TMI Blog2017 (9) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... duce documents - The nature of details sought for under the summons of Section 108 of the Customs Act issued by the Investigating Officer is on the basis of investigation carried thus far. The investigation, which is under the domain of the Investigating Officer, he was perfectly justified in calling upon the details - interpretation now given to word “fully cooperate with the investigation” stands expanded to the extent that it means to see that the petitioner to fully cooperate and such cooperation must be voluntary cooperation, thereby leaving it upon the petitioner, who is facing investigation, to decide on his own where he desires to volunteer and where he does not. Such proposition cannot be accepted in the field of investigation - The petitioner has therefore not fully cooperated with the investigation as per the conditions of bail order. Whether in the facts of the case, the petitioner, who is arrested under Section 104 of the Customs Act can be considered as an accused to bring him under the protection of Article 20(3)? - Held that: - this Court is of the view that in the facts of the present case, where petitioner is yet to attend the status of an accused arrested for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge, City Sessions Court No.22, Ahmedabad in Criminal Misc.Application No.623 of 2016. 2.1 Special Criminal Application No.4824 of 2017 is filed by a private individual (hereinafter to be referred as the petitioner ), who was enlarged on regular bail by order dated 19.02.2016 in Criminal Misc.Application No.623 of 2016. The petitioner was enlarged on regular bail in connection with the proceedings initiated against the petitioner by DRI authorities. Criminal Misc.Application No.21674 of 2017 is filed by the DRI, Zonal Unit of the Government of India (hereinafter to be referred as the Department ) seeking cancellation of bail granted to the petitioner under the aforementioned order. 2.2 Therefore, essentially, both these petitions are directed against the very same order granting bail and thereafter, respective applications filed by the petitioner as well as the Department, which came to be rejected by the Sessions Court. 2.3 In view of the aforesaid facts, both these matters are taken up for joint hearing with the consent of the learned Advocates for the parties. 3. The facts in brief are that the Department, in connection with offence punishable under Section 135 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority and the Bank, no logical explanations were offered. Despite the objection on the ground that that the investigation is at a crucial stage and that presence of the petitioner would be required continuously as the offence involves complex business transactions at international level involving petitioner owned companies located in Taiwan and Hong Kong, special knowledge of which is only with the petitioner, the Sessions Court granted regular bail by directing furnishing of guarantee of ₹ 4.5 crores to the Customs Department and the condition that the petitioner shall not leave territory of Gujarat State till completion of investigation, deposit passport, cooperate fully with the IO and not leave the territory of India without prior permission of the Sessions Court, even after completion of investigation and marking presence on any day of 1st week of each English calender month for a period of 1 year. The Department has sought for cancellation of bail on the ground that the petitioner had committed breach of condition No.11 by not marking presence in the 1st week of August. He has committed breach of condition No.4 and has not fully cooperated with the Investigating Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of value in the documents which were fabricated by the petitioner from AFCO Asia Ltd. in the name of M/s.High Tech Garments Pvt. Ltd., Surat, M/s.High Tech Fablon Pvt. Ltd., Surat, M/s.High Tech Filatex Pvt. Ltd., Surat and M/s.High Tech Texolene Pvt. Ltd., Surat, etc. 4.3 Learned ASG for the Department took this Court through the papers of investigation to submit that the Department is having sufficient documents to establish that AFCO Asia Ltd. is a company with 100% shareholding of the petitioner and his wife. He also drew attention to the statements of the petitioner recorded at various stages of investigation to demonstrate that the petitioner was deliberately and willfully giving misleading statements to throw the investigation off the track. The Department also had on record various documents in the form of invoices, insurance certificates, parallel set of invoices presented before the Customs authorities and the Bank authorities and when the Department wanted to comprehend the documents and the import taken place, at that stage, the petitioner has denied to supply the documents or cooperate with the investigation. 4.4 Learned ASG for the Department has relied upon j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details called for under the summons from the company by issuing summons to the respective persons of that company, viz. AFCO Asis Ltd., which is a separate entity. It is submitted that by calling upon the details of AFCO Asia Ltd., the Investigator merely wants to harass the petitioner by calling for irrelevant documents. 5.1 It is submitted that the Investigator is bound to restrict his investigation only to the transactions which are forming part of investigation. The companies of the petitioner which are situated in Taiwan, are having worldwide business and transaction of the companies having worldwide business will be of no consequence for the transactions which are under scrutiny. It is submitted that the transaction under investigation has nothing to do with AFCO Asia Ltd., details of which are sought under summons. 