TMI Blog2018 (6) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... in the grounds of detention. The non-considering of vital facts which have a bearing on whether the Detenue should continue to be detained would vitiate the entire detention order. There is merit in the contention that the sponsoring authority erred in not referring to the various circulars issued by the Commissionerate which demonstrates how the verification of the genuineness of the scripts was to be done. Without the participation of various customs officers, it would have not been possible to hack the system and tamper with the details concerning the scripts/licenses. There being a two-layer verification process by means of a secret password allotted to the Superintendent, it would have been impossible for an individual to tamper with or hack into the system. The exact manner of tampering with the system has not been explained. Since no past antecedents of the Detenue have been pointed in the grounds of detention, there was no material to support the conclusion that the Detenue possesses the propensity or potentiality to indulge in smuggling activities in the future. The detention order is held to be bad in law and is hereby quashed - petition allowed. - W.P. (CRL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for endorsement of no alter . The scripts are entered into the electronic system of the Customs Department only after the Superintendent In-Charge enters the authorization code which is verified by an officer of the rank of Deputy Commissioner/Joint Commissioner of Customs. Thereafter, the scripts can only be entered after verification by two passwords which are changed once in a fortnight by the Superintendent. A new Superintendent who takes over gets a new password which is issued to him. Instructions have been issued by the Directorate of Systems, Customs and Central Excise Department in this regard on 5th August, 2001. 5. For clearing of shipments and use of scripts for payment of duty, a separate portal is used by the traders and vendors. It is explained in the petition that the above portal cannot be accessed by outsiders, including the license holders themselves. Any use of the scripts for payment of import duty is verified by at least by five officers of the Department including three IRS rank officers and an Inspector and a Superintendent at five different stages. In the second stage of verification, the scrip is forwarded to the Customs Cell for physical verificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act, on 15th September 2015, Mr Chadha disclosed that his firm had nine G-Card Holders of whom five, viz., the Detenue, Mr Man Mohan, Mr Roop Tanwar, Mr Vikas Kohli and Mr R.K. Tiwari used to come for clearance at the ICD Tughlakabad, New Delhi. Specific to imports of paper consignment, Mr Chadha stated that the clearances were being done by the Detenue, Mr Man Mohan and Mr Roop Tanwar. The Petitioner states that the Detenue had gone to his home town to attend the funeral of his mother, who had expired in January, 2016. On returning to Delhi in mid February, he was shocked to find his residence and office premises locked. Paper seals were affixed stating that the keys of the locks were with the customs officials, SIIB Branch, ICD Tughlakabad, New Delhi. Criminal complaint by the Department 12. Shortly prior to this, on 23rd December 2015, a criminal complaint was filed by the Customs Department against the Detenue under Sections 172, 174 and 175 of the Indian Penal Code ( IPC ). Although the Detenue was not aware of the above development at that stage, he came to know of it subsequently. The orders passed by the Additional Chief Metropolitan Magistrate-02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications 17. By an order dated 12th December, 2017, the learned ACMM rejected the application for bail of the Detenue on the ground that alleged evasion of duty was about ₹ 100 crores; that the investigation was at its initial stage and the role of other persons was yet to be worked out. 18. On 2nd January 2018, the Detenue filed another bail application before the learned Sessions Judge. By an order dated 4th January, 2018, the learned Sessions Judge granted bail to the Detenue after noting that recoveries had already been made from the Applicant, he had been in custody for 50 days and there was no previous involvement. 19. Immediately on 5th January, 2018, the Petitioner i.e. the wife of the Detenue was informed by the Additional Commissioner of Customs that the Detenue had been detained under Section 3(1) of the COFEPOSA Act and had been kept in Tihar Jail. The Department s SCN 20. Meanwhile, on 20th December 2017, the Directorate of Revenue Intelligence ( DRI ) issued a SCN under Section 28 (4) of the Act to 209 importers and 16 customs brokers including M/s Kirti Cargo which was noticee No.214. According to the SCN, the duty which was debited using forg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Detenue was looking after the entire work related to paper consignments. It was found that the Detenue, a G-Card Holder of the aforesaid CHA firm was also engaged with the sale/purchase of licenses through his company M/s Zealous Overseas Pvt. Ltd. among other firms. According to the Respondents it was revealed that the Detenue had got the license particulars amended fraudulently in the EDI system with the help of Mr Vinod Kumar Pathror, who while posing as an employee of M/s Kirti Cargo used to enter the Export Promotion Measures ( PM ) Branch of the ICD Tughlakabad and may have used the user ID and passwords of the officers who were working in the said Branch to access the EDI System. 