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TMI Blog2024 (9) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... ani in person, in pursuance of the permission granted to him by the Committee headed by the Registrar, Judicial (I), who upon interaction with him permitted him to argue the Appeals in person. Though the matter was heard and closed for Judgment on 30/11/2023, it was directed to be listed on 19/04/2024 under the caption "For Direction", as the record pertaining to the Appellant is bulky and assistance was required from Mr. Hirani as well as Mr. Venegavkar, who represented the CBI for its consideration. Thereafter, on updating the record by segregating distinct files, the matter was once again heard, with reference to the distinct original records and then reserved for Judgment. 3. Since the facts resulting into four different Judgments being delivered are in four Special Case Nos.50 of 1990, 51 of 1990, 49 of 1990 and Special Case No.78 of 1989, which are challenged through four different Appeals and since they are over lapping, for the sake of convenience, I shall first refer to the facts in Criminal Appeal No. 466 of 1997, which has raised challenge to the Judgment of the Special Judge in Special Case No.78 of 1989 (RC No.66/1987). The Appeal preferred under Section 374 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antawala & Co. to the A/c Customs (Legal). Bombay where a new file was opened on the subject vide No. COM-4135/87 dt.27.2.87. After hearing the aforesaid petition on 24.3.87 Her Ladyship Justice Mrs. Sujata Manohar of the Bombay High Court was pleased to grant an interim relief in terms of Para-C of the Prayers directing the Custom Department, Bombay to refund the amount claimed by the Petitioner as per particulars given under "Exch.N" subject to verification latest by 15th May 1987 and in default thereof to pay interest 15% per annum from 15.5.87 till payment would be made. A copy of the ad-interim order of the High Court was served upon by the Bombay Customs. Mr. K.C. Sidhwa, Sr. Central Govt. Advocate, thereafter, he sent a letter dt. 25.3.87 to the A/C Customs (Legal) stating therein the Interim relief given by the Bombay High Court and requested the A/C Customs to send para-wise comments for the purpose of filing an Affidavit in reply to the petition. On receipt of order of the Bombay High Court granting interim relief to the Petitioner, Mr. Harcharan Singh, Appraising Officer of Bombay Customs made an endorsement dt.30.3.87 on his file stating that the refund claim pertained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also charged for committing an offence under Section 5 (2) read with Section 5 (1) (c) and (d) of the PC Act, 1947 as they faced charge of obtaining gain for themselves or for any other person due to the criminal conspiracy and by dishonestly and fraudulently misappropriating or otherwise converting the amount which was entrusted to them as public servants and allowing Accused No. 5-Mr. K.P. Shah to obtain refund orders. 5. The aforesaid charges are faced by the Accused in the background, which lies in Writ Petition being instituted before this court in form of Writ Petition No.745 of 1987, decided by this Court in its Ordinary Original Civil Jurisdiction on 24/03/1987. The Petition was filed by M/s Shah & Co. and the Court made the Rule returnable on 08/06/1987, by passing order in terms of the 'Minutes of Order' handed over to the Court and marked as 'X'. The Minutes of Order under the signature of Advocate for the Petitioner recorded thus :- "1. Rule expedited. Interim relief in terms of prayer (c) on Petitioners giving a personal bond in favour of the Collector of Customs, Bombay. Respondents waive service. 2. Respondents are directed to refund to the Petitioners the ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that it is their statutory right to demand the refund of duty of customs paid, at the time of importing of the goods. A writ of certiorari was sought for quashing and setting aside the impugned act of Respondent No. 3. 7. The Petitioner in Prayer clause (b) and (c) specifically , specifically pleaded as under :- "(b) That this Hon'ble Court be pleased to issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 226 of the Constitution of India directing the Respondents, their officers, servants, subordinates and agents to immediately grant refund of the countervailing/additional duty amounting to Rs. 16,30,105.55 with interest thereon at the rate of 15% per annum from the date of the said application till payment. (c) That pending the hearing and final disposal of the Petition the Respondents, their officers, servants, subordinates and agents be directed by a Mandatory order and injunction to forthwith refund to the Petitioners the countervailing/additional duty amounting to Rs. 16,30,100.55 with interest thereon at the rate of 15% per annum from the date of payment of the same till the said amount is paid to the Petitioners." 8. Writ Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, pharmaceuticals and drug-intermediates not elsewhere specified." On 08/05/1975, one page circular was issued, which clarified as under:- "PHARMACOPOEIAL DRUG IN BULK A bulk pharmacopeial drug, even if it contains single therapeutic agents, which is not in the nature of patent or proprietary medicine at the time of clearance, would not be covered by Item No. 14D itself. Therefore, the question of such bulk drugs being exempted under Notification No. 25/67 C.E. dated 4.3.1967 would not arise. Such bulk drugs would be covered under Item 68, provided they are otherwise classifiable under the said Item." 10. In the backdrop of the above Notification, Rakesh Enterprises, a Partnership Firm, registered under the Partnership Act, carrying its business at Mumbai, challenged the order passed by the Assessment Collector under Article 226 of the Constitution of India, wherein it claimed that Phenol USP is a basic drug or a pharmaceutical or a drug intermediate and as per the Notification No. 55/75 dated 01/03/1975, excise duty is not leviable on import of Phenol USP. Despite, the Assistant Collector of Customs levied countervailing duty at the rate of 8%, the rate specified under Item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant interest to be calculated at the rate of 21% per annum. This is a patent exaggeration. The fair rate would be 12% per annum. The finding, therefore, is that interest will be payable at 12% per annum on the retained sums, on the expiry of the date to be specified in the order. 