TMI Blog2008 (5) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... y Ship to Madras Port in July, 1994. His son Yogesh Balakrishnan presented certain documents for getting clearance of the said car from the Customs Department. One such document was a letter dated 8.9.1994 authored by the appellant herein Shri M. Natarajan who is the publisher of a magazine called "Tamilarasi" which publication had commenced in the year 1992. He is also the author of bi-monthly magazine "Pudiya Paarvai" which surfaced in the year 1993. One Baskaran was said to be assisting the appellant being the incharge of these publications. The said letter dated 8.9.1994 which was used by accused Yogesh Balkrishnan was authored by the appellant and addressed to the Manager, Indian Bank, Abiramapuram, Madras on behalf of Tamilarasi publication to the following effect: "We invite reference to the various remittances made by our purchase creditors on 22.6.94 into our account, and would like to inform you that a sum of Rs.12 lacs remitted relates to the remittances made by our Foreign buyers of our weekly and fortnightly magazines. Kindly issue a Foreign Inward certificate for this sum of Rs.12 lacs." On the basis of this letter the Foreign Inward Certificate, as sought for by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e current account of M/s.Tamilarasi Publication, the third accused was a private individual, the fourth accused was also a private individual and the fifth accused was the Branch Manager, Indian Bank, Abiramipuram Branch, Chennai and Smt.R. Bhavanai, Approver was working as the Assistant Manager, Indian Bank, Abiramipuram, Chennai in the year 1994. In the charge-sheet it was stated that the accused had conspired to cheat the Government of India and to commit act of criminal misconduct and in furtherance of the conspiracy, the appellant and the second accused fabricated documents for the purpose of clearing the imported Lexus Car which was imported by the third and fourth accused in order to take advantage of the provisions of Transfer of Residence and pay less customs duty, though they fully knew that the car was manufactured in the year 1994 which was mis-declared to be manufactured in the year 1993 and in pursuance of the said conspiracy, the fifth accused misued and abused her official position as the Branch Manager of the Indian Bank, issued the Foreign Inward Remittance Certificate to the effect that the Lexus Car which was imported would be released by the Customs Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces. While the appellant herein and second accused Shri Balakrishnan very well knew that the Current Account bearing No.872 at Indian Bank, Abiramipuram, Chennai did not receive any foreign inward remittance, got a false certificate issued by Smt.Sujarita Sudararajan, the fifth accused, Branch Manager of the bank on the basis of a false letter presented by the first accused and on the basis of that the Branch Manager had issued foreign inward remittance certificate dated 8.9.1994 to the effect that the Lexus Car can be cleared from the Customs. She had also directed her Assistant Manager Smt.Bhavani to modify the certificate and issue the same to Shri M. Natarajan, appellant and Shri Bhaskaran, second accused. Thus the certificate was used by the four accused persons (A1 to A4) for the purposes of clearing the imported car, knowing fully well that the Current Account No.872 did not receive any foreign exchange remittance. 7. The charge-sheet, therefore, went to show that the acts of accused Nos.1 to 5 constituted offences punishable under Section 120B IPC read with Sections 420, 467, 471 IPC and Section 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmunity in respect of the transaction which includes the prosecution from all or any of the offences. It was pointed out that third accused in pursuance of Rule 3(1)(b) of the Rules had filed a declaration in Form 1-B under Section 88 of the Finance Act and the Customs Department had issued a certificate of intimation under Section 90(1) of the Finance Act and determined the tax under Section 88(f) of the Act as being Rs.2,84,325/- which was remitted by the third accused on 18.3.1999. This final settlement was arrived at between the parties as against the original claim arrears of tax of Rs.5,68,649/-. In short, the appellant prayed that in respect of the transaction in question no prosecution could have been launched against the third accused or for that matter any other accused. For this the appellant relied on the reported decisions of this Court in Central Bureau of Investigation, SPE, SIU (X), New Delhi v. Duncans Agro Industries Ltd., Calcutta [(1996) 5 SCC 591] and Sushila Rani (Smt.) v. Commissioner of Income Tax Anr. [(2002) 2 SCC 697] and Hira Lal Hari Lal Bhagwati v. CBI, New Delhi [(2003) 5 SCC 257]. 10. As against this, it was argued before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our opinion, the learned Judge was right in examining the KVSS 1998 to decide whether it provided complete immunity from the prosecution since that was the mainstay of appellants attack against the prosecution. 