
(c) a person involved in smuggling of goods falling under any of
the following, namely;-
(i) goods specified in the list of Special Chemicals, Organisms,
Materials, Equipment and Technology in Appendix 3 to Schedule 2
(Export Policy) of ITC (HS) Classification of Export and Import Items
of the Foreign Trade Policy, as amended from time to time, issued
under section 5 of the Foreign Trade (Development and Regulation)
Act, 1992 (22 of 1992);
(ii) goods which are specified as prohibited items for
import and export in the ITC (HS) Classification of Export
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Page 174
174 and Import Items of the Foreign Trade Policy, as amended
from time to time, issued under section 5 of the Foreign
Trade (Development and Regulation) Act, 1992 (22 of
1992);
(iii) any other goods or documents, which are likely to affect friendly
relations with a foreign State or are derogatory to national honour;
(d) a person who has been allowed to compound once in respect
of any offence under this Chapter for goods of value exceeding
rupees one crore;
(d) a person who has been convicted under this Act on or after
the 30th day of December, 2005.
30. In view of discussion and analysis in preceding paragraphs,
the gold under seizure, proved to be of 3rd country origin and
accordingly absolutely confiscated has been proved to be
"Prohibited Goods" as held in judgment of Hon'ble Supreme Court of
India in case of Om Prakash Bhatia V/s Commissioner of Customs,
Delhi 2003(155)E.L.T. 423 (SC). Section 137(3)(c)(ii) of the
Customs Act, 1962 clearly states that nothing contained in this sub-
section shall apply to a person involved in smuggling of "Goods
which are specified as prohibited items for import and export in the
ITC(HS) Classification of Export and Import Items of the Foreign
Trade Policy, as amended from time to time, issued under section 5
of the Foreign Trade (Development and Regulation) act, 1992".
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175 The foregoing discussion undisputedly establishes that the
recovered, seized and consequently confiscated 3rd country origin
gold in the instant case pertains to category of "Prohibited goods"
for import into India. Smuggling involvement of the Applicant has
also been conclusively proved in the O-in-0 No.23/2015
dated02.03.2015. Hence, it is held that the application filed by the
Applicant Mr. Dipak Bajaj does not merit consideration in terms of
Section 137(3) (c) (ii) of the Customs Act, 1962, read with Rule 4 of
the Customs (Compounding of Offences) Rules, 2005 therefore
liable to be rejected.
Here, I refer to judgment of Hon'ble Supreme Court which dismissed
the petition filed by Samynathan Murugesan [2010(254)ELT A15]
applying the ratio of judgement of Om Prakash Bhatia Vs
Commissioner of Customs [2003(155)E.L.T 423]. While dismissing
the petition the Supreme Court passed the following order:
"Applying the ratio of the judgment in the case of Om Prakash
Bhatia V Commissioner of Customs, Delhi, reported, in 2003 (155)
E.L.T. 423 (S.C.) = 2003 (6) S.C.C 161, to the fact of the case, we
find that, in the present case, the assessee did not fulfil the
basic eligibility criteria, which make the imported item a
prohibited good; hence, we see no reason to interfere with the
impugned order. The special leave petition is, accordingly,
dismissed".
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176 The instant case is fully covered by aforesaid judgment of Hon'ble
Supreme Court.
31. Without prejudice to above, CBEC has recently issued Circular
No.46/2016 dated 04.10.2016 amending the Circular No.27/2015
dated 23.10.2015, the para 6 of the existing guidelines shall be
substituted as follows:-
"Normally, prosecution may be launched immediately on completion
of proceedings. However, prosecution in respect of cases involving
offences relating to items i.e. Gold, FICN, arms, ammunition and
explosives, antiques, art treasures, Wild life items and endangered
species of flora and fauna may preferably be launched immediately
after issuances of Show Cause Notice."
Vide Circular No.46/2016 dated 04.10.2016 it is clearly established
that the accused committing an offence of illegal importation of gold
of 3rd country origin, from Nepal, is at par with the offence
committed under the provisions of various Acts, mentioned in the
Section 137 (3)(b) of the Customs Act, 1962, in which the
compounding of offences shall not apply. Hence, the application for
compounding of offence, filed by the Applicant, deserves rejection.
32. The said Circular No. 46/2016 dated 04.10.16 issued
amending the Circular No. 27/2015 dt. 23.10.2015 advises
launching of prosecution immediately after issuance of Show Cause
Notice in the respective case pertaining to commodities enlisted in
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177 the said Circular. In Compliance with the intention and the spirit of
the said Circular, an Addendum to Show Cause Notice dated
04.10.2014 was issued on 17.10.2016 as Gold prominently figures
as the very first commodity in the list appended with the circular No.
46/2016 dated 04.10.2016. This indicates the gravity of smuggling
of gold in the eyes of law makers of this country. Gold smuggling is
highly pernicious to economy of the nation as it encourages hawala
transactions, draining the wealth of nation and leaving deep scar on
resources of national economy. In an attempt to arrest this trend,
Government intends to prosecute such unscrupulous persons as
early as possible and as much as lawfully feasible to ensure that the
message percolates down across the fraternity of gold smugglers
and the feeling of fear of prosecution could work as deterrent to
such unscrupulous activities. The said addendum has been issued
considering "the true spirit" of Government of India portrayed in the
circular No. 46/2016 dt. 04.10.2016. Under the scenario, I find
application in the instant case is against Board's Circular dated
04.10.2016 and defeats the very purpose of the policy presently
being pursued by Government against gold smuggling.
33. I further find that Applicant has relied heavily upon Circular
No.54/2005-Cus dated 31.12.2005 in his reply and submissions to
Show Cause Notice and Addendum. It is relevant to point out here
that said Circular No.54/2005-Cus dated 30.12.2005 does not exist
as on date and has been superseded by CBEC Circular No.29/2009-
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178 Cus dated 15.10.2009. Para 2 of Circular No.29/2009-Cus dated
15.10.2009 reads as under :-
"The High Court of Bombay in their Order dated 25.10.2007
passed in W.P. No. 1884 of 2007 held that there is no power
conferred to interfere with the statutory power of the Chief
Commissioner of Customs for compounding of offences under
section 137(3) of the customs Act 1962 . Hence the guidelines
issued by the board, vide Circular No.54/2005 Cus dated
30.12.2005, classifying offences as 'technical' and
'substantive', allowing substantive offences to be
compounded only once and excluding certain cases from
the purview of the compounding were held by the Court to
be ultravires to Customs Act, 1962 and Rules made
thereunder"
In view of the above, submissions of Applicant based on non-
existent Circular are unsustainable including submission on the
grounds of time limits, also because there is no statutory time limit
prescribed for disposal of Application of Compounding of Offence in
the Act or Rules.
34. In addition to that, rule 4(7) of Customs (Compounding of
Offence) Rules, 2005 as amended makes it categorically clear that:
"The Applicant cannot claim, as a right, that his offence shall be
compounded."
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Page 179
179 Therefore, Applicant's claim that "Compounding must be considered
positively" is beyond purview of provision of law as stated above. In
view of the contravention of Notification No.9/96 dated 22.01.1996
read with Section 137(3)(c)(ii) of the Customs Act, 1962 by the
Applicant as stated above, his application for compounding of
offence is liable for rejection.
35. The Applicant had not submitted the reply to the addendum to
show cause notice in stipulated period, even after issuance of three
reminders vide this office letters dated 17.11.2016, 24.11.2016 and
third and last reminder dated 06.12.2016 and he submitted the
reply only on 27.12.2016 at the time of personal hearing. The
Applicant has filed the reply to the addendum dated 17.10.2016 on
27.12.2016 i.e. after more than 2 months. Therefore, it appears that
the Applicant is knowingly delaying the proceedings of compounding
pending before the Chief Commissioner, Customs (Prev.) Zone,
Patna, so as to avoid the rosecution proceedings before the Court,
yet raising issue of time limit in disposal of the application, thereby
contradicting their own act of more than 2 months delay in
submission of reply as well as non-disclosure of vital facts of the
case from Department.