13. Before, I conclude, I will have to deal with a submission of Dr. Kantawala that Respondents be directed to deposit the cheques representing the sums payable unto Petitioners, in Court. The grievance is that despite orders, the authorities take their own time to comply with directions of the Court, thus compelling the successful Petitioners to take out further proceedings. I do not think that whatever may have happened in the past will be repeated in the instant case." The operative portion of the order read thus :- "Petitions succeed. The orders rejecting the applications for refund moved by the Petitioners, are hereby quashed. Respondents are directed to refund to the Petitioners the Additional duty recovered from them within eights weeks from this date. Failure to pay the same within the time stipulated will siubject Respondents to the additional liability of having to pay the said sums along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s firm, but he has denied that his firm had filed the writ petition for refund of additional duty of customs paid in respect thereof and no refund of additional customs duty had been received by him. On 7th and 10th October, 1998, Kumar Shah made statement before the Customs authorities that he has filed the petition in the name of M/s B. Sorabjee and had shown one Harshad Jayantilal Shah as its sole proprietor and he has received the refund of Rs.28,609.05 that was ordered to be made by the order under appeal. It was also disclosed in the affidavit that the Customs authorities had seized from the premises of Kumar Shah, the original Writ Petition that was lodged and filed in the Court and which ought to have been in the court record, which had sought relief in form of directions to deposit sum of Rs.28,609.05, with further interest at the rate of 15% p.a. from 10/04/1987. The Court then made a reference to the statement of Kumar Shah and recorded thus :- "The statement of the said Kumar Shah needs to be set out in some detail. He stated that this writ petition was filed in the name of B. Sorabjee of Raut Chambers, Samuel Street, Wadgadi, Bombay and showed the name of Harshad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the advocate. As the said Kumar Shah used to receive large amounts from the Customs authorities by way of substitution of exhibits, it was felt that a substitution of the exhibits in the original writ petitions filed in court would help him and the advocate, should the fraud be detected by the Customs authorities. Dr. Kantawala was aware that he, the said Kumar Shah, had been substituting the exhibits of the original writ petitons filed through Mr. Kantawala and, therefore, Dr. Kantawala had agreed to help him. The original writ petition had been received by the said Kumar Shah from Mr. Kantawala. The said Kumar Shah had requested Mr. Kantawala to get the original writ petition from the court. He did not know how Mr. Kantawala had obtained it. The photocopy that he had obtained of the original writ petition had been obtained unofficially with the help of Dr. Kantawala's staff. Both the original writ petition as well as the photocopy had been received by the said Kumar Shah from Mr. Kantawala. The said Kumar Shah had taken Mr. Kantawala into confidence and told him that as he had already substituted exhibit in the copy of the writ petition submitted to the Customs authorities f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Shah recovered the amount of refund. Further, it was also noted that Mr. Shah substituted Exhibit E in the copy of the writ petition submitted to the Customs authorities and now Exhibit E quoted the sum of Rs.14,83,730.22, due against 106 bills of entry. 16. The Division Bench recorded that the complicity of the members of the staff of Customs authorities in the substitution is evident, though it is not clear whether the amount in the substituted Exhibit E was received by Mr. Shah. Recording that the intention was to effect substitution of Exhibit E in the original writ petition, so that in accordance with the substituted exhibit, the refund can be claimed and mentioning in the writ petition that the refund amount shall be as per Exhibit E, without setting out what the amount was, the fraud was played upon the court. Being tormented, as the Court was used as a medium to commit forgery, in a very terse manner, Justice Bharucha noted as under :- "There is, with respect, a lesson in this for judges : that, so far as is possible, the decrees and orders they pass should set out what the amount is that is decreed or ordered to be paid. We live in parlous times when the court's reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch the prosecution against every person who has been involved in the activities and secured wrongful gain. We request the Commissioner of Police to depute a senior officer familiar with detention of cases of such nature and direct him to undertake the investigation after registering the complaint, and thereafter proceed against every person who is found guilty of the commission of the offence. The entire record in respect of this petition and appeal shall be forwarded by the Prothonotary and Senior Master in a sealed cover to the Commissioner of Police. The Commissioner shall inform this Court the steps taken in pursuance of this judgment. The Commissioner of Police may record statements of any person who could throw light on the fraud perpetuated. The advocate for Union of India shall also assist the Commissioner of Police in ascertaining the modus operandi adopted by the persons to commit fraud. The Commissioner of Police shall not spare any person if found involved in such serious offence." 19. In the backdrop of these observations, an FIR came to be registered against the Customs Officers alongwith Kumar Prabhulal Shah and in distinct criminal cases, they came to be charged w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Audit Section in Customs Department, working under UDC Mr. Ghag i.e. PW 2. Dr. Ishwar Singh Balwant Singh attached to Legal Cell of Customs Department as Appraiser, who was assigned the task of filing Appeals against the order of learned Single Judge of the High Court to its Division Bench, is examined as PW 7. PW 8 Venkappa Rai, is the Deputy Office Superintendent (DOS), serving in the Refund Department of Customs Department, who was assigned the task of supervising the work of UDCs and LDCs. PW 31 Yashodhan Parande serving as Deputy Collector, Customs, is also another witness who is examined to establish the procedure adopted for refund. The aforesaid witnesses are examined for establishing the working pattern of the Customs Department and as to how the files travelled from Legal Department to the Refund Department and to establish the process that ought to be adopted, and the one which is actually adopted. 