25. It is stated that the Detenue was summoned many times between 21st September and 21st October, 2015, but he deliberately avoided participating in the investigation. A copy of the criminal complaint filed under Sections 172, 174 and 175 IPC before the CMM, Patiala House Courts on 23rd December, 2015 against the Detenue has been enclosed with the counter affidavit. It is alleged that the Detenue hacked the system and caused a loss of total custom duty of ₹ 73.35 crores. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Registering a fictitious script / license / authorization which was not issued at all by the DGFT. (c) Re-registering the same license again and again by slightly altering its number and date. 29. It is alleged that imported goods were cleared by misutilization of fraudulently registered licences/scripts and, therefore, such goods were liable to be confiscated under Section 111 (o) of the Act. The act of clearing the goods using such licenses amounted to smuggling within the meaning of Section 2 (39) of the Act. As regards licenses/scripts utilized by the importers of paper and articles, different numbers were given at different times. The DRI was still investigating this aspect. The grounds of detention further stated that the MM had rejected the Detenue s bail application on 12th December, 2017 but there is every possibility of you applying for and being granted bail by the Hon'ble Courts any time now or after completion of 60 days of custody on 15th January, 2018. Once it is done, I am satisfied that you are likely to continue to indulge in smuggling, as explained above which you need to be prevented from. Analysis and reasons 30. The Court finds that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion were made in the year 2012. Since the matter was more than 3 years old and also considering that the allegations of not producing original scripts by the CBs to Customs at the time of clearance of import consignment may not be prime-facie considered such a grave offence, it was concluded that the continuation of suspension was not warranted. The said order of the Commissioner of Customs (General) refers to the statement made by Mr Ramesh Chadha, proprietor of M/s Kirti Cargo where he spoke of utilization of the scripts for payment of customs duty in the Bills of Entry filed on behalf of M/s Shyama Corporation. He stated that the details were provided by Mr Divakar Sharma, his G-Card holder . This aspect of the matter does not find mention in the grounds of detention in case of the Detenue. 33. In view of the above order of the Commissioner of Customs, it becomes clear that it is not a simple case where the Detenue could have just hacked into the EDI System of Customs and tampered with the details the licenses, as is alleged. Unless the officers of the Customs Department were themselves involved, which angle is still under investigation, it is difficult to accept that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, given that the allegations concerning the Detenue are inextricably interwoven with the acts of M/s Kirti Cargo, this was certainly a relevant factor. 37. The second factor that was relevant was the revocation of the suspension of the Customs Broker License of M/s Kirti Cargo which notes that the suspension was on account of the payment of duty by M/s Shyama Corporation through the G-Card holder Mr Diwakar Sharma. Therefore, the concerned G-Card holder in that transaction was not the Detenue. This was also another relevant factor for the Detaining Authority to have considered while passing the detention order against the Detenue. 38. The third factor which weighs with the Court is that the detention order proceeds on the basis that the Detenue has been avoiding the summons issued to him. A reference has already been made to the proceedings before the learned CMM in the complaint CC No.10/2016 filed by the Customs Department against the Detenue under Sections, 172, 174 and 175 IPC. The numerous adjournments granted to the department in the said proceedings belie the case of the department that it was the Detenue who was deliberately avoiding appearance before it. When the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority one way or the other would equally vitiate t the subjective satisfaction and invalidate the detention order. 41. Likewise, in Union of India v. Ranu Bhandari (2008) 17 SCC 348 it was observed that notwithstanding the nature of the allegations made, a Detenue was entitled to the assurance that at the time when the detention order was passed all the materials, both for and against him, had been placed for the consideration of the detaining authority and had been considered by it before the detention order was passed, having particular regard to the orders passed by the Settlement Commission appointed under the provisions of the Customs Act 1962, which absolved the Detenue in that case from criminal prosecution. Departmental Circulars not referred to 42. There is merit in the contention that the sponsoring authority erred in not referring to the various circulars issued by the Commissionerate which demonstrates how the verification of the genuineness of the scripts was to be done. Without the participation of various customs officers, it would have not been possible to hack the system and tamper with the details concerning the scripts/licenses. There being a tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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