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Guidelines for launching of prosecution in relation to offences punishable under Customs Act1962

Customs - 27/2015 - Dated:- 23-10-2015 - Circular No. 27/2015 F.No.394/68/2013-Cus (AS) Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs (Anti-Smuggling Unit) New Delhi, the 23.10.2015 To All Chief Commissioners of Customs. All Chief Commissioners of Customs (Preventive), All Chief Commissioners of Customs, Central Excise and Service Tax, All Chief Commissioners of Central Excise and Service Tax, All Chief Commissioners of Service Tax, Chief Com .....

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ave been effected in the Customs Act and other relevant enactments. Amendments and changes were made in section 135 of Customs Act, 1962 vide Finance Act,2007 and Finance Act, 2013 relating to threshold limit/categorization of offences. Moreover, section 137 of Customs Act, 1962, has been amended and provisions of compounding of offences had been incorporated through Finance Act, 2004 and Finance Act, 2009. Amendments were made in section 104 of the Customs Act, 1962 through Finance Act, 2012 an .....

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ching prosecution issued vide Ministry's letter No. 394/71/97-Cus (AS), dated the 22nd June, 1999. 4. Guidelines for Prosecution: 4.1. Person liable to be prosecuted: As per the provisions of the Customs Act, 1962, prosecution may be launched against any person including legal person in respect of the offences covered under any of the sections namely sections 132,133,134, 135, 135A or 136of the Customs Act. 1962. 4.1.1. The decision for launching prosecution should be taken in cases which fu .....

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ion in baggage/cases under Transfer of Residence Rules, where the CIF value of the goods involved is ₹ 20,00,000/- (Rupees twenty lakh) or more, (ii) Outright smuggling of high value goods such as precious metal, restricted items or prohibited items notified under section 11 of the Customs Act, 1962 or goods notified under section 123 of the Customs Act, 1962 or foreign currency where the value of offending goods is ₹ 20,00.000 (Rupees twenty lakh) or more; 4.2.1.2. Appraising Cases/ .....

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he amount of drawback or exemption from duty is ₹ 1,00, 00,000 (Rupees one crore) or more; (iii) In cases related to exportation of trade goods (i.e. appraising cases) involving,- (a) wilful mis-declaration in value/description ; (b) concealment of restricted goods or goods notified under section 11 of the Customs Act, 1962 where FOB value of the offending goods is ₹ 1,00,00,000/- (Rupees one crore) or more. 4.2.2. Exceptions: The above threshold limits would not apply in case of per .....

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d life etc.: The threshold limits mentioned in sub para 4.2.1 would also not apply in cases involving offences relating to items i.e. FICN, arms, ammunitions and explosives, antiques, art treasures, wild life items and endangered species of flora and fauna. In such cases, launching of prosecution should be considered invariably, irrespective of value of offending goods involved. 4.3. In respect of cases involving non-declaration of foreign currency by foreign nationals and NRIs (normally visitin .....

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laim of bonafide and proper acquisition but inadvertent non-declaration, and other attendant factors may be considered immediately and a decision taken whether the case involves criminal intent warranting launching of prosecution or not. Where the prosecution is not considered called for, the case can be adjudicated by the proper officer and suitable order for confiscation/ fine / penalty etc. passed. 4.4. It is mentioned that the quantum of punishment under section 135 of the Customs Act, 1962 .....

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e for section 135 of the Customs Act, 1962 (refer to para 4.2 & 4.3). 4.5. It is clarified that prosecution in respect of narcotic drugs and psychotropic substances may be launched as per the provisions of the NDPS Act, 1985. 4.6. Except in respect of cases covered by sub paras 4.2.1.2 and 4.2.2 above, in all other cases, prosecution may be launched after due sanction by the Commissioner/Principal Commissioner (Pr. Commr.) or Additional Director General (ADGRI)/Principal Additional Director .....

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1962:- 5.1. Prosecutions should not be launched as a matter of routine and/or in cases of technical nature, where the additional claim for duty is based solely on a difference of interpretation of the law. Before launching any prosecution, it is essential that the department should have sufficient evidence to prove that the person, individual or company, against whom prosecution is being considered, had guilty knowledge of the offence or had fraudulent intention of committing the offence, or in .....