5.2 It is submitted that considering the fact that the petitioner was arrested by issuing of arrest memo, the grounds of arrest were also provided to the petitioner, the petitioner was produced before the Court of Magistrate following Section 167 of the Criminal Procedure Code and the petitioner was enlarged on regular bail by invoking Section 439 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information of diversion of goods, authentication of documents, maintaining surveillance over suspected goods, persons or amounts of transaction, etc. This does not include any information regarding under-valuation or over-valuation of goods. 5.7 Learned Advocate for the petitioner relied upon judgment of the Madras High Court in case of A.T.Maideen Vs. The Senior Intelligent Officer, Directorate of Revenue Intelligence, Delhi Zonal Unit, New Delhi , reported in MANUPATRA/TN/0561/2012 , to contend that the Department can issue summons upon the petitioner under Section 108 of the Customs Act and to conduct an inquiry, however, without infringement of Article 20(3) of the Constitution of India. Learned Advocate for the petitioner also relied upon judgment of the Allahabad High Court in case of Hindustan Safety Glass Works Ltd. Vs. Assistant Collector, Central , reported in 1985 (21) ELT, 38 All . Learned Advocate for the petitioner next relied upon judgment of the Bombay High Court in case of Grant Investrade Ltd. Anr. Vs. Union of India Ors ., reported in 2016(9) Tax Management India, 1089 , to contend that it is only on investigation being concluded and appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned advocate for the opponent accused that the Court has not imposed any condition on the accused that he shall produce the documents. Looking to the record, the applicant itself has stated in affidavit that the opponent accused was under the fear that if such details are produced by him, then, certain other cases of evasion of duty or havala transactions or black transactions may be initiated against him and his Taiwan based company. Hence, it is clear that the documents which are sought for by the investigating agency, may be going against the accused. 8.1 The aforesaid finding, in the opinion of this Court is perversity. The nature of details sought for under the summons of Section 108 of the Customs Act issued by the Investigating Officer is on the basis of investigation carried thus far. The investigation, which is under the domain of the Investigating Officer, he was perfectly justified in calling upon the details. As against this, the reply given to the summons is required to be reproduced hereunder:- [ 1] There is no import of Nylon Mono Filament Yarn from AFCO Asia Ltd. [ 2] Copies of the bank statement if AFCI Asia Ltd (Company incorporated outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in evidence against him, lie was a person accused of an offence. Under Section 171A of the Sea Customs Act, a Customs Officer has power in an enquiry in connection with the smuggling of goods to summon any person whose attendance he considers necessary, to give evidence or to produce a document or any other thing, and by Clause (3) the person so summoned is bound to state the truth upon any subject respecting which he is examined or makes statements and to produce such documents and other things as may be required. The expression any person includes a person who is suspected or believed to be concerned in the smuggling of goods. But a person arrested by a Customs Officer because he is found in possession of smuggled goods or on suspicion that he is concerned in smuggling is not when called upon by the Customs Officer to make a statement or to produce a document or thing, a person accused of an offence within the meaning of Article 20(3) of the Constitution. The steps taken by the Customs Officer are for the purpose of holding an inquiry under the Sea Customs Act and for adjudging confiscation of goods dutiable or prohibited and imposing penalties. The Customs Officer does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an offence before a Magistrate competent to try or send to another Magistrate for trial the offence; where a Customs Officer arrests a person and informs that person of the grounds of his arrest (which he is bound to do under Article 22(i) of the Constitution) for the purposes of holding an enquiry into the infringement of the provisions of the Sea Customs Act which he has reason to believe has taken place, there is no formal accusation of an offence. In the case of an offence by infringement of the Sea Customs Act and punishable at the trial before a Magistrate there is an accusation when a complaint is lodged by an officer competent in that behalf before the Magistrate. 10. In case of Veera Ibrahim Vs. The State of Maharashtra , reported in (1976) 2 SCC, 302 , phrase accused of an offence with reference to Section 108 of the Customs Act was interpreted and it is held as under:- 6. From an analysis of this clause, it is apparent that in order to claim the benefit of the guarantee against testimonial compulsion embodied in this clause, it must be shown, firstly, that the person who made the statement was accused of any offence secondly, that he mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Officer, in an inquiry in connection with the smuggling of goods, to summon any person whose attendance he considers necessary to give evidence or to produce a particular document, the Supreme Court observed thus: The expression any person includes a person who is suspected or believed to be concerned in the smuggling of goods. But a person arrested by a Customs Officer because he is found in possession