12. The learned Judge then undertook the detailed examination of the KVSS 1998 as also the case law and came to the conclusion that the acts complained of against the appellant were outside the declaration statement under Section 88 made by third accused. The acts complained of in the charge sheet did not have any connection with the declaration of statement (by accused no. 3) and the letter dated 8.9.1994 which was the basis for issuance of Foreign Inward Remittance certificate amounted to misrepresentation and false representation and it had no connection with the scheme whatsoever and as such the learned Judge came to dismiss the Revision Petition as well as Criminal O.P. under Section 482 Cr.P.C. 13. It is on this background that we have to proceed to decide the present appeals. 14. Shri K. Subramaniam, Senior Advocate, appearing on behalf of the appellant very heavily relied on the decision in Hiralal's case (supra). He pointed out t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be delivered. He then points out that the act complained of against the appellant is an independent offence inasmuch as he had made a false representation to the bank, knowing it to be false. He had known that there were no foreign remittances in Account No.872 of M/s. Tamilarasi and that his request for issuance of certificate to that effect was totally unfounded. On the basis of this letter, a certificate which was essentially false came to be issued by the Branch Manager and, therefore, this act is independent offence, though ultimately the said certificate had been used by the third accused for getting the clearance of the car. Our attention was invited to the provisions suggesting that under the scheme the remittance is either to be made in foreign currency or atleast on the basis of the remittance by an NRI credited in the account held in the Indian Bank. He further points out that the provisions of Sections 90, 91, 95 and more particularly Section 91 were clear and couched in the language which admitted of no doubts. Relying heavily on the language of Section 91, the learned ASG suggests that this immunity has to be restricted to the offence under the Act and it could not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er provision of any law. Section 88 then provides the modality for settlement of such tax. There is no dispute that in the present case, it was the third accused and not the appellant who actually gave a declaration statement under section 88, in respect of the tax liability which was attracted on account of the import of the car. There is also no dispute that on the basis of this declaration under Section 88, the authorities went on to decide the liability on the part of third accused and ultimately, the tax liability was satisfied and the car was allowed to be imported. Section 90 provides for the time and manner of payment of tax arrear which have been settled on the basis of the declaration under Section 88. Indisputably, a certificate in the prescribed form was granted in favour of the third accused in which particulars of the tax arrear and the sum payable after such determination was mentioned being a full and final settlement of the tax arrears. Section 91 is the real crux of the matter. It provides immunity from prosecution and imposition of penalty in certain cases: "91. Immunity from prosecution and imposition of penalty in certain cases- The designated authority shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption certificate was issued in the name of the GCRI and not in the name of GCS and, therefore, GCS was not entitled to the exemption and was, therefore, liable to pay customs duty. The GCS was held liable to pay the customs duty, thus, denying the concessional duty benefit demanded from it under Section 28 of the Customs Act, 1962 read with the proviso to the said Section. Against the order imposing the duty by the Collector of Customs, the appeals were filed before Customs, Excise and God (Control) Appellate Tribunal, West Regional Branch, Bombay which confirmed the findings of the Collector of Customs. Against that, the GCS filed an appeal before this Court and while the matter was pending before this Court, the Government of India launched a Kar Vivad Samadhan Scheme, 1998, and in accordance thereof, the GCS had agreed to deposit a stipulated amount of over Rs.98 lakhs and also withdrew the civil appeal pending before this Court. On 19.7.1999, a certificate for full and final settlement of the tax arrears was issued to the GCS. The said certificate provided the final settlement of tax arrears and also granted the immunity to the GCS from any proceedings for prosecution for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r stated and no matter covered could be reopened in any other proceeding under any law for the time being in force. It is probably on the basis of observations in paragraph 6 of Sushila Rani's case, that the learned Judge made the observation in paragraph 27 which we have already quoted in para 13 of this judgment. We may at this stage itself point out that the observations in paragraphs 6 and 8 in Sushila Rani's case seem to have been made only in the pursuance of tax laws. The question of prosecution under some other offences (not under the Indirect Tax Act or the Direct Tax Act) was not there. 