21. Outside the Department of Customs, another set of witnesses is PW 9-Parmanand Raut, working as Custom Clearing Agent who was confronted with the bills of entry, which formed the basis of issuance of refund order, alongwith some private individuals like PW 10 Parik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hatching criminal conspiracy to cheat the Customs Department in getting the refund of Rs.16,30,105.85 by substituting the original Writ Petition No.745 of 1987 from the Custom file and substituting it with a fake one. 24. The prosecution alleged that Accused No. 5, Proprietor of M/s. Shah & Co. filed a Writ Petition No.745 of 1987, by relying upon the decision delivered by the Bombay High Court in Writ Petition No. 1808 of 1982 dated 12.08.1986, thereby declaring that the import of 'PHENOL USP' is not liable for countervailing duty under Section 3 of the Customs Tariff Act, 1975, and praying for a similar relief of quashing and setting aside the impugned action of Respondent No. 3 i.e. the Assistant Collector of Customs, in levying the customs duty and therefore, seeking its refund with interest at the rate of 15% p.a. It is the case of the prosecution that prayer clause of the original Writ Petition, prayed for refund of Rs.1,34,319.14, in accordance with Exhibit 'H' containing a statement of refund amount with reference to the file number alongwith the date of payment of duty and the amount of duty paid. Exhibit G to the said Petition was the Application in Form 'A' for refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.16,30,105.85 with interest thereon at the rate of 15% p.a. from the date of the Application till payment. Even prayer clause (C) had filled up the very same amount, a relief claimed by way of ad-interim relief. The Petition received was shown to have been affirmed by Mr. K.P. Shah, described as the Sole Proprietor of the Petitioners. Exhibit 'H' is alleged to be the substituted document in form of statement of refund amount and in utter contrast to Exhibit 'H' in the certified copy of the Petition which include 11 entries based on bill of entry, totaling to Rs.1,31,319.14, Exh. 'H' include 121 entries of distinct dates reflecting distinct payments totalling to Rs.16,30,105.85. 26. This Petition is accompanied with distinct forms of Application for refund by giving different names of Importers alongwith Shah & Co. and specimen forms also specifically mention name of the clearing agent, one of which is Eagle Transport Services, whose employee has been examined as one of the witness. The distinct amounts of refund are claimed by asserting that as the goods imported are bulk drugs/drug intermediaries, they are exempted from civil duty under the Notification and all the specimen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment, as an appraiser was entrusted with the task of filing Appeals against the orders of the learned Single Judge of the High Court, through the Division bench. He referred to Exh.22 as the starting point of the file and identified the endorsement by Harcharan Singh, an appraiser in the Legal Cell, as they were directed to prepare the grounds of Appeal urgently against the order granting interim relief. By the second endorsement on the file made by him, it was forwarded to the Refund Department for calculation of refund and he has deposed that it was done after discussion with the Assistant Commissioner (Legal) who made an endorsement about the order being an interim order. He has deposed that implementation of any court order is done by the Assistant Commissioner (at that time, he was referred to as 'the Assistant Collector'). However, on being confronted with Exhibit 20, 20A, 20B and 20C, he has deposed that he did not find Assistant Collector's approval anywhere in the Exhibits. In the cross-examination, he has admitted that the number of Writ Petition, name of the party or the amount of refund is not mentioned in the exhibits, nor he was aware whether Writ Petition No.745 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he signature of Appraiser, and after seeing what was filled by the clerk, he would put it before the appraiser and the appraiser signed the order thereafter. According to PW 8, he was not sure who made the calculations annexed to the refund order, showing the total amount to be refunded. On being confronted with Exh.21(colly), he identified the endorsement "DOS/Pre-audit for n/a pleas in blank ink and identified his handwriting as well as his initials". He also identified the endorsement showing "Ms. Balani for issue of R.O". According to him, after his endorsement, the file went for pre-audit and the stamp of pre-audit reflected so. Thereafter, it came back to R.O. cell and he made the second endorsement after the file was pre-audited for issuance of refund order and he stated that Ms.Balani was serving in the R.O cell. Similarly, when he was confronted with Exhibit-22, he identified two endorsements made by him to the similar effect and also identified the signature of Mr. Hirani, the Appraiser, who had signed on 16/6/1987, after which the file was sent for pre-audit and the stamp of pre-audit was put thereupon. After the file came from pre-audit, he again made the endorsement, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify the two other signatures on the refund order (Exh.20). He was also unaware as to who had made the calculations which were attached to the refund order. PW 2 referring to the signature of AC(R) where 'R' is struck off, depose that according to him, it was not R.K. Vig's signature, though it was the signature of A.C, and he also identified the endorsement in the handwriting of Maya Kotwani along with the signature of the DOS as well as stamp of pre-audit by the Audit Section. Very categorically, he deposed that he could not identify any signatures from that section, except the last endorsement in the handwriting of Appraiser H.K. Hirani, which is initialed and signed by him on 2/6/1987 and 12/6/1987. PW 2 was working under the supervision of Mr. Hirani, the Appraiser, though his superior authority was DOS. When CBI recorded his statement, he was not sure whether the two signatures dated 21/5/1987 were shown to him. He referred to an endorsement on page 