36. The Applicant has submitted that in the case of V. Shreeharan
alias Murugan vs. Union of India [2014 4 SCC 242] and Shatrughan
Chauhan vs. Union of India [2014 3 SCC 1], the Supreme Court
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Page 180
180 while deciding the delay in action on mercy petition has held that
the right to seek mercy under Article 72/161 of the Constitution of
India is a constitutional right and is not dependent at the discretion
and whims of the executive. I find that mercy under Article 72/161
of the Constitution of India is filed before the President of India or
Governor of any state of India against conviction / award of
punishment (life imprisonment or death sentence) by Court whereas
Compounding of offences is meant for immunity from prosecution
i.e. prior to court judgment. A court, after complete trial, in its
judgment may or may not find an accused guilty .It is pertinent to
note that the Applicant in the instant case is free on bail. Immunity
granted under compounding of offences from prosecution makes
one free from any such proceedings. Mercy Application and
Application for Compounding of Offences has no correlation and are
incomparable proceedings. Therefore, the Case Laws cited by
Applicant are distinguissible from facts and circumstances of the
instant case.
37. I find that the Apex Court in case of UOI Vs Anil Channa
[2008 (222) ELT 481SC ] has held that Compounding of Offences is
undertaken based on the Principal of Disclosure. The basic Principle
of Disclosure underlying section 137(3) read with Rule 6 of the
Customs (Compounding of Offences) Rules,2005 is that if there are
demonstrable contradictions or inconsistencies or incompleteness in
the case of the Applicant, then the application of compounding
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Page 181
181 cannot be entertained. Accordingly, compounding of offences may
not be allowed where there are demonstrable contradictions or
inconsistencies or incompleteness. In the instant case, the Applicant
filed application dated 25.01.2016 for Compounding of Offences
without mentioning whether he has already filed appeal or intends
to file an appeal before CESTAT. The Applicant has concealed these
important facts from the department and knowingly violated the
Principle of Disclosure laid down by the Apex Court in case of UOI
Vs. Anil Channa 2008 (222) ELT 481 SC]. The Applicant had ample
time with him to intimate the department but it appears that he has
deliberately avoided to inform the department. I hold that the
application of the Applicant Mr. Dipak Bajaj fails to satisfy the very
basic rule defined by the Apex Court as "the Principle of Disclosure"
and hence, I hold that the instant application filed for compounding
of offences by Mr. Dipak Bajaj does not qualify for compounding of
offences under section 137(3) of Customs Act, 1962 read with Rule
6 of the Customs (Compounding of Offences) Rules, 2005.
38. The Applicant has filed for immunity from prosecution on one
hand by soliciting compounding of offences and on other hand, he is
contesting the Order-in-Original No.23/2015 dated 02.03.2015
before CESTAT which for all practical purposes, he had accepted in
principle while filing the application for Compounding of Offences
under the Customs (Compounding of Offences) Rules, 2005, thereby
contradicting his own stand.
Bar & Bench (www.barandbench.com)
Page 182
182 39. Further, Inputs received by the Reporting Authority suggest
indirect indulgence on part of the Applicant in smuggling activities.
All enforcement agencies have their intelligence and information
network. No documentary evidence, in general, may be available in
respect of receipt of such inputs. However, such inputs are very
helpful in forming strategy for anti- smuggling operations. This
intelligence assumes significance in view of Applicant using two
names "Dipak Bajaj" & Deepak Bajaj" and not disclosing the same in
his instant application and further in view of fact of DRI having
booked two cases against Deepak Bajaj.
Here I refer to Judgment of Hon'ble Supreme Court in the case of
UOI Vs. Anil Channa 2008 (222) ELT481 SC held that:
Compounding of offence is based on the principle of Disclosure
in ases of compounding of offences it would be the duty of
the Compounding Authority to find out existence of
material, outside the evidence, which suggests that
disclosure is inaccurate, misleading or incomplete,
particularly, when there are contradictions in the stand
taken by the applicant.
40. The Applicant was caught red handed while smuggling huge
quantity of 3rd country origin gold worth more than Rupees One
Crores into India from Nepal is a proven fact. He was in jail and is
presently on bail. Shri Dipak Bajaj filed an application before the
Bar & Bench (www.barandbench.com)
Page 183
183 Hon'ble Spl. CJM, Varanasi for release of his seized passport, but the
Hon'ble Spl. CJM, Varanasi vide his order dated 05.05.2015 has
ordered that since Applicant is foreign national, therefore, if he is
allowed to go outside India, his presence could not be ensured in
future during trial. He appealed against the said order before the
Hon'ble Spl. Session Judge Varanasi but the Hon'ble Spl. Session
Judge Varanasi vide order dated 22.08.2015 dismissed the appeal of
the Applicant and upheld the order of the Spl. CJM. Appeal of the
Applicant against the order of the Spl. Session Judge has also been
rejected by the Hon'ble High Court, Allahabad vide order dated
15.10.2015 and directed the Applicant for filing petition under
section 482 of the Criminal Procedure Code. Further, the Applicant
filed application before Hon'ble High Court, Allahabad under section
482 of Cr.P.C. Accordingly, Hon'ble High Court, Allahabad vide his
order dated 22.12.2015 :
"Considering the facts of the case, with expressing any opinion on
the merits of the Applicant's case, this application U/s 482 Cr.P.C. is
finally disposed off with a direction to the court below to decide
Case No. 1 of 2014, under Section 104/135 Customs Act, P.S. Sima
Sulk Sonauli, District Maharajganj in accordance with law without
granting unnecessary adjournments to either of the parties
as expeditiously as possible preferably within a period of six
months from the date of production of certified copy of this
order, if there is no legal impediment."
Bar & Bench (www.barandbench.com)
Page 184
184 Applicant has failed to disclose these vital facts to the Department.
These facts have come to knowledge only after antecedent
verification of Applicant by Reporting Authority. Nondisclosure of
these facts assume serious implications in view of fact of Applicant
using two names and not disclosing the same in his subject
application, which is evidence of demonstrable contradictions,
incompleteness & inconsistencies in case of Applicant therefore his
application for Compounding cannot be entertained.
41. Further, Director General, DRl, New Delhi on being reminded
vide this office letter dated 19.09.2016 to intimate information
about the Applicant, required under Section 137 (3) Of the Customs
Act, 1962, the Assistant Director (G.I.), DRl, New Delhi vide his
letter dated 07.10.2016 informed that two cases were booked by
the DRl, Mumbai Zonal Unit against one Shri Deepak Bajaj, R/o 6-B,
Devashish, Peddar Road, Mumbai, which have raised doubt whether
both the Deepak Bajaj are same. Further the Assistant Director
(G.I.), DRl, New Delhi vide his letter dated 24.10.2016 requested to
the Deputy Director, DRl, Zonal Unit, Mumbai about the verification
of the Applicant with the Deepak Bajaj against whom DRl, Mumbai
Zonal Unit booked the cases. Vide^letter dated 11.11.2016 this
office had also requested to the Deputy Director, DRl, Zonal Unit,
Mumbai about verification of the Applicant. The Deputy Director,
DRl, Zonal Unit, Mumbai vide his letter dated 23.11.2016 had
forwarded a copy of personal data & financial profile of Shri Deepak
Bar & Bench (www.barandbench.com)
Page 185
185 Bajaj against whom DRl, Mumbai Zonal Unit booked the cases. As
pointed out in Para 4 & 7, name of Applicant in High Court orders
dated 15.10.2015 & 22.12.2015 is mentioned as "Deepak Bajaj" and
not as "Dipak Bajaj" which raises doubts about intention of
Applicant using two names in proceedings for reasons best known
to him, and fact not disclosed by Applicant in his subject application,
which is evidence of demonstrable contradictions, incompleteness &
inconsistencies in case of Applicant therefore his application for
Compounding cannot be entertained.
42. In view of above, it is established that the Applicant has failed
to disclose all the material facts in his application filed for
compounding of offence before the Compounding Authority.
Disclosure has been found to be inaccurate and incomplete.
Applicant has not been candid in placing of materials and facts
before Compounding Authority.
Here I refer to judgment of Hon'ble Supreme Court in the case of
UOI Vs Anil Channa (2008) (222 ELT481 SC) wherein the Hon'ble
Supreme Court has held that:
Application for compounding ought to be disallowed if there are
such contradictions, inconsistencies or incompleteness. The reason
is obvious. If the applicant is trying to hoodwink the
Authority such application would not be maintainable. That
aspect is required to be kept in mind by the Compounding Authority.