20. A reference must be made, at this stage, to the judgment of this Court reported in Alpesh Navinchandra's case (cited supra) which was again decided by the Division Bench consisting of Hon'ble Lakshman and Kabir, JJ., the judgment was, however, authored by Hon'ble Lakshmanan, J. This was the case of immunity granted under Sections 127H of the Customs Act, 1962, however, the appellant and his brother were preventively detained under COFEPOSA. The detention was challenged on the ground that once the immunity under Section 127H of the Customs Act was granted in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of both the detenus in order to prevent them from prejudicial activities in future. Accordingly, the impugned order is justifiable in the eye of the law and the present writ petition deserves to be dismissed." In our opinion, the rigour of the observations made in paragraph 27 in Hiralal's case is removed by the observations made in paragraphs 46 and 47 in Alpesh Navinchandra Shah's case. It was contended that the legislature had created a Settlement Commission for generating revenue and had also made provisions for release of the goods on payment of duty and had also made provisions for granting immunity from prosecution under the Customs Act, 1962 under the Penal Code and also under the other Central law and, therefore, it was clear that the intention of the legislature was more on revenue aspect rather than prosecution and punishment aspect or in continuing with multiple litigations. And, therefore, it would be unjust, unfair and unreasonable if a person is made to suffer preventive detention mainly after his application for settlement is allowed to e proceeded with, and after realization of the customs duties not only the goods are ordered to be released but on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e private respondent had applied for import of cotton fabrics for a certain quantity of "cotton men's ensemble" under "the Duty Exemption Entitlement Certificate Scheme". That application was recommended and the Company was allowed to import cotton fabrics of a particular description. On allegations in regard to the grant of the license, an FIR came to be lodged on 2.3.1995 for commission of offences under Sections 120-B, 420 and 471 IPC as also Section 13 (2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 and Section 136 of the Customs Act, 1962. The Company and its Directors had given a declaration on 31.12.1998. However, the charge sheet against them and the four public servants was filed on 12.4.1999, originally against the 7 accused persons, 3 out of whom were the private parties, namely, the Company and its 2 Directors. The High Court quashed the criminal proceedings against the private parties as also the Government servants. Challenging this quashing, the CBI came before this Court. It was urged before this court that: (i) the High Court had erred in holding that though the private parties have become entitled to immunity from prosecution, the official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case and more particularly to the observations made in paragraphs 18 and 27, which we have already quoted above. The learned Judges then proceeded to hold that Hiralal's case was distinguished in Sashi Balasubramanian's case (cited supra) and held that the transfer of application of Salex Tax Act would not be covered by the immunity under KVSS, 1998. This Court in paragraph 33 observed as under: "33.....an immunity is granted only in respect of offences purported to have been committed under direct tax enactment or indirect tax enactment, but by no stretch of imagination, the same would be granted in respect of offences under the Prevention of Corruption Act. A person may commit several offences under different Acts; immunity granted in relation to one Act would not mean that immunity granted would automatically extend to others. By way of example, we may notice that a person may be prosecuted for commission of an offence in relation to property under the Penal Code as also under another Act, say for example, the Prevention of Corruption Act. Whereas charges under the Prevention of Corruption Act may fail, no sanction having been accorded therefore, the charges under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Legislation...................." Once this Court had noticed the observations made in Hiralal's case and hen narrowed the width of the observations expressed in paragraph 27 hereof, we must proceed in terms of the subsequent judgment where the arlier judgment was taken note of. 27. By way of almost a desperate effort Shri K. Subramaniam, learned Senior Advocate then urged that the only offence which could have been alleged against any of the accused was under Section 132 of the Customs Act, 1962, i.e., of making a false declaration. The argument was that since the offence complained of related to the false declaration and false documents, the appellant could be prosecuted only under Section 132 of the Customs Act and not under the offences covered under the Indian Penal Code. Section 132 of the Customs Act is as under: "132. False declaration, false documents, etc. - Whoever makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document in the transaction of any business relating to the customs knowing or having reason to believe that such declaration, statement or document is false in any material particular, shall be punishable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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