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ADGRI / Pr. ADGRI should go through the relevant case file thoroughly and ascertain for themselves that the definite involvement of different partners/directors/executives/officials, against whom reasonable evidence about their involvement in the offence exists and should be proceeded against, while launching the prosecution. 6. Stage for launching of prosecution: Normally, prosecution may be launched immediately on completion of adjudication proceedings. However, prosecution in respect of case .....

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gation (for commercial fraud cases as well as outright smuggling cases) or in the case of a habitual offender. (b) In case where arrest has not been made but it relates to outright smuggling of high value goods such as precious metal, restricted items or prohibited items notified under section 11 or goods notified under section 123 of the Customs Act, 1962 or foreign currency where the value of goods is ₹ 20,00,000 (Rupees twenty lakh) or more. 6.2. In a recent judgement passed by Hon' .....

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dings is not binding on the proceeding for criminal prosecution. In view of aforesaid observations of Hon'ble Supreme Court, it is reiterated that if the party deliberately delays completion of adjudication proceedings, prosecution may be launched even during the pendency of the adjudication proceedings, where offence is grave and qualitative evidences are available. 6.3. Prosecution need not be kept in abeyance on the ground that the party has gone in appeal/revision. However, in order to e .....

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tain copies of adjudication orders of missing serial numbers from the adjudication section every month. 7. Procedure for launching prosecution: 7.1. In all such cases, where prior approval of Chief Commissioner/Principal CC or DGRI/Pr. DGRI is necessary for launching prosecution, an investigation report for the purpose of launching prosecution (as per Annexure- I), should be carefully prepared and signed by the Assistant Commissioner / Assistant Director concerned. The investigation report, afte .....

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Commissioner/Principal CC or DGRI / Pr. DGRI is not required, the decision about launching of prosecution or otherwise should be taken by the Commissioner/ Pr. Commr. or ADGRI/Pr. ADGRI after careful application of mind and analysis of evidence brought on record. This should be completed within a month of adjudication of the case (unless it is decided to go for prosecution even prior to adjudication in certain category of cases mentioned at para 6 above). 7.3. Prosecution should not be filed mer .....

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eponderance of probability. Therefore, even cases where demand is confirmed in adjudication proceedings evidence collected should be weighed so as to likely meet the test of being reasonable doubt for recommending & sanctioning prosecution. Decision should be taken on case- to- case basis considering various factors, such as, gravity of offence, quantum of duty evaded and the nature as well as quality of evidence collected. 7.4. It is reiterated that in order to avoid delays, Commissioner/Pr .....

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/Commissioner to take a view of prosecution. Where the prosecution is proposed before the adjudication of the case, Commissioner /Pr. Commr. Or ADGRI / Pr. ADGRI shall record the reason for the same and the adjudicating authority shall be informed of the decision so that there is no need for him to examine the case subsequently from the perspective of prosecution. 7.5. It is observed that the delays in the Court proceedings occur due to the non-availability of records required to be produced bef .....

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int has not been filed even after a lapse of three months from the receipt of sanction for prosecution, the reason for delay shall be brought to the notice of Chief Commissioner/Principal CC or DGRI / Pr. DGRI by the Commissioner /Pr. Commr. or ADGRI / Pr. ADGRL as the case may be, who are responsible in the case for ensuring the timely filing of the complaint. 8. Publication of names of persons convicted under Customs Act 1962 Section 135-B of the Customs Act, 1962. grants the power to publish .....

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ecution at monthly intervals and take the corrective action wherever necessary to ensure that the progress of prosecution is satisfactory. 9.2. For monitoring of prosecution cases, a Prosecution Cell should be created in each Commissionerate under the supervision of Additional/Joint Commissioner. In case of Directorate of Revenue Intelligence, an Additional/ Joint Director in headquarter/each zonal unit should supervise the prosecution work relating to headquarters or respective zonal unit, as t .....