Bar & Bench (www.barandbench.com)
Page 186
186 The test is as follow - Is the applicant candid in the matter
of placing of materials and facts before the Compounding
Authority without in any way trying to hoodwink the Authority to
escape his criminal liability?
The instant case is fully covered by aforesaid judgment of Hon'ble
Supreme Court.
43. To conclude with, it is admitted fact that impugned gold
weighing 4.320 Kgs valued Rs. 1,09,12,590/- was goods of 3rd
country origin and was smuggled from Nepal to India. Therefore,
impugned absolutely confiscated gold is prohibited goods in terms of
Section
137(3)(c)(ii) of Customs, Act, 1962. Here, I refer to following
judgments :
Hon'ble Madras High Court in para 7 in the case of Aiyakannu vs.
Joint Commissioner of Customs on 2nd March 2012 held inter alia as
under:
" ................. Applying the ratio of the judgment in the case of Om
Prakash Bhatia vs. Commission of Customs, Delhi, reported in
2003(6) S.C.C. 161, to the facts of the case, we find that, in the
present case, the assesse did not fulfill the basic eligibility criteria,
which makes the imported item a prohibited goods "
Bar & Bench (www.barandbench.com)
Page 187
187 Hon'ble Bombay High Court in the case of Ramdas Bhikaji Satpute
vs Joint Commissioner- 2016 (332) E.L.T. A 86 ( Bom) has held inter
alia under:
" in the absence of any other evidence showing licit
procurement of gold the inescapable conclusion is that the gold is
smuggled. Under the circumstances the goods have to be held as
"Prohibited goods "
44. In view of discussions and findings in the foregoing
paragraphs, it is conclusively established that the "smuggled gold"
recovered and seized from the possession of the Applicant are
"prohibited goods" as has been held by the Hon'ble Apex Court in
case of M/s Om Prakash Bhatia Vs. Commissioner of Customs Delhi
2003(155)E.L.T. 423 (SC). The Applicant has not made full
disclosure in respect of the instant case as has been held to be
basic Principle of Disclosure underlying Section 137(3) of the
Customs Act,1962 by the Apex Court in UOI Vs. Anil Channa
2008(222) ELT481 (SC). Therefore, the offence committed by the
Applicant in respect of aforesaid "prohibited goods" does not fall
within the purview of Compounding of Offences under Section
137(3) of the Customs Act, 1962 read with sub-rule 3 of Rule 4 of
the Customs (Compounding of offences) Rules, 2005. Accordingly,
the application filed by Mr. Dipak Bajaj is liable to be rejected.
Bar & Bench (www.barandbench.com)
Page 188
188 ORDER
45. In view of aforesaid facts and circumstances of the case and
aforesaid judgments of Hon'ble Supreme Court cited above, I reject
the application dated 25.01.2016 filed by Applicant under Section
137(3) of Customs Act, 1962 read with sub-rule 3 of Rule 4 of the
Customs (Compounding of Offences) Rules, 2005, as amended.
(Sheo Narayan Singh)
Compounding Authority
Chief Commissioner of Customs (Prev.) Zone, Patna
C.No. Vlll(48)09-Compounding of offence/CCO/CUS/T/2016/120
Dated:16.01.2017
Copy to:-
1. Shri Dipak Bajaj, S/o Late Awat Ram Bajaj, H.No.12, 6-Flaxely
Road, Modern, SM46 LJ, London (U.K.)
2. Shri Vimal Chaudhary, Consultant, New Tax Vision, Buddha
Plaza, Buddha Marg, Patna-800001.
3. The Member Customs (Eastern Zone), CBEC, North Block, New
Delhi.
4. All Chief Commissioner of Customs Preventive/Central
Excise/Service Tax.
5. The commissioner of Customs (Prev.) Lucknow.
Assistant Commissioner
Customs (Prev.) Zone Patna
//True Copy//
Bar & Bench (www.barandbench.com)
Page 189
189 ANNEXURE-P18
Court of Special Chief Judicial Magistrate, Varanasi
Presiding Officer –Umakant Jindal, U.P.J.S.
Criminal Complaint Case No. 765 of 2014
Union of India
Through Asstt. Commissioner, Custom, Sonauli, District Mahrajganj.
… Complainant
Versus
Deepak Bajaj son of late Awatram Bajaj, resident of House No.2, 6
Flaxy Road, Modern SM 5 6 L.J. London (U.K.).
… Accused
Section 135(1)((i) Customs Act, 1962
Judgment
On behalf of Union of India, the present complaint has be filed
by complainant Brijender Chaudhary, Assistant Commissioner, Land
Custom Station, Sonauli against accused Deepak Bajaj under section
135(1)(i) Customs Act 1962.
The prosecution case, in brief, is that at present complainant
has been posted in Land Custom Station, Sonauli, District
Mahrajganj as Assistant Commissioner and happens to be a public
servant and is filing the present complaint in discharging his official
duties. Before filing this complaint, necessary approval under
section 137(1), Customs Act,1962 had been obtained from
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Page 190
190 Commissioner of Customs, Lucknow on 21.05.2014l during the
course of checking on 02.04.2014 at 20.30 Hrs. offices of Border
Security Force/S.S.K. Sonauli restrained one person and during
search of the said person, one gold biscuit wrapped in white clothe
was recovered from pocket inside his jacket, second gold biscuit
hidden in backside pocket of pantaloon and few small gold made
granuals etc. which had been packed in a polythene, were
recovered from his waist and few gold coins were recovered from
his shoes. Thereafter, the said accused was brought at Campus of
S.S.B. Sonauali for preliminary investigation . S.S.. weight
recovered gold on which it established at 4320gms. The above-said
recovered gold was tested and weighed through Messrs. Tanish
Jewelers, Nautanwa market. Purity of gold biscuit established at
999.9 percent and purity of gold coins established at 70% and
purity of small gold granuals established at 99.850 percent.
Messrs. Tanish Jewelers found the estimated value of the said
gold at Rs.1,09,12,590/-. During personal Jamatalashi of the
above-said accused Deepak Bajaj, SSB Officers recovered 10 Indian
currency notes of Rs.500/- denominations, which were handed over
to Custom Officers. On 03.04.2014 SSB Officers handed over the
said recovered gold, Indian currency and other recovered articles
alongwith accused Deepak Bajaj to officers of Land Custom Station,
Sonauli. Thereafter, officers of Custom Department called two
independent witnesses S/Shri Vijay Madhesiya & Sir Randhir Singh
Bar & Bench (www.barandbench.com)
Page 191
191 for witnessing the proceedings. In the presence of both
independent witnesses, officers of Custom Department called local
Goldsmith Shri Vinod Kumar, Messrs. Tanishk Jewelers, Nautanwa
market for weighing recovered gold and for testing purity. After
carrying out weight of gold, weight of biscuit of gold 1000 gms,
second gold biscuit 500 gms, 58 gold coins 1964 gms and small gold
granuals were found 856 gms. The purity and price of the said
recovered gold was found the same which the said goldsmith had
told to S.S.B. Officers. When he was shown Test/Authenticity
Certificate produced by Officers of S.S.B., then while identifying the
said Test Certificate. He averred that the report which he issued
to S.S.B. Officers on letter head on 03.04.2014 the same is correct.
During the course of inquiries made from accused, on 04.04.2014
statement of accused was recorded under section 108, Custom
Act, wherein, he admitted that gold recovered from his possession
was being brought from London he had purchased the said gold
from Gold Bullion of U.K. He further recorded in his statement
that he did not make any declaration of recovered gold on arriving
at the Kathmandu Airport. He admitted this fact also that he
knows that Non-Indian is not allowed to bring gold in India from
abroad. After having believed of this fact that foreign gold
recovered was being brought in India from Nepal by way of
smuggling which is violation of Notification No.09/1996 CUS dated
22.01.1996 and other articles recovered is violation of various
Bar & Bench (www.barandbench.com)
Page 192
192 notifications & regulations. The above-said gold and all the above-
stated articles were seized under section 111, Custom Act and
other articles which were used in hiding gold in which old cloth,
shoes, socks were seized under Section 110, Custom Act and
Panchnama in this context was prepared on 03.04.2014 in the
presence of two independent witnesses. Officers prepared Memo of
Recovery-cum-Panchnama and the said Panchnama was signed by
offices, accused and two independent witnesses. Recovered gold,
Indian currency and other articles were seal-packed in three
individual packets on which accused, officers and witnesses put
their respective signatures. On 04.04.2014 statement of accused
Deepak Bajaj was recorded under section 108, Custom Act,
wherein, he admitted the whole sequence of occurrence and
revealed the fact of bringing the said gold to New Delhi via Nepal
having purchased from U.K. He further admitted that he knows
that bringing gold in India from U.K. via Nepal is not permitted.