3, for calling of documents and has testified that the original and duplicate bills of entry are generally called from MCD and the triplicate is called from the party. He also clarified that there is a manual for the Appraising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rajesh Singh working in the Computer Department of Customs, given Additional temporary duty in the legal side of Customs Department as LDC during 1986-1987, and who used to go to the Manifest Clearance Department (MCD) to get the documents when the requisition slip was given, is examined as PW 5. When confronted with Exhibit-22, he admit that he had signed at the foot of it and identified the first endorsement thereupon. When confronted with Exh.22C, he deposed that the bills of entry mentioned in this endorsement, were not seen by him before he made the endorsement but he did so as per the say of the superior. When the Court questioned him, who was the superior, he informed that it is the appraiser and the Office Superintendent, but he did not recollect who was the appraiser or the OS who directed him to put an endorsement. Since he had not seen the bills of entry, he was unable to depose whether the numbers mentioned in the endorsement were collected or not. He also admit that prior to the endorsement, there was no requisition slip for calling of those bills of entry. According to him, the old bills of entry are maintained in the MCD, which is two kms away from Customs House. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... triplicates. Because that is the party's copy of the bill of entry. That is the receipt of the party of the payment of custom duty. That party being the party named in the triplicate bill of entry is the one entitled to the refund of custom duty. Being the party who paid the duty. As far as I know the scrutiny is done by the Appraiser. TO COURT: (The party not named in the triplicate bill of entry will not be granted refund of the customs duty even if he produces the triplicate bill of entry and even if the payment under that bill entry has not been made before unless he is a high sea purchaser. Therefore the production of triplicate bill of entry is a must. Therefore the production of triplicate bill of entry is a must. It is also a must for another reason that once the refund is sanctioned the triplicate bill of entry has to be defaced by an endorsement to prevent further claims on that bill of entry.) 3. After the scrutiny and verification by the Appraiser the papers go to the Assistant Collector. The A.C. sanctions the amount. TO COURT: (He sanctions the amount by passing an order or refund of the amount in the file.) 4. After the refund is sanctioned a copy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion slips from various departments, but he was unable to state, whether he received 100 or more requisition slips at any time on any date from a single clerk of a single department. He also is unable to depose as to who brought the requisition slip to his department from the refund department, but vaguely stated that, he may be the despatch peon or clerk of the department. He also admit that he would not make any noting, mark or initial on the bill of entry, while giving it out. When he was confronted with 121 bills of entry, asking as to whether these bills of entry were given out by him, he answered in the negative, saying that he had not given out the bills of entry and he cannot say whether anyone else had given them out on the requisition slips. He deposed that bills of entry are not kept in lock and key and they are kept in open rack and any member of the staff can take out the bill of entry. When he was shown Mr. Naik (Accused No. 3), who was present in the Court, he admitted that he knew him and he was in the Refund Department and he used to sometime come to MCD for some work with the permission of the A.C. of the MCD. He was unable to state, whether More would have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. 4/61.) Procedure for processing of refund claims The receiving clerk in the (centralized) refund unit shall- (a) receive all the claims (preferred in the proforma prescribed). (b) stamp them with date and serial number. (c) enter them in the "Refund Register" (Annexure 'A') having serially numbered pages (which shall be duly certified on the fly-leaf of the register.) (d) fill up a cyclostyled acknowledgment memo (Annexure 'B'). (e) at the end of each day put up to the ministerial supervisor all the claims received during the day together with filled in acknowledgment memos and the refund register. (f) pass on to the despatch clerk for issue of all signed acknowledgment memos as soon as they are received back from the ministerial supervisor and (g) receive all correspondence pertaining to refund, enter them in the inward diary, put them up to the ministerial supervisor for being marked to the concerned dealing clerk or officer as the case may be. (2) The ministerial supervisor, on his part, shall sign all the acknowledgment memos, put up to him along with refund claims and return the same for issue. He shall them mark each claim to the dealing clerk/officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h documents and return the case file to the concerned dealing clerk for necessary action. Copies of such requisition will be kept handy (Annexure-'F' for (a) and usual requisition for (b). ... ... .... (6) As soon as all the information/documents required become available, he shall finalise the scrutiny of the claim and either take a final decision himself if he is competent or submit the case file together with his recommendations direct to the competent officer. Before, however, any claim is sanctioned by him or is put up to other competent officer for sanction, he shall obtain the original/duplicate Bills of Entry on which duty was paid and scrutinise the same for ensuring that the claim has been made in respect of the correct Bill of Entry and the same duly merits admission. If on such further scrutiny, however, the Appraiser finds that additional information and documents not called for initially are required, he will put up the case to the officer competent to decide the claim and obtain his approval for calling for the additional information or documents so that the competent officer gets a chance to satisfy himself that the additional information or documents so that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncouraged as involving less work all round and less delay. The dealing clerk shall at this stage