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xure-II should be maintained in the Zonal Unit / Hqrs of DRI pertaining to those prosecution cases and similar regular monitoring to be carried out by ADGRI/ Pr. ADGRI concerned. 10. Appeal against Court order in case of inadequate punishment/acquittal: 10.1. Commissioner/Pr. Commr. responsible for the conduct of prosecution or ADGRI / Pr. ADGRI (in respect of cases booked by DGRI), should study the judgement of the Court and, where it is found that the accused person have been let off with ligh .....

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prosecution 11.1. Procedure for withdrawal of sanction order of prosecution In cases where prosecution has been sanctioned but not filed and new facts or evidences have come to the notice of the Commissionerate or the DGRI which warrant review of the sanction for prosecution, it should be immediately brought to the notice of the sanctioning authority. After considering the new facts and evidences the sanctioning authority may recommend withdrawal of sanction order to the next higher authority. .....

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f these instructions and necessary action taken to either file complaint expeditiously or to propose withdrawal of sanction. 11.2. Prosecution for withdrawal of Complaint already filed for prosecution 11.2.1. In cases where the complaint has already been filed in the court, it will be up to the court to decide whether or not to pursue prosecution in terms of section 257 and 321 of Cr. P.C, 1973. If the order for withdrawal has been given by a court, the prosecution can be withdrawn by the Assist .....

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not on merit, prosecution may continue, and (b) in case of exoneration, however. on merit where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of circumstances cannot be allowed to continue, underlying principle being the higher standard of proof in criminal cases. 11.2.3. In respect of cases covered under clause (b) above, the Chief Commissioner/Principal CC or DGRI/ Pr. DGRI would ensure moving an application through Public Pros .....

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015-Cus. dated 30.12.2005. 13. Prosecution Register and dissemination of information 13.1. A Prosecution Register in the form as Annexed to this circular should be maintained in the prosecution cell of the Commissionerate headquarters/Custom House/DRI formations. Wherever the prosecution is compounded under section 137 of CA'62 by the Chief Commissioner, suitable endorsement may be kept in the prosecution register. 13.2. It may be mentioned that offences under section 132 and 135 of the Cust .....

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o the Directorate of Enforcement for taking action under PMLA, suitable remarks should be made in the prosecution register. In case, the prosecution under PMLA is separately proposed to be launched by the Directorate of Enforcement, and intimation is received to that effect in the prosecution unit of the Commissionerate/ DRI, suitable entry should be kept in the register for appropriate liaison with the Directorate of Enforcement and further action as per the direction of Special Court. 13.3. Fu .....

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cord and monitoring. Similar record may be kept in respect of appeal against court order and / or withdrawal of prosecution as detailed in para 10 to 12 above. 13.4. The field formations should upload/update the information regarding prosecution initiated in the Management Information System (MIS) under prescribed Proforma. 14. Inspection of prosecution work: Director General (Inspection) and Chief Commissioners/Principal CCs, while carrying out inspection of the Commissionerates/Custom Houses, .....

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ution sanctioning authority in light of the provisions of this circular. 16. Where a case is considered suitable for launching prosecution and where adequate evidence is forthcoming, securing conviction largely depends on the quality of investigation. It is, therefore, necessary for senior officers to take personal interest in investigations of important cases of smuggling/duty evasion and also in respect of cases having money laundering angle and to provide guidance and support to the investiga .....

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cers for such courses. 18. The field formations are hereby directed to circulate these guidelines to all the formations under their charge. Difficulties, if any, in implementation of the aforesaid guidelines may be brought to the notice of the Board. 19. Please acknowledge receipt of this circular. Encl: As above Yours faithfully, (A.C. MALLICK) Under Secretary to the Govt. of India ANNEXURE I INVESTIGATION REPORT FOR THE PURPOSE OF LAUNCHING PROSECUTION AGAINST- COMMISSIONERATE-/Divisions 1. Na .....

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evidence) (i) Action ordered against the accused in adjudication proceedings 7. Brief note as to why prosecution is recommended Place: Date: (Deputy/Assistant Commissioner) Or (Deputy/Assistant Director) 8. I have carefully examined the investigation report and find it in order for filing criminal complaint under section (s) (-) of Customs Act, 1962. Commissioner/ Pr. Commr. Or ADGRI/ Pr. ADGRI ANNEXURE-I (contd.) NOTE (A) The proposal should be made in the above form in conformity with the guid .....

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