Thereafter on 04.04.2014 accused Deepak Bajaj was t taken under
arrest under section 104, Custom Act and was sent to District Jail,
Varanasi. On the basis of above-stated grounds complainant
prayed for sentencing accused Deepak Bajaj under section 135(1)(i)
Custom Act.
Fining sufficient grounds available for taking cognizance
against accused under section 135, Custom Act, on 27.05.2014
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Page 193
193 court framed charge, cognizance was taken and having registered
criminal case, accused was summoned from jail on which accused
appeared in court.
Thereafter, under section 244 Cr.P.C. PW- 1 Kalpnath Rai,
Inspector, Custom Department Sonauli was examined on behalf of
prosecution, on the basis of the same, on 03.03.2017 charge was
framed under section 135, Custom Act, against accused Deepak
Bajaj. Accused denied the charge & claimed trial.
On behalf of prosecution in documentary evidence photocopy
of seizure memo dated 03.04.2014 Ex. P-21, photocopy of memo of
arrest Ex.P-2, caption of gold seized dated 02.04.2014 Ex.P-3,
photocopy of Memo of Recovery dated 03.04.2014 Ex. P-4,
photocopy of three receipts/Estimate Slips dated 03.04.2014 issued
by Tanish Jewelers, Opposite P.W.D., Thuthi Chowraha, Nau9tanwa
as Ex.P-5, 6 and 7, photocopy of Panchnama/memo of Recovery
dated 03.04.2014 Ex. P-8, List of articles of Deepak Bajaj Ex P-9,
Testing & Weighing Certificate of gold issued by Vinod Kumar
Verma, Messrs. Tanish Jewelers, Nautanwa, District Mahrajganj
dated 03.04.2014 as Ex.P-10, photocopy of Bullion Invoice 31st
March, 2014 Ex.P-11, photocopy of Bullion Invoice dated 25th
February, 2014 Ex.P-12, photocopy of invoice dated 31.03.2014 Ex.
P-13, photocopy of statement of accused Deepak Bajaj dated
03.04.2014 recorded under section 107, Customs Act, Ex.P-14,
Bar & Bench (www.barandbench.com)
Page 194
194 statement of accused Deepak Bajaj recorded on 04.04.2014 Ex.P-
15, original approval letter dated 21.05.2014 of Shri Ajay Dixit,
Commissioner of Custom Aliganj, Lucknow Ex. P-16 and original
Complaint Ex.P-17, photocopy of particulars of case article seized
Ex.P-18, true photocopy of original register of godown 2014-15 was
filed as Ex.P-19 and under section 246 cr.plc. in oral evidence
Kalpnath Rai, Inspector, Custom Department was examined as PW-
1 and N.K. Srivastava, Superintendent, Central Excise Duty
Department, Lucknow as PW- 1 and Mahattam
Superintendent/Costly Goods Godown Incharge, Customs,
Mahrajganj was examined as PW- 3.
Accused Deepak was examined under section 313 Cr.P.C. on
31.05.2017.l in his examination under section 313 Cr.P.C. accused
revealed about gold recovered that misappropriations have been
committed in quantity of gold. I have deposited custom duty Rs.
25 lakh. He stated that most of the things stated in his statement
recorded under section 108, Custom Act under illegal pressure.
With regard to evidence adduced by witnesses examined on behalf
of prosecution, he stated that he does not know anything. Case
was initiated under misconception. He further stated that he would
produce more documentary evidence. Heard written argument filed
by learned counsel for accused, oral argument and contentions
Bar & Bench (www.barandbench.com)
Page 195
195 putforth by learned Senior Prosecution Officer and perused the
file.
On behalf of prosecution party, learned Prosecution Officer
has raised contention that they have examined three witnesses, all
those witness have supported the prosecution case fully. S.S.B.
Officers had caught accused Deepak Bajaj red-handed carrying
unauthorized gold in India via Nepal Border. According to Indian
Law, brining gold in India from any third country via Nepal is crime
and bringing gold from any third country even on satiating
payment of custom duty via Nepal is not permitted. Accused
himself has admitting carrying gold in his possession. Accused has
categorically confessed his offence in his statement under section
108, Custom Act and statement recorded under section 108,
Custom Act is entitled to be read in evidence. Accused himself has
admitted this fact in his statement under section 108, Custom Act
that he knew this fact that brining gold from any third nation via
Nepal is crime. The intentions of accused were of smuggling of
gold since inception and as such, he did not make declaration of
gold carrying with him at Kathmandu Airport at the Border of
India towards Nepal. Prosecution case has proved against accused
beyond doubt.
On perusal of file in the light of contention putforth by learned
Prosecution Officer, it reveals that on behalf of prosecution party
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Page 196
196 Kalpnath Rai, Inspector, Custom Department Sonauli, District
Mahrajganj has be examined as PW-1 under section 244 Cr.P.C.,
while supporting prosecution case beyond doubt, he has averred in
his cross-examination that in the month of April, 2014 he had been
posted in Custom Department, Sonauli as Inspector. On
03.04.2014 S.S.B. officers brought one accused with recovered
articles alongwith necessary documents in the Custom Office. I
called panch at once. It was 15.10 Hrs. Vijay Kumar Madhesiya and
Randhir Singh were told that officers of S.S.B. are handing over few
foreign goods and accused for which you have to remain present as
witnessing witnesses. Assayer Vinod Kumar was called for testing
and weighing. Vinod Kumar Assayer had submitted report about
total Four thousand Three Hundred twenty gram gold worth Rs. One
Crore Nine lakh Twelve thousand Five Hundred Ninety, handed
over by S.S.B.. In addition to this, foreign currency Nepali & Indian
and one mobile handset Blackberry, one passport, Nepali SIM Card
and few old clothes recovered from accused were handed over by
S.S.B. and several papers pas wee also handed over by S.S..
accused Deepak Bajaj revealed that he is a British citizen and he
had brought recovered gold having purchased from London, U.K.
He further revealed that when he was coming in India via Nepal,
the officers of S.S.B. present at Border carried out his checking on
02.04.2014 and the above-said gold was recovered. Accused
further revealed that he had not made declaration of this gold at
Bar & Bench (www.barandbench.com)
Page 197
197 Kathmandu Airport. Thus, on having believed that recovered gold
was brought in India illegally via Nepal, which amounts to
violation of Custom Act, therefore, it was seized. Old clothes and
shoes used in hiding gold were also seized under Custom Act, all
recovered articles were seal-packed in individual packets. We
officers, panch and Deepak Bajaj put our respective signatures on
all the four packets. Panchnama was prepared on the spot. All the
original documents submitted by S.S.B. are available before me in
departmental file, copy of which are placed on record, which were
proved by witness, those were marked as Ex. P-1 to Ex. P-7.
Panchnama is available before him in original, in departmental file,
photocopy of which was placed on case file, which was proved by
witness, it was marked as Ex.P-8. Annexure with Panchnama are
available before me in original, photocopy of which are available
before him, which were proved by witness, it was marked as Ex.P-
9. Assayer Report in original is available before me in
departmental file, provided by w, on which it was marked as Ex. P-
10. Similarly wt proved the original receipts which were marked
Ex.P-1 to 13 respectively. Accused recorded his statement under
section 107, Custom Act himself in his own handwriting and out
signatures on it, his signatures appear on it. Original statement is
available before him in department file, photocopy of which is
placed on record, which was proved by witness and marked as Ex.
P-14. Thereafter, statement of accused under section 108, Custom
Bar & Bench (www.barandbench.com)
Page 198
198 Act was recorded when he appeared before the Superintendent N.K.
Srivastava in compliance of summons issued. Before recording his
statement, he had been given to understand about the justifiability
of this statement that it may be read against him in evidence.