of smuggled goods or on suspicion that he is concerned in smuggling is not when called upon by the Customs Officer to make a statement or to produce a document or thing, a person accused of an offence within the meaning of Article 20(3) of the Constitution. The steps taken by the Customs Officer are for the purpose of holding an enquiry under the Sea Customs Act and for adjudging confiscation of goods dutiable or prohibited and imposing penalties. The Customs Officer does not at that stage accuse the person suspected or infringing the provisions of the Sea Customs Act with the commission of any office. His primary duty is to prevent smuggling and to recover duties of customs when collecting evidence in respect of smuggling against a person suspected of infringing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing principles emerge:- i. The main purpose of the provisions of Sections 9, 13, 18 and 19 of the Central Excise Act is to levy and collect excise duties and Central Excise Officers have been appointed thereunder for this main purpose. In order that they may carry out their duties in this behalf, powers have been conferred on them to see that duty is not evaded and persons guilty of evasion of duty are brought to book. ii.Mere conferment of powers of investigation into criminal offences under Section 9 of the Act does not make the Central Excise Officer a police officer. iii. A Customs Officer is not a member of the police force. He is not entrusted with the duty of maintaining law and order. He is entrusted with powers that specifically relate to the collection of customs duty and prevention of smuggling. The power to arrest, the power to detain, the power to search or obtain a search warrant and the power to collect evidence are vested in the Customs Officer for enforcing compliance of the provisions of the Sea Customs Act. The Customs Officer does not exercise, when enquiring into a suspected infringement of the Sea Customs Act, powers of investigation which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act being charged before a Magistrate. Ordinarily, after adjudging penalty and confiscation of goods or without doing so, if the Customs Officer forms an opinion that the offender should be prosecuted, he may prefer a complaint in the manner provided under Section 137 with the sanction of the Collector of Customs and until a complaint is so filed, the person against whom an inquiry is commenced under the Customs Act does not stand in the character of a person accused of an offence under Section 135. vii. The Customs Officer is a revenue officer primarily concerned with the detection of smuggling and enforcement and levy of proper duties and prevention of entry into India of dutiable goods without payment of duty and of goods of which the entry is prohibited. viii.A person arrested under Section 104 (1) of the Customs Act would fall within the ambit of the expression suspected of the commission of any non- bailable offence. A person arrested by a Customs Officer under Section 104 would be a person suspected of the commission of such an offence inasmuch as the arrest itself is made when the officer of customs has reason to believe that such person has been guilty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the purpose of detecting the commission of an offence under the Act. The powers of arrest have in fact been vested in the Central Excise Officers only for the purposes of carrying out the purposes of the Act and not for the purpose of prosecuting any accused person of an offence under the Act as that is the duty of the police officer and not the Central Excise Officer. 29. Section 18 of the Act interalia provides that all arrests made under the Act shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898 relating to arrests made under the Code. Section 13 confers a substantive power of arrest on a Central Excise Officer akin to the power conferred on the police under section 41 and 42 of the Code, on a private person under section 43 and on a Magistrate under section 44 of the Code. Whereas in view of the provisions of section 18 of the Act, the procedure for making such arrest is governed by the provisions of the Code viz. the manner of making arrest is provided under section 46 of the Code; the manner for searching of the place entered by the person sought to be arrested is provided under section 47 of the Code; pursuit of offende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protect the petitioner from operation of Section 108 of the Customs Act. 17. The power of a Customs Officer to carry out investigation in Chapter 13 of the Customs Act, both Sections 104 and 108 fall in Chapter 13 when person under investigation joins the investigation with the aid of the powers in Chapter 13. Hence, when the petitioner was imposed with a condition to cooperate fully, he would be subjected to investigation under the provisions under Chapter 13 including Section 108. Therefore, when the Department was within its power to investigate, issued summons under Section 108 and it was obligatory upon the petitioner to cooperate. Non-cooperation on the grounds mentioned amounts to breach of conditions of bail. 18. For the foregoing reasons, Criminal Misc.Application No.21674 of 2017 is allowed. The order dated 10.03.2017 passed by Additional Sessions Judge, City Sessions Court No.15, Ahmedabad in Criminal Misc.Application No.3525 of 2016 is quashed. The case is relegated back to the Additional Sessions Judge, City Sessions Court No.15, Ahmedabad for fresh consideration of the application filed by the Department. However, considering the fact that the petitioner is on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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