2005 (5) TMI 650 - HC - Customs

Summary

Issues Involved:
1. Quashing of proceedings under Sections 482 Cr.P.C.
2. Allegations under Sections 120-B IPC, Section 135 of the Customs Act, 1962, and Section 85 of the Gold Control Act, 1968.
3. Impact of departmental adjudication on criminal proceedings.
4. Judicial precedents on continuation of criminal prosecution post departmental adjudication.

Issue-wise Detailed Analysis:

1. Quashing of Proceedings under Sections 482 Cr.P.C.:
The petitioner sought the quashing of proceedings against him in the case pending in the court of ACMM, New Delhi. The petitioner argued that the continuation of the proceedings was an abuse of the process of law, particularly since the departmental adjudication by CEGAT had already found no evidence against him.

2. Allegations under Sections 120-B IPC, Section 135 of the Customs Act, 1962, and Section 85 of the Gold Control Act, 1968:
The petitioner was one of the accused in a case involving the interception of a scooter carrying 250 gold biscuits of foreign markings, alleged to be smuggled. The search led to the recovery of significant amounts of currency and gold biscuits from the premises of the accused. The petitioner was implicated based on the allegations that he was knowingly involved in the fraudulent evasion of prohibitions imposed on the importation of gold into India.

3. Impact of Departmental Adjudication on Criminal Proceedings:
The departmental adjudication by CEGAT exonerated the petitioner, finding no evidence to connect him with the recovered gold or currency. The CEGAT set aside the penalties imposed on the petitioner, stating, "There is no evidence of any witness to the fact that the recovered gold was brought by the appellant." This finding was crucial in the petitioner's argument for quashing the criminal proceedings.

4. Judicial Precedents on Continuation of Criminal Prosecution Post Departmental Adjudication:
The judgment referenced several Supreme Court and High Court decisions to establish that departmental proceedings and criminal proceedings can proceed side by side. However, if departmental proceedings end in favor of the accused, continuing criminal proceedings would be a futile exercise and an abuse of the process of law.

- The Assistant Collector of Customs, Bombay and Anr. v. L.R. Melwani and Anr.: Established that departmental adjudication does not amount to a criminal trial, and hence, criminal prosecution is not barred by the principle of autre fois acquit.

- Uttam Chand and Ors. v. Income Tax Officer, Central Circle, Amritsar: Held that if the department itself finds no falsity in the return, criminal prosecution cannot continue.

- P. Jayappan v. S.K. Perumal, First Income-tax Officer, Tuticorin: Confirmed that criminal proceedings could be initiated even during the pendency of departmental adjudication.

- G.L. Didwania v. Income Tax Officer: Emphasized that if the departmental adjudication finds no false statement by the accused, criminal proceedings cannot be sustained.

- P.S. Rajya v. State of Bihar: Stated that if the charge could not be established in departmental proceedings, criminal prosecution should not proceed.

- K.C. Builders and Anr. v. The Assistant Commissioner of Income Tax: Ruled that if penalties are canceled by the Tribunal, criminal prosecution cannot continue as it would be an idle and empty formality.

Conclusion:
The court concluded that the continuation of criminal proceedings against the petitioner would be an abuse of the process of law, given that the departmental adjudication by CEGAT had exonerated him. The court allowed the petition and quashed the criminal proceedings against the petitioner, emphasizing that pursuing the case further would be a waste of judicial time and resources.