Thereafter, he recorded his statement voluntarily and put
signatures on it. Original statement is available before him in
department file on which signatures of N.K. Srivastava,
Superintendent appear. Witness identified his handwriting and
signatures because he happens to be his higher officer. Photocopy
of this was placed on case file which was proved by witness, it was
marked as Ex.P-15. Shri Ajay Dixit, Commissioner, Customs,
Lucknow has given necessary approval for filing complaint, original
approval is placed on case file on which signatures of
Commissioner, Ajay Dixit appear. Witness identified his
handwriting and signatures it was marked as Ex.P-16. Assistant
Commissioner Custom Sonauli Shri Brijender Chaudhary has filed
complaint under his signatures on the basis of letter of approval.
Witness identified his handwriting and signatures. His signatures
appear on complaint, it was marked as exP-17. During his cross-
examination this witness has not averred any such contradictory
fact has been extracted which would have falsified the
prosecution case or would have created suspicion on it. This
witness has averred in his cross-examination l that “I called one
party namely Vinod Kumar Verma from Nautanwa by making phone
Bar & Bench (www.barandbench.com)
Page 199
199 call. Party tested and weighed gold in my presence. In the gold
recovered from him were 58 piece of gold coins, one Kg. and half
Kg. was in the form of biscuits/bar and 8.56 gms gold was in the
form of granuals. I had recorded statement of Deepak Bajaj under
section 107. It is wrong to suggest that accused Deepak Bajaj
would have intended to deposit duty in Custom Post at Sonauli
and earlier to that only, officers of Border Security Force would
have taken him under arrest.
Second witness on behalf of prosecution party PW- 2 N.K
Srivastava has averred while supporting the prosecution case in
his examination-in-chief that in the year 2014 he had been posed in
Custom Department Sonauli as Superintendent. On 04.04.2014 on
appearance of accused Deepak Bajaj in compliance of summons
issued under section 108, Custom Act, he had recorded his
statement of section 108, Custom Act, in my presence. After
rerecording his statement ins own handwriting he had put his
signatures on it voluntarily. On going through Ex.P-15 witness
deposed that this is the same statement recorded by accused on
which his signatures appear. During cross-examination this
witness deposed while supporting prosecution case that on
03.04.2014 at about 3.00 o’clock I was present in m office. On
04.04.2014stof Deepak Bajaj of section 108 was placed before me.
before recording statement fop accused of section 108, he was
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Page 200
200 given to understand that you inform your family about this fact that
the statement you are going to made, would be read against you
in evidence. He had consumed one hour in making this statement.
Accused Deepak Bajaj is resident of U.K. He was told this fact
that if you wish to deposit duty, then you may do so because no
any such provision is available in Land Custom Act. In statement
recorded under section 108, I was asking question and he used to
give reply.
Witness PW- 3 Mahattam, Superintendent/godown Incharge,
Custom Department, Nautanwa, District Mahrajganj examine on
behalf of prosecution, has deposed in his examination-in-chief that
he is carrying original inventory of the case with him and godown
register with hm. Case articles seized in this case were deposited
in my godown through Inventory memo, entry of which is lying
recorded in Godown Register at Deposit No.1/14-15/S.N.L. dated
07.04.2014. Original Inventory Memo which is attested by
Magistrate, is available before me, its photocopy is filed having
attested by witness, it was marked as E.P-18. Original register is
available before me, its photocopy duly attested by witness is filed,
it was marked as Ex.P-19. During the cross-examination
conducted from this witness under section 246 Cr.P.C. also,
defence party could not get extracted any fact contrary to
prosecution case.
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Page 201
201
Defence party has filed written argument on record in
defence of accused and while filing written argument, he has
argued orally also that gold stated to have been recovered from the
possession of accused, the said gold had been purchased by
accused personally from shops of U.K. In support he has placed on
record proper bills. Accused had made payment of the price of said
gold purchased, from his account. Accused is Non-Resident Indian
who had brining the said gold in India for marriage of his daughter
sothat he can get ornaments prepared from good goldsmith of India
for marriage of his daughter. Having entered in India from Nepal
Border, accused wanted to make declaration of the said gold at
Custom Office and to pay the custody duty to be levied on it, but
accused was not provided this opportunity. Before reaching at the
Office of Custom, S.S.B. Officers took accused under arrest.
Thereafter, accused requested to S.S.B. Officers several times and
later on, said to Custom Officer about it that he wants to pay the
custom duty on it having made declaration of gold which he had
been carrying with him, but the said officers put deaf ears and
challanned him forcefully. Accused has not made his statement
under Section 108, Custom Act voluntarily rather this statement
has been obtained from him forcefully and nor accused has made
any such averment in his statement that he had got knowledge of
this fact that he would have been committing any offence. Accused
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Page 202
202 has been implicated wrongly. No any prosecution case has proved
against accused, therefore, accused be acquitted.
On hearing and on perusal of file it comes out that first of
all, objection has been raised on behalf of defence party that he
wanted to deposit custom duty in the Custom Office about gold
carrying with him, but despite requests made by him officers of
S.S.B. and Custom Department did not provide him opportunity and
challanned him forcefully. In the opinion of the court, there is no
any legal force in this objection raised on behalf of defence party
because bring gold of any third country in India through Nepal is
not allowed and any person cannot bring gold of any third country
via Nepal even on payment any8 duty8 or tax even. Therefore,
there remains no any significance in this contention that Nepal
Border accused wanted to make declaration of gold carrying with
him under Custom Act and wanted to pay duty or tax and he was
not provided opportunity to pay such duty or tax. Vide Notification
No. 09/96 (N.T. –Custom) dated New Delhi 22nd January, 1996
issued by the Department of Revenue of Finance Ministry of Union
of India, bringing any banned article i.e. gold made in third nation in
India is banned in this connection, learned counsel for defence
parity asked question during cross-examination of PW-2, in reply he
had averred that accused Deepak Bajaj is resident of U.K. . I had
not told him this fact that if you wish to deposit duty, then you may
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Page 203
203 do so because no any such provision is available in Land Custom
Act meaning thereby irrespective of any person is India or Non-
Indian, cannot bring gold in India of any third country via Nepal
and provision is not available for it even to bring after satiating
duty. In such situation, while prevailing this fact too, accused
wanted to pay any duty or tax about gold carrying with him in the
Office of Custom at Nepal Border. It does not appear that accused
would have been earning any benefit out of it. This fact too is
significant here that accused Deepak Bajaj himself has admitted this
fact this gold, he had been carrying belonged to U.K., it cannot be
deemed any bonafide intention about it because neither he made
declaration of gold carrying with me at Kathmandu Airport in Nepal
and made any such type of declaration at the Check-post towards
Nepal at Indo-Nepal Border. Accused Deepak Baja himself has
admitted this fact in his statement recorded under section 108,
Custom Act that he had got knowledge of this fact that caring gold
in India from abroad via Nepal is crime. In the aforementioned
situation it is not possible to give any benefit of this fact to defence
party.
An another contention/objection has bent taken by learned
counsel for defence party in defence of accused that gold stated to
have been recovered from the possession of accused, out of those
58 recovered coins stated to have been brought by accused having
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Page 204
204 hiding in shoes, but no any such shoes have been produced in the
court and nor any shoes etc. have been mentioned. In such
situation, recovery shown from possession of accused becomes
suspicious, therefore, accused be acquitted. There seems to be no
any force in this contention putforth by old counsel for defence
party because accused himself has stated about recovery of gold
from his possession, he has claimed his own gold and during the
whole trial and thereafter, accused has not made this averment
in his defence that recovered gold did not belong to him. This fact
does not put any adverse effect as to how had been brining gold,
whether he was bringing gold hiding in shoes or in some other
thing, because when accused has admitted this fact before court
also alongwith his statement of section 108 Custom Act that
recovered gold belong to him and has been recovered from his
possession. Therefore, in such situation, now, there is no need to
adduce any evidence for proving this fact on the part of
prosecution. However, Panchnama Ex.P-3 available on record,
from which it is evident even old cloth, shoes used in hiding gold
had have also been seized and in regard to the facts recorded in
the said Panchnama, accused himself has put his signatures with
two independent witnesses on panchnama. The significant fact is
that accused was carrying gold of third country U.K. through
Nepal Border he was caught by S.S.B. officers and S.S.B. and
Custom Officer recovered gold from his possession.
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Page 205
205
Learned counsel for defence party has raised an another
contention that statement of accused recorded under section 108,
Custom Act cannot be read in evidence because the said statement
has been obtained from accused by showing him fear. This court
does not coincide with this contention of learned counsel because
on perusal of statement recorded under section 108 Custom Act
available on case file, it reveals that Deepak Bajaj himself has
recorded the said statement in his own handwriting in which he
has stated that he brought gold recovered from him in India via
Nepal Border, which had been made in U.K.; during trial in court
and during argument too, he has admitted this fact that the gold
recovered, has been recovered from him only. In such situation,
this contention does not remain with any significance that statement
of accused under section 108 would have been obtained by
terrorizing and showing fear. Hon’ble Supreme court has expressed
this opinion in his judicial citation K.I. Pawanni versus Assistant
Collector, Central Excise Collectorate 1997 (34) ACC page 512 that
where accused would have made confessional statement of his
offence before Custom Officer under section 108, Custom Act and
later on, deviates from the fact of the said admission before the
court, even then such confessional statement would be read in
evidence and accused may be convicted on the basis of the said
confessional statement because at the time of recording statement
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Page 206
206 under section 108, Custom Act according to the Hon’ble Supreme
Court the said person is not accused the moment he would have
been recording statement before the Custom Officer, the said
Custom Officer too does not fall under the category of Police
Officer. In such situation, defence party does not get any benefit
out of this contention also.
Learned counsel for defence party has raised any another
contention in defence of accused that on behalf of prosecution
party, witnesses to panchnama have not been examined in court.
On account of not examining witnesses to panchnama, fact of any
recovery of above-said gold etc. from accused or prosecution case
has not proved. Therefore, accused be acquitted. There seems to
be no any force in this contention of learned counsel because it is
clear here that accused Deepak Bajaj had admitted his offence
again in his statement recorded under section 108, Custom Act,
which means he his admitted the fact of bringing gold of any third
country U.K. in India via Nepal and before court also, he has
averred that the said gold belongs to him and has been recovered
from his own possession. In such situation, there remains no need
to produce independent witness or panch for evidence for proving
the panchnama. Signatures of accused Deepak Bajaj are appearing
on panchnama Ex. P-3 annexed in file and he has not made any
denial to the said signatures. In such situation, producing any
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Page 207
207 witness of panchnama does not put any adverse effect on
prosecution case.
With regard to other contentions raised on behalf of
prosecution party in their written argument, learned Prosecution
Officer has submitted that accused himself has admitted in his
statement recorded under section 108, Custom Act and before
court also that gold has been recorded from his possession only and
gold of any third country cannot be brought in India via Nepal even
on payment of duty or tax, hence, the said contention is not
sustainable. On due perusal of legal provision provided by the
Hon’ble Supreme Court in this context in eh matter of K.K.
Pawanni versus Assistant Collector Central Excise Collectorate, it
also comes out that according to this provision the moment
statement under section 108 Custom Act is being recorded, he does
not remain under the category of accused and custom officer
before him statement is being recorded, that custom officer too is
not covered under the category of police officer. In such situation,
if any confessional statement is made about the offence in those
statement, then the said confessional statement would be
admissible in evidence, irrespective of the same accused/person
deviates from the fact of the said confession later or avers that
the said confessional statement was obtained forcefully or
putting under fear. Here, in his statement of section 108, Custom
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Page 208
208 Act, accused has admitted recovery of the said gold from his
possession itself and he has admitted this fact before the court
also. Now, as far as the this contention is concerned that accused
wanted to make declaration about he said gold and to pay the duty
or tax in the Office of Custom Duty, then this wish of accused had
not got any significance because in the light of notification of the
Union of India bearing No. 09/96(N.T. –Custom) dated New Delhi
22nd January, 1996 gold made in any third country cannot be
brought in India via Nepal even on payment of tax or duty. Accused
himself has admitted this fact also in his statement recorded under
section 108, Custom Act that he had got knowledge of this fact that
this gold made in third country i.e. U.K. he is carrying in India via
Nepal, is a criminal act. Under the aforesaid facts & circumstances,
there seems to be no force in other contentions raised by learned
counsel for defence party in his written argument.
In the opinion of the court, on the basis of evidence adduced
on behalf of prosecution, charge of offence under section 135(1)(i)
Custom Act proves against accused Deepak Bajaj beyond doubt,
therefore, accused Deepak Bajaj is liable to be convicted for the
offence punishable under section 135(1)(i) Custom Act.
Accordingly, accused Deepak Bajaj is convicted for the charge
of offence punishable under section 135(1)(i) Custom Act in Criminal
Complaint Case No. 765/2014. Accused is on bail, having cancelled
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Page 209
209 his personal bond and surety bond, sureties are discharged from
their liabilities. Today accused is present in court he be taken in
judicial custody. Ad would be heard on the quantum of sentence.
Dated: 20.07.2017 Sd/-
(Umakant Jindal) Special Chief Judicial Magistrate
Varanasi
Heard learned counsel of convict and Senior Prosecution
Officer of Union of India on the quantum of sentence.
Learned counsel for convict has contended that accused is
Non-Indian British citizen and on account of this case, he has not
been able to meet is family & children for the last about three and
a half year. The whole business established by accused in U.K.
has absolutely ruined and he has reached at the verge of
starvation. Prayed that considering circumstances, in interest of
justice, he be punished by minimum of monetary fine.
While rebutting the above-said contention of defence party,
learned Prosecution Officer of Union of India has prayed for
punishing accused with maximum sentence.
On hearing on the quantum of sentence and perusal of file
keeping in mind the circumstance that accused is Non-Indian British
citizen, on account of seizing his passport in this case, he has not
been able to meet is family for the last more than three years.
Pashas not revealed any other criminal history or conviction of
accused in any case. Therefore, keeping in view the facts &
circumstances of the case, sentencing accused Deepak Bajaj with
simple imprisonment of one year and fine of Rs. 75,000/- (Seventy
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Page 210
210 five thousand only) under section 135(1)(i) Custom Act seems to be
justifiable.
Order
While holding accused Deepak Bajaj guilty under
secton135(1)(i) Custom Act,1962 in Criminal Complaint No.
765/2014, accused Deepak Bajaj is sentenced to undergo one year
simple imprisonment and fine of Rs. 75,000/- (Seventy five
thousand). In case of default in payment of fine, accused would
have to undergo three months additional imprisonment. Period
spent by accused in jail, if any, would be adjusted out of the
sentence of simple imprisonment imposed under section 428 Cr.P.C.
Having prepared sentence warrant of accused be sent in District Jail
for undergoing sentence.
Dated: 20.07.2017 Sd/- (Umakant Jindal)
Special Chief Judicial Magistrate
Varanasi
Today judgment has been pronounced today in open court
duly signed & dated.
Dated: 20.07.2017 Sd/- (Umakant Jindal)
Special Chief Judicial Magistrate Varanasi
//True Transalted Copy//
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211 ANNEXURE-P19
IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal
Crl. Writ Jurisdiction Case No. 1209 of 2016
Arising out of PS. Case No. - null Year - null Thana - null District - PATNA =========================================
Dipak Bajaj, Son of Late Awat Ram Bajaj, Resident of House No. 12/6 - Flaxley Road, Modem, SM46L.J, London (UK)
… …..Petitioner
Versus
1. Union of India through Department of Revenue, Government of
India, North Block, New Delhi-110 001
2. The Department of Revenue through its Secretary, North Block,
New Delhi-110 001
3. The Secretary, Department of Revenue, Government of India,
North Block, New Delhi-110 001
4. The Chief Commissioner of Customs (Preventive) Zone Patna, 4th
Floor, C.R. Building, Birchand Patel, Path, Patna - 800001
5. The Joint Commissioner, Customs (Preventive) Zone Patna, 4th
Floor, C.R. Building, Birchand Patel, Path, Patna- 800001
...... Respondents
=========================================
Appearance :
For the Petitioner : Mr. Amit Pandey, Advocate
Mr. Rakesh Chandra, Advocate
For the Respondents : Mr. S. D. Sanjay, Additional Solicitor
General
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Page 212
212 Mr. Satya Prakash Tripatty, Sr. S.C.,
Customs
Mr. Anshay Bahadur Mathur, C.G.C.