obtain the counter signature of the Appraiser against the relevant entry in his case register. (14) The relevant case file shall then be sent back to the audit department for post-audit after the refund has been paid or credited to deposit account as the case may be, and the concerned voucher or credit entry is received from the Cash and Accounts Department for audit of daily transactions. After auditing the file with the voucher etc. the complete case file will be passed on to the C.R.A.D. also for post-audit. (15) on return the file shall be closed and recorded under the orders of the ministerial supervisor and the entry in the case register closed accordingly under countersignature of the ministerial supervisor. Similarly the relevant entry in the claims register shall also be closed." The Manual also contain distinct annexures, which include the Register of Claims, Refund Claim Acknowledgment, Register of Refund Cases (to be maintained by the dealing clerk) etc. 41. From reading of the procedure of refund, it is evident that all the claims received are to be entered in the Ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by M/s Shah & Co. From the record available before me, I have perused two important exhibits i.e. Exh.20 and 20A which are concerned with Writ Petition No.745 of 1987, where by the original refund order bearing No.C004135 of 87 R.O. duty 1561 to 1681/87 for Rs. 16,30,105.55 was issued in favour of M/s Shah & Co. This document was handed over by Assistant Collector of Customs, Central Intelligence Unit to Deputy S.P., CBI, Bombay on 16/09/1987. The refund order issued on 17/06/1987 mentioned the number C004135/87 in respect of R.O. duty 1561 to 1681/87 and the refund order is issued in favour of M/s Shah & Co. The order mentioned that the refund order must be presented for payment within 30 days of its date before the Accounts Department, New Custom House, Bombay with a stamp receipt discharged by the parties to whom the order is payable. The refund order make a reference to the Writ Petition No.745/87 and inform that the claim of Shah & Co. has been admitted for the sum of Rs. 16,30,105.55 in respect of customs dues for B/E Cash No.given P.T.O. (overleaf) dated P.T.O. This refund order is encashed by the proprietor of Shah & Co. on 18/06/1987 from the Chief Accounts Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f A.C.(R), which is identified to be of Mr. Vig (Accused No. 1) to the following effect :- "Kindly see the Collector's approval on previous page for implementing the Court's order in W.P.No.748/87. As per the minutes of the Court's order, the CVD collected on the goods 'Sorbitore U.S.P.' will have to be refunded. As such refund of amount 15,23,151=15 (Fifteen Lakhs Twenty Three Thousand One Hundred Fifty one and Paise Fifteen only) is verified in respect of 128 bills of entry, which may please be sanctioned in record of court's order. The R.O. may be issued on the basis of duplicate B/E after usual verification." 44. A perusal of Exh. 22 would disclose the portion marked 22C which has inscribed as below : "AO Legal Original & Duplicate. B/E No. 1810/32, 34, 35 36 etc. placed Opp. pl. SD / 3.4.87" AO Legal then has put his stamp on 5/3/87 to be followed by remark of AC Legal dated 20/4 as below :- "Pl. see, in this case only interim relief is granted and not finally decided L. M. arrange for parawise comments." A further comment from AC Legal reads thus :- "As discussed the file may be forwarded to Refund for cancellation of refund amount" After that in the handwriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the calculations, which are attached to the Refund Order, in form of Exh.20-A, which contain the date and amount. He is unable to identify the initials. PW 2 on being confronted with File No.C004137/87 has identified the noting by Hirani, but in respect of the signature on which AC/R, where R struck off, he is doubtful whether it is R.K. Vig's signature, but do not say that it is A.C.'s signature. He identified signature of DOS in black ink as well as endorsement below stamp of Pre-Audit made by Audit Section, though he did not identify the other signatures. He has identified the signature of Hirani on Page II of the Note Sheet, circled Page (IV) and has deposed that the endorsements are in the hand-writing of HK Hirani, Appraiser and they are initialled and signed by him on 02/06/1987 and 12/06/1987, but he could not identify the signature made in blue ink at the food of noting signed by HK Hirani. Even he could not identify the hand-writing against the stamp showing the figure Rs.16,30,105.85. PW 2, though working as UDC in Refund Order Cell, a small section of Refund Department in which Maya Kotawani was serving alongwith Anil Nair, LDC and the DOS was Mr. Rai who was handli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd marked it to D.C. (Legal), who signed it on 18/05/1987. The entire noting, according to her, is in the hand-writing of Jagdishchandra. The stamp on the left side at the bottom of corner of Note-sheet , according to her, is put in the office of D.C. showing its receipt on 18/05/1987 and according to her, the noting on Page 21B is identified by the witness , who has deposed that it was made in a normal course of conduct of Customs Department. As regards Exh.22, which is the Noting in respect of refund of duty of Rs.16,30,105.85 based on 121 bills of entry, she has deposed that the noting on Page 1 of Exh.22 was made by Harcharan Singh and he, in his hand-writing had filled in the blank spaces in the type-written portion and made endorsement below in his hand-writing, which he has initialed at the foot of the page by noting the date as 31/03/1987. According to her, this was made by him after she marked the file to him in the normal course. On being confronted with the revert side of Exh.20A, she deposed to the following effect :- "The first endorsement on this page is made by Rajesh Singh, Lower Division Clerk (L.D.C.). I think he has initialed at the foot of the endorsement. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dorsements are made in Ex-21. The file moves upon it being marked. The A.C. mark it to the appraiser. The Receiving Clerk hands it over to the Appraiser. The file remains in the custody of the officer who deals with it. There is not locking arrangement. The files are kept in the cup boards. Sometimes the cup boards are locked. Sometimes the receiving clerks personally hands over the files. Sometimes it is sent through a peon. 12. After receiving the file from the receiving clerk I was required to register it in the C-Register and hand it over to the concerned Appraiser. When we opened the C-file we given number to the file. As in this case the number is C-4135/87. This number is also written on the top of page 3 of the note sheet. This number is also written on the top of page 3 of the note sheet. I do not remember the date on which the order of refund was passed by the High Court in this Writ Petition. The order on which Interim Reliefs were given in this case is mentioned on page 1." From the deposition of this witness, it is clear that the files were kept in cupboards which were not locked and she is unable to distinguish between the Writ Petition which was received in the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s signature after seeing what the clerk had filled in and then put it before the Appraiser, who signed the order. Even he is unaware as to who made the calculations annexed to the Refund Order. On Exh.21C he identified the two endorsements made by him circled in Red. As far as Exh.22 is concerned, he adopted the similar procedure and he made two endorsements stating, "R.O. put up for signature on 16/6/87" and also stating "D.O.S./Pre-Audit for n/a please" . The Appraiser Mr. Hirani signed on 16/06/1987 and after the two endorsements were made, file was sent for Pre-Audit. Once the file came from Pre-Audit, he made further endorsements since he was in charge of the file and endorsement made on 17/06/1987 read to the following effect "Sri Nair plese Issue R.O.". PW 8 identified the initial and hand-writing as well as the three endorsements made by him and checked by the Appraiser H.K. Hirani, on Exh.22D, which is encircled in Red. The file was, therefore put up for Post-Audit (Exh.22E). PW 8 has categorically deposed that the refund order has been sanctioned by the Asst. Collector Mr. Vig whose signature is on the endorsement. 52. In light of the aforesaid evidence brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in Exh.22C were never sent by him and he do not remember which Appraiser or O.S. had told him to put endorsement. He admit that, prior to his endorsement on Exh.22C, there is no requisition slip for calling for these bills. When confronted with Exh. H to Exh.16, he has categorically deposed that the bills of entry cannot be traced and he had not called for any bills of entry from the MCD. Anil Nair (PW 6) when confronted with 22 bills of entry, out of the bundle of 121, admit that they have been stamped and signed by him on the reverse page and this was done in the normal course of conduct of the business. Nobody is aware as to who had prepared the computation of the bills of entry for the purpose of refund and though there are tick marks on Exh.20A, the prosecution has failed to establish that they are done by Mr. Hirani as the person who made an endorsement on each of the page of Exh.20A, is not examined. The prosecution witnesses have stated that they are unaware who has made this computation. Admittedly, the bills of entry were not called from the MCD , but one thing is clear, that is the existence of these bills of entry, on which the CVD was paid. 53. In the whole proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for, the figure of Rs. 16,30,105.55 is separately typed. Similarly, when prayer clause (b) and (c) are perused, this figure found typed. PW 13 admitted that he also typed the blanks in Form 'A' which are the few forms of Application for refund of custom duty and charges, with every form mentioning the name of Shah & Co. as the Proprietor. Accompanying this Petition is Exh. H, which has computed the refund amount as Rs. 16,30,105.55 and this is the Petition which was received in the Customs Department, being numbered as Custom File No. 4135. The peon working in Shah & Co. admitted that it is not only Exh.41, which he had typed, but he had typed many other papers in which he had filled up the blanks in the cyclostyle papers. He also disclosed that they used to bring cyclostyle copies from one shop in Fort or some person used to deliver the cyclostyle papers. Responding to the Court's query he state that the shop is in a lane, which is behind the shop of Advocate (Vakil) one Mr. Kantawala and he can show the shop. 55. PW 13 has admitted that Mr. Kantawala was Mr. K.P. Shah's Advocate and he used to also go to Mr. Kantawala's office with Mr. K.P. Shah and sit outside. When confront ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under :- "17. It is not true that H.K. Hirani and K.P. Shah never used to meet in the custom office as stated by me. I had stated everything truthfully to Mr. Godbole. I do not remember whether I had stated that K.P. Shah and H.K. Hirani met in the custom house to Mr. Godbole. It is not true that H.K. Hirani, K.P. Shah and Avasti never met in Lalit hotel. I do not remember whether I had stated before the CBI Officer that H.K. Hirani, K.P. Shah and Avasthi used to meet in Hotel Lalit. At the time my statement was recorded I had remembered everything. Mr. Godbole had explained to me what was recorded in my statement. I had not pointed out any errors or omissions in my statement to Mr. Godbole." 58. From deposition of this witness, a peon working with Accused No. 5, it is evident that the cyclostyle petitions were obtained by him and the gaps were filled in, in relation to its foundation and the amount to be refunded and this was all done at the instance of the Accused No. 5. As far as the bills of entry are concerned, he has categorically admitted that they use to bring the bills of entry from the Customs Department and he clarified by stating that they were not the blank bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Shri. K.P. Shah. The certified copy of the Writ Petition of Shah and Company (Exh.16) was tallied with the office copy by PW 1 and it varied from the petition produced in the Customs Office (Exh.41) i.e. copy of the Writ Petition in the office of the Sales Tax Department on the following aspects:- (a) In the paragraph No. 1 in the certified copy of the petition read thus:- "The petitioner is a sole proprietary firm and carrying on business inter alia as importer of drugs and pharmaceutical products at 33, Dariyasthan Street Vadgadi, Bombay-400003. The sole proprietor of petitioner is a national citizen of India. The petitioner is a high seas purchaser and purchase the imported goods on high seas sale basis from M/s Poopally Foods." Paragraph No. 1 of Exhibit 41, however reads thus:- "THE PETITIONER IS A SOLE PROPRIETARY FIRM AND CARRY ON BUSINESS INTER-ALIA AS IMPORTER OF DRUGS AND PHARAMCEUTICAL PRODUCTS AT 33, DARIYASTHAN STREET VADGADI, BOMBAY-400 003. THE PETITIONER IS A NATIONAL CITIZEN OF INDIA. THE PETITIONER IS A HIGH-SEAS PURCHASER AND PURCHASE THE IMPORTED GOODS FROM AS BELOW COMPANIES. 