TMI Blog2008 (1) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Airways' flight from London and walked through Green Channel, was intercepted by DRI Officers at the exit gate of the arrival hall of IGI Airport on 11.8.04. On personal search, two sets of diamond earrings were recovered from his coat pocket along with US$1900. Further, an invoice dated 10.8.04 evidencing sale of such earrings to respondent No.1-Anil Chanana along with VAT Declaration Form filed by Anil bearing stamp of Customs Authority, London, was also recovered. Further, the search of his baggage resulted in recovery of two empty plastic jewellery boxes kept inside two cardboard boxes (containers). The value of two pair of diamond earrings mentioned in invoice dated 10.8.04 was of #1,40,847.41 equivalent to Rs.1,16,90,300. On 12.8.04 Anil's statement was recorded under Section 108 of the Customs Act, 1962 in which he stated that the said earrings were gifted to him by his friend in London. The name of his friend was Bhupendra Kansagara whom he had met for the first time three years earlier; that, he got VAT Declaration Form from British Customs so that he could get refund of VAT; that, on arrival he did not declare the value of dutiable goods in the Customs Declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 4(2) whereas on 21.2.06 the Customs Commissioner (Ing.) also Reporting Authority submitted its report under the said Rule. Vide DRI report, it was pointed out to the Compounding Authority that the invoice was in the name of Anil and not of Kansagara; that refund was to be claimed by Anil and not by Kansagara; that the earrings were recovered after Anil's interception and subsequent search and, therefore, Anil's claim of voluntarily inviting the Customs' Officers was denied. Similarly, the fact that Anil was carrying two pairs of diamond earrings on his person; that there were empty boxes in his baggage also clearly established his intent to smuggle the diamond earrings into India. 8. By impugned order dated 25.5.06 the Compounding Authority, however, compounded the offences punishable under Section 132 and 135(1)(a) and imposed the fine of Rs.15 lakhs. The Compounding Authority in its final order found that the offence for which compounding has been applied was a substantive offence as defined in the guidelines enumerated in Circular dated 30.12.05 issued by the Central Government; that the case was eligible for being compounded; that it was the first offence a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompounding amount as may be specified by rules." "Customs (Compounding of Offences) Rules, 2005 Rule 3. Form and manner of application. (1) An applicant may, either before or after institution of prosecution, make an application under sub-section (3) of section 137 in the form appended [See: Customs series Form No.124 in Part 5] to these rules, to the compounding authority for compounding of the offence. Explanation .- Where an offence has been committed at more than one place falling under the jurisdiction of more than one compounding authority, then the Chief Commissioner of Customs having jurisdiction over such place where the value of goods seized, or the amount of duty evaded or attempted to be evaded or amount of export incentives wrongly claimed or attempted to be claimed wrongly is more than others shall be the competent authority. Rule 6. Power of Compounding authority to grant immunity from prosecution. - The compounding authority, if he is satisfied that any person who has made the application for compounding of offence under these rules has co-operated in the proceedings before him and has made full and true disclosure of facts relating to the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of Offences". In the case of disclosure in judicial review proceedings, Courts are not concerned with factual findings, however, in cases 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 earlier when statements are recorded under Section 108 of the 1962 Act and the averments made in the Application for Compounding of Offences. In compounding cases, we have Merit Review vis-a-vis Judicial Review. In the present case, Anil has stated in his Application under Section 137(3) that he had no intent to smuggle as he had entered into Green Channel through oversight whereas earlier in his first bail Application Anil has stated that he was forcibly taken by DRI Officers to walk through Green Channel. The basic rule of "disclosure", underlying Section 137(3), is that if there are demonstrable contradictions or inconsistencies or incompleteness in the case of the applicant then application for compounding cannot be entertained. Applications for compoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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