========================================
CORAM: HONOURABLE MR. JUSTICE BIRENDRA KUMAR
ORAL JUDGMENT
Date: 26-07-2017
Heard learned counsel for the parties.
2. A preliminary objection has been raised by Mr. S. D. Sanjay,
Additional Solicitor General to the respondents-Union of India
regarding maintainability of this writ application under Article 226 of
the Constitution of India before this Court on the ground that entire
cause of action arose within the tectorial jurisdiction of the been
filed in the Patna High Court.
3. Contention of the learned counsel is that indisputably the
petitioner claims to be a non-resident Indian and a business man in
the United Kingdom. The Custom Officials seized gold and foreign
currency from the possession of the petitioner at LCS, Sonauli in the
district of Maharajganj in the State of Uttar Pradesh near Indo-Nepal
Border. The petitioner was apprehend and produced before the
learned Chief Judicial Magistrate, Varanasi and sent to judicial
custody on 27.05.2014. Subsequently, prosecution of the petitioner
was sanctioned and launched at Lucknow. The petitioner was
released on bail by the Hon'ble Allahabad High Court on 29.01.2015
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Page 213
213 vide order passed in Criminal Misc. Bail Application No. 18322 of
2014. The proceeding of adjudication for confiscation of the gold
was also held and completed at Allahabad.
4. Thereafter, the petitioner filed application dated 25.01.2016
vide Annexure-4 before the Compounding Authority for
compounding of the aforesaid case. The term "Compounding
Authority" is defined in Rule 2(C) of the Customs (Compounding of
Offences) Rules, 2005 as follows:-
"Rule 2(C) Compounding Authority means the
Chief Commissioner, Customs having
jurisdiction over the place where the offence
under the Custom Act, 1982 has been or
alleged to have been committed".
5. According to learned counsel, a bare perusal of the aforesaid
provision would make it abundantly clear that the Chief
Commissioner, Customs having jurisdiction over the place where the
offence was committed (in the present case in the State of Uttar
Pradesh) is the Compounding Authority for the present case.
Therefore, by necessary implication, the application of the petitioner
vide Annexure-4 was filed before the Chief Commissioner having
jurisdiction in the State of Uttar Pradesh.
6. Learned counsel has pointed out that the Chief Commissioner,
Customs having seat at Patna is presently exercising territorial
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Page 214
214 jurisdiction over the State of Uttar Pradesh, Bihar and Jharkhand as
the Compounding Authority. Therefore, the petitioner filed
Annexure-4 for compounding before the Chief Commissioner having
seat at Patna. During the pendency of the aforesaid petition, this
writ application was filed for issuance of mandamus commanding
the respondent-authorities to allow the application of the petitioner
dated 25.01.2016, vide Annexure-4. However, during pendency of
the writ application, Annexure-4 was rejected by the Compounding
Authority by order dated 16.01.2017 vide Annexure-4/2 to the
counter affidavit. Thereafter, the petitioner field LA. No. 195 of 2017
seeking leave of this Court to amend the prayer portion by adding
that appropriate writ/order be issued, setting aside order dated
16.01.2017 vide Annexure-4/2 issued under the signature of the
Compounding Authority.
7. Learned counsel for the petitioner does not dispute
the aforesaid factual position. However, submits that since the
Compounding Authority passed the order at Patna, this Court has
jurisdiction to entertain this writ application under Article 226 of the
Constitution of India as part of the cause of action arose within the
territorial jurisdiction of the Patna High Court also. Article 226(2)
reads as follows:-
"226 (2) The power conferred by clause (1) to
issue directions, orders or writs to any
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Page 215
215 Government, authority or person may also be
exercised by any High Court exercising
jurisdiction in relation to the territories within
which the cause of action, wholly or in part,
arises for the exercise of such power,
notwithstanding that the seat of such
Government or authority or the residence of
such person is not within those territories."
8. A bare perusal of the provisions of Clause 2 above
would reveal that the power conferred by Clause 1 may be
exercised by any High Court exercising jurisdiction in relation to the
territories within which the cause of action wholly or in part arises
for the exercise of such power, notwithstanding that the seat of
such government or authority or the residence of such persons is
not within those territories. In the present case, no cause of action
arose within the territorial jurisdiction of this Court. The application
of the petitioner was filed before the Compounding Authority
exercising territorial jurisdiction on the place of offence i.e. the
chief Commissioner having jurisdiction over the State of Uttar
Pradesh. Therefore, the petitioner's grievance arose beyond the
territorial jurisdiction of this Court. A similar question was there in
Aligarh Muslim University and Another v. Vinay Engineering
Enterprises (P) Ltd. and Another reported in [(1994) 4 SCC
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Page 216
216 710] where the Hon'ble Apex Court in paragraph 15.2 stated as
follows:-
'75. 2 We are surprised, not a little, that the
High Court of Calcutta should have exercised
jurisdiction in a case where it had absolutely
no jurisdiction. The contracts in question were
executed at Aligarh, the construction work was
to be carried out at Aligarh, even the contracts
provided that in the event of dispute the
Aligarh Court alone will have jurisdiction. The
arbitrator was from Aligarh and was to
function there. Merely because the respondent
was a Calcutta based firm, the High court of
Calcutta seems to have exercised jurisdiction
where it had none by adopting a queer line of
reasoning. We are constrained to say that this
is case of abuse of jurisdiction and we feel that
the respondent deliberately moved the
Calcutta High Court ignoring the fact that no
part of the cause of action had arisen within
the jurisdiction of that Court. It clearly shows
that the litigation filed in the Calcutta High
Court was thoroughly unsustainable. "
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Page 217
217 9. In National Textile Corpn. Ltd. and Ors. v. M/s. Haribox
Swalram and Ors. [JT 2004 (4) SC 508] where the Hon'ble Apex
Court in paragraph 17 stated as follows:-
"17. As discussed earlier, the mere fact that
the writ petitioner carries on business at
Calcutta or that the reply to the
correspondence made by it was received at
Calcutta is not an integral part of the cause of
action and, therefore, the Calcutta High Court
had no jurisdiction to entertain the writ
petitioner and the view to the contrary taken
by the Division Bench cannot be sustained. In
view of the above finding, the writ petition is
liable to be dismissed..... ".
10. Considering the aforesaid authority and the provisions of
Clause 2 of Article 226 of the Constitution of India as well as the
fact that no cause of action for filing of this writ application arose
within the territorial jurisdiction of this Court, in my view, this writ
application is not maintainable here at and is fit to be dismissed.
11. Learned counsel for the petitioner has relied on the Hon'ble Apex
Court judgment in the case of KUSUM INGOTS & ALLOYS LTD.
Versus UNION OF INDIA reported in 2004(168) E.L.T. 3 (S.C.).
12. In my view, the referred case is not applicable in the facts and
circumstances of this case as no part of cause of action arose within
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Page 218
218 the territorial jurisdiction of this Court and in the case of KUSUM
(supra) also the Hon'ble Apex Court had considered that cause of
action or part thereafter even a smallest part arisen within the
territorial jurisdiction of the High Court would be sufficient to confer
jurisdiction to entertain application under Article 226 of the
Constitution of India. In the present case no part of cause of action
Uic iciTuunai jurisdiction oi tms court. Hence, the case (supra) is
not helping the petitioner.
13. In the result, this writ application is dismissed as devoid of
merit.
(Birendra Kumar, J)
Kundan/-
AFR/NAFR AFR
CAV DATE N.A.
Uploading Date
27.07.2017
Transmission Date
27.07.2017
//True Copy//
Bar & Bench (www.barandbench.com)
Page 219
219 ANNEXURE-20
In The Court Of Sessions Judge, Varanasi.
Criminal Appeal No. 173 Of 2017
Deepak Bajaj Vs. State of U.P
Order Sheet
05.08.2017 Today this Criminal Appeal is filed by appellant. Heard
Advocates are not present to court put up on the date 11-8-17 for
hearing on admission.
11.08.2017
Case called out.
Learned counsel Shri Manoj Kumar Singh is present for proposed
appellant Deepak Bazaz.
None is present for proposed respondents.
Heard the arguments raised by above mentioned learned counsel on
admission. Perused the record.
This proposed criminal appeal has been instituted with a challenge
to judgment dated 20-7-2017 pronounced by the Court of learned
Special Judicial Magistrate, Varanasi in complaint case no. 765 of
2014 Government of India versus Deepak Bazaz offence under
Section 135 (i) Custom Excise Act 1962. Vide this impugned
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Page 220
220 order/judgment the learned lower court has convicted the proposed
appellant/accused Deepak Bazaz for above mentioned offence and
has sentenced him to undergo a simple imprisonment for one year
and to deposit an amount of Rs.75,000/- with the condition than in
case of default of payment of fine he shall undergo further
imprisonment for 3 months.
The impugned judgment has been challenged on various grounds
mentioned in detail in the memo of this proposed criminal appeal.
According to the report submitted by the office it is within
jurisdiction and limitation.
In the interest of justice it is admitted as criminal appeal. Be
registered accordingly.
Hear also on applications 6 B and 7 B.
Perused the record.
Application 6 B is moved with a prayer to stay the operation of
impugned judgment during the pendency of this appeal. In the
interest of justice the operation of impugned judgment is stayed up
to the extent that the accused/appellant shall deposit half amount of
the fine imposed by the learned lower court before he is released on
bail and the realization of half amount shall remain stayed during
the pendency of this appeal.
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Page 221
221 Application 7 B is moved with a prayer to release him on bail during
the pendency of this criminal appeal. In the interest of justice the
appellant is released on bail during the pendency of bail on
furnishing a personal bond of Rs.25,000/- and two sureties each in
the amount to the satisfaction of magistrate concerned. This
application is accordingly disposed of.
Issue notice to respondents.
Steps for notices by the appellant be taken within week.
Fixing 18.09.2017 for arguments hearing on this criminal appeal.
Sessions Judge.
Varanasi.
//True Copy//
Bar & Bench (www.barandbench.com)
Page 222
222 ANNEXURE-P21
To, Dated: 11.08.2017
THE COMMISSIONER OF CUSTOMS LUCKNOW,
HALLNO.3,5TH&11TH FLOOR,
KENDRIYA BHAWAN, SECTOR-H,
ALIGANJ, LUCKNOW
Subject:- Application for release of passport of Shri Dipak Bajaj
retained in the unit Complaint case No.765 of 2014 registered in the
court of CJM (Special) at Varanasi of LCS-Sonauli regards.
Sir,
Please refer to unit complaint case No.765 of 2014
registered in the court of CJM (Special) at Varanasi of LCS-
Sonauli, under which a case was registered against the
undersigned alleging illegal import of gold. Also refer to Order-In-
Original No.23 /2015 dated 02.03.2015 of the Additional
Commissioner Customs (P), Lucknow, which indicates that the
Passport no.511352051 of the undersigned has not been
confiscated. Further, it is brought to your notice that the Special
CJM court of Varanasi has pleased to pass a judgment dated
20.07.2017 (copy enclosed) under which the undersigned has been
convicted and a bail order date 20.07.2017 has also been issued
which interalia does not prescribed retention of passport as a
condition for bail. The undersigned has preferred an appeal against
the said judgment before the court of sessions, Varanasi which is
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Page 223
223 pending for hearing. The undersigned submits that the impugned
judgment of dated 20.07.2017 is under challenge and it suffers from
apparent legal infirmity and therefore, there is likelihood that the
said judgment and order of may be set aside in the appeal
proceedings.
Now as on date there are no encumbrances for release of the
passport of the undersigned by the customs Authority. Your kind
attention is drawn to the ratio laid down by Hon’ble Supreme Court
in case of Maneka Gandhi Vs. Union of India (AIR 1978 SC
597) wherein it has been held that right to freedom of movement is
embedded under Article 21 of the Constitution of India and cannot
be curtailed without the procedure established by law and following
the due process of law. Your attention is also drawn towards the
ratio laid down by the Hon’ble supreme court in case of Suresh
Nanda Vs. CBI (Criminal Appeal No. 179/2008) wherein it has
been held that even court does not have power to impound the
passport under the provisions of code of Criminal Procedure. Thus
retention of passport of the undersigned by the Customs Authority
who are not the proper Authority for impounding the passport is
abinito illegal and curtails the right guaranteed under Article 21 of
the Constitution of India to every person.
In view of above, you are requested to release the passport of
the undersigned as the undersigned has already complied the
conditions imposed for grating the bail.
Bar & Bench (www.barandbench.com)
Page 224
224 Any further communication can be done at my counsel’s Address:
Amit Pandey, Advocate
Wadhwas Chambers
Patna High Court
Patna
And C/o. Amit Pandey MIGH-295 Kankarbagh
Patna – 800020
And
Email to me: [email protected]
My contat No. 7096405139
Yours Sincerely
Sd/-
Deepat Bajaj
//True Copy//
Bar & Bench (www.barandbench.com)
Page 225
225 ANNEXURE-P22
OFFIE OF THE COMMISSIONER OF CUSTOMS (PREVENTIVE)
UTTAR PRADESH AND UTTARAKHAND
5TH AND 11TH FLOOR, KENDRIYA BHAWAN, SECTOR H,
ALIGANJ, LUCKNOW -226024
C.No.VIII(25)01-Legal/Appl-Dipak/HC-Pat/2017/2132
Dated 30.08.2017
To,
Shri. Dipak Bajaj
C/o. Amit Pandey
MIGH-295 Kankarbagh
Patna – 800020
Sub: Application for release of passpost of Shri. Dipak Bajaj – Regarding.
Please refer you letter dated 11.08.2017 on the above subject
requested therein release of the subject mentioned passport.
In this regard it is to inform you that your passport has been
detained as per the order dated 05.05.2017 of the Special CJM,
Varanasi. And Hon’ble Court has sentenced you with simple
imprisonment for one year and also imposed a fine of Rs. 75,000/-.
Sd/-
ASSISTANT COMMISSIONER (LAGAL)
//True Copy//
Bar & Bench (www.barandbench.com)
Page 226
226 IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) No. _____ _ OF 2017
IN THE MATTER OF:
Dipak Bajaj ….Petitioner
Versus
Union of India & Ors. ……Respondents
AN APPLICATION FOR EXEMPTION FROM FILING OFFICIAL
TRANSLATION TO
The Hon’ble Chief Justice of India and his Companion Justices of the
Supreme Court of India
The Humble Petition on behalf of the petitioner above named.
MOST RESPECTFULLY SHOWETH:
1. That the Petitioner in this Writ Petition seeks to challenge the
seizure and subsequent impounding of his passport by the
Customs Authority without the authority of law. It is the case
of the Petitioner before this Hon’ble Court that Petitioner’s
fundamental right under Article 21 of the Constitution of India
has been violated as his personal liberty has been restricted
by the seizure and subsequent impounding of his passport by
the Customs Authority without the authority of law.
2. That the original of P2, P3, P7 to P10 and P18 are in Hindi
language. According to the rules of this Hon’ble Court all the
documents are required to be translated into English by a
Translator appointed or approved by this Court.
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Page 227
227 3. That since the matter is urgent and the appointment of the
official translator and translation of the vernacular document
into English will take considerable time, and it will delay the
hearing of the matter, and therefore the petitioner have got
the same translated trough an Advocate.
4. That is in the interest of justice that the English translation of
the documents which are originally in Hindi as supplied by the
petitioner may be accepted for the purpose of hearing of the
present application.
PRAYER
It is therefore, most humbly prayed that this Hon’ble Court
may be pleased to:
i) Exempt the petitioner form filing the officially translated
copy of P2, P3, P7 to P10 and P18 and accept the
English translation of the same for the purpose of
hearing of the Special Leave Petition.
ii) Pass such further order/orders as this Hon’ble Court may
deem fit in the facts and circumstances of the present
case.
AND FOR THIS ACT OF KINDNESS THE PETITIONER SHALL
AS IN DUTY BOUND EVERY PRAY.
DRAWN BY: Adv. Renjith B. Marar & Adv.Vasudha Gupta for
M/s. Marar&Iyer FILED BY: DRAWN ON: 05.09.2017 FILED ON: 22.09.2017
LAKSHMI N. KAIMAL ADVOCATE FOR THE PETITIONER
Bar & Bench (www.barandbench.com)