1. ANUP ORGANICS. 2. ASTATIC INDUSTRIES. 3. AMRITLAL CHEMAUK LTD. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Department what was processed was a Writ Petition placed at Exhibit 41, which differ in the description of the petitioner as it is pleaded that the petitioner K.P. Shah was importer of drugs and pharmaceutical and a high seas purchaser and had purchased the imported goods from 36 companies named therein, whereas in the original petition, he had purchased goods only from one entity M/s Poopally Foods and the petition was accompanied with form A, i.e. the application for refund of custom duty and charges, where the importer is shown as M/s Poopally Foods, and it bear the signature of Shah and Company for Poopally Foods. In Exhibit 41, the Petition processed by the Customs Department was accompanied with 11 applications for refund and this included M/s Anup Organics, M/S Amritlal Chemauk Ltd, Abbasi Brother (P) Ltd., C. N. A. Exports Pvt. Ltd., 6. Creative Garments., Chemida Enterprises., Colour Chem Ltd., Chajad Plastics., Fairdeal Traders., Farmson Pharmaceutical Gujrat P. Ltd., Farmson Antioxidants., i.e. entities upto serial No. 12 in paragraph No. 1 of the petition. The form (G) are only annexed as a few among the 121 refund applications and Exhibit-H reflected the amount by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion that a fictitious claim was made by him was denied. Categorically, the Solicitor admit that as a matter of practice, he annexed only one xerox copy of triplicate bill of entry an craved leave to rely upon the rest. He admit that the Writ Petition of others, were filed through Mr. K.P. Shah, because they were from one vicinity and probably Writ Petition No. 2228 of 1986 must have the first Writ Petition filed for K.P. Shah. PW 1, admit that in every case, two copies of Writ Petitions were served upon the Customs Department, one for the Legal Department and another for the Refund Department and both the copies were sent to the legal section and they would be either affirmed or un-affirmed. It is surprising to note, during the cross-examination of PW 1, the Accused No. 1, called upon the prosecution to produce the original Writ Petition No. 745 of 1987, as it was alleged that the substitution had taken place in the High Court itself. The certified copy (Exh.16) was certified to be a true copy as on 26/08/1987 and upon this stand being taken, the original copy of Writ Petition 745 of 1987 along with cyclostyle letter of Kantawala and Company was produced before the Court. PW 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether this petition was transmitted to the Refund Department along with Exh.17 is not very clearly established by the prosecution as PW 4, the Technical Assistant, who received the documents and letters from the receiving clerk and use to put up for the appraisal of action including court matters has stated that after taking an entry of the Writ Petition in 'C' register, the papers were forwarded to appraisal. When confronted with Exh.21, she identified the hand writing of Mr. Haricharan and stated that, in the normal course of business, the file was moved. When confronted with Custom File No. 4135 of 1987, which included the letter dated 25/02/1987 (Exh.17), she has deposed that on seeing the endorsement of the department, a Writ Petition was received under the cover of this letter, but she was unable to state which Writ Petition copy was received. When she was shown a copy of the Writ Petition in the file (Exh.18), she admit that there is no endorsement of the Legal Cell on any of the pages of the Writ Petition and therefore, she cannot say with certainty whether this copy of the Writ Petition was served along with Exh.17 or whether any other copy of the Writ Petition was se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e names find mention in para No. 1 of Exh.41, prepared by PW 13. One Upendra Kumar Choksi, a sole proprietor of Anup Organics, whose name is mentioned by the petitioner in Writ Petition No. 745 of 1987, by stating that he has purchased the imported goods from 36 entities including Anup Organics, has admitted that he is the sole proprietor of Anup Organics, which manufactured chemical, which required raw material and Phenol was one of them. He use to import Phenol and when he is confronted with the first bill of entry No. 2332 being part of Exh.29 (colly), he admitted that the goods were imported by his firm and the declaration on the reverse side of the bill (Entry 29-E) was signed by him but, he deposed that he imported Phenol for his own consumption and never sold it to anyone and he paid the custom duty mentioned in the bill of entry, but never claimed the refund nor filed any Writ Petition for refund. He also deposed that he had never given power of attorney to anyone to claim refund of the duty and he had no relation with M/s Shah and Company or K.P. Shah. On similar lines PW 16, PW 17, PW 18, PW 19 have deposed that they were in the business of Chemicals and they have import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to witness box and deposed that he purchased chemicals from local market or importer and on obtaining a letter of credit, it was given to the Clearing Agent, who passed it on to the Customs Department and he paid the custom duty amount, which was calculated. On being confronted with Exhs. 33 and 34, the triplicate bill of entry, he deposed that the consignment was sold to Pukhraj Engineering, in accordance with the contract (Exh.34). It is further deposed by this witness that, the amount mentioned in the bill of entry was paid by Pukhraj Engineering and he was shown that the goods were consumed by it and not sold further. 68. Further corroboration of this version is found in the testimony of PW 11, the Director of Pukhraj Engineering and Chemicals, who admitted that he purchased the goods mentioned in the bill of entry (Exh.33), from M/s Chemida Enterprises on high seas basis and paid the custom duty in the bill of entry. He deposed that he never claimed refund of such custom duty nor he filed any Writ Petition in the Bombay High Court and according to him, his company was the end user of Phenol and never sold the product further. 69. From the evidence that is lead before the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code, Mr. Hirani produced on record his statement of defence in addition to the denial of the incriminating evidence produced by the prosecution. When he was specifically asked, whether he had power to sign the refund order, he stated that he had to authenticate the sanction of the Assistant Collector on the Refund Orders and when asked how did he authenticate the same, by referring to Exh.20, he has stated that he authenticated it by signing the Refund Orders upon seeing the sanction of the Assistant Collector and pursuant to working of the Refund Orders. He did not deny his signature on the Refund Order and he also do not deny the copy of the Writ Petition put on the Refund Order. He was specifically asked the following questions :- "Q.6 What did you particularly see in the Writ Petition ? Ans. I saw the exhibit on the basis of which the refund is claimed. I saw the total amount claimed in Prayer-C. Q.7 Is is correct that you also saw the bills of entry ? Ans. Yes. I saw the original and duplicate bills of entry. Q.8 How did you get the original and duplicate bills of entry ? Ans. By way of my endorsement, I marked it to my office to get the original and duplicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asstt. Collector of Customs ( R) (A-1) to meet the deadline of the Implementation of the Court's orders to avoid the contempt of court and penalty by way of interest payable, a clerk of the Refund section was deputed i.e. Mr.Y.R. Naik (A-3) to visit MCD (Record Section) at Masjid Bunder (2 kms away rom Customs Office) to collect the original and duplicate Bills of entries for verification. It is important to note that the Bills of Entries cannot be traced in the record section i.e. MCD until and unless the Cash No. Date, B/E No. and date, Vessel's/Ship's Name and Date, etc. are known and this fact can only be available with the Importer, High Sea buyer or Customs House Agent only. Also as per the Customs Act Sec.27, the Refund is payable to the Importer or to a person who has born the incidence of duty i.e.who has paid the duty. The duty is paid by the High Sea Purchaser and therefore, he can claim the Refund, which the petitioner (A-5) had claimed in the petition before the High Court and who passed the favourable orders to the petitioner. As the orders were given by the Collector of Customs and Asstt. Collector of Customs to implement the Court orders within the time-limit p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icted for committing the offences punishable under Sections 420, 467, 468, 471 of IPC along with Accused No. 5-Mr. Kumar P. Shah. But, on the other hand, Accused No. 1-Ravindra Kumar Vig, Accused No. 3-Yashwant Raghunath Naik and Accused No. 4-Rajendra Ramchandra Gandhi are acquitted, by giving benefit of doubt, as they were not found guilty of committing the offence of criminal conspiracy. The learned trial Judge has found the Appellant guilty of substituting the Writ Petition No.745 of 1987 in conspiracy with Accused No. 5-Kumar Shah and reading of 124 pages of the judgment, I do not see any convincing observations to support the finding that it is he, who had conspired with Accused No. 5-Kumar Shah. It is true that the Appellant had signed the sanction order, but a clear scrutiny of the file that moved from the Legal Department to the Refund Cell and, thereafter, till the issuance of Refund Order, I have seen involvement of several officers and in fact it included some of the witnesses also. The role of Accused No. 1-Ravindra Kumar Vig, Assistant Collector of Customs (Refund Department), Accused No. 3-Yashwant Naik, Upper Division Clerk and Accused No. 4-Rajendra Gandhi in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f entry on which the duty was paid were included in Exh.'H' of the Petition, which obviously was substituted one, comprising of 121 bills of entry and as PW 13 had admitted that by looking into the bills of entry, he had typed the same in Exh. H. It has also come on record that in MCD, the bills of entry were kept open and though the prosecution has alleged that triplicate bill was must for refund, but when one look at Exh.20A, it is seen that all the bills of entry, which were mentioned in Exh. H, were verified by tick-marking and it was confirmed that custom duty was paid and it was so endorsed on the bills of entry that no refund was claimed by any one. It is not established by the prosecution that Exh.20A is prepared by Hirani. There is signature on each page of Exh.20A, but it is not proved to be of accused No. 2-Hirani. One thing is clear that from the original bills of entry, it was only verified, whether the custom duty has been paid and whether the bill of entry exists and that the amount has not been refunded. In the whole process, large number of orders from the Court were received for refund and since the Writ Petition itself was substituted, while it came to the Leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of which was produced before the Court, covered 121 bills of entry. Neither the Legal Department or the A.C. of the Refund Department or the Upper Division Clerk or Lower Division Clerk of the Refund Department checked as to whether K.P. Shah & Co. is entitled for the refund, as the solemn statement was made on oath, that he was dealing with the importers and had paid custom duty. 78. A very systematic fraud was played even on the Court and I have already noticed the anguish expressed by this very Court, in its order to which I have made reference. Moreover, the prosecution has failed to establish as to at what point of time, the substituted Writ Petition entered the system, as the Customs Department followed a set procedure on receipt of the writ petitions till the issuance of the refund order, pursuant to which a cheque was issued and deposited, and since accused No. 5 was the sole beneficiary of this goof-up, I fail to understand how Mr. Hirani could have been convicted under Sections 420, 467, 468 and 471 of IPC. As far as Section 420 of IPC is concerned, the ingredients of the Section necessarily contemplate; (i) fraudulent or dishonest inducement of a person by deceiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were filed before the High Court and how much amount of refund was claimed and received by him. Definitely, he had aid and assistance of those working in the Customs Department, but in my considered opinion, in absence of cogent and reliable evidence produced by the prosecution establishing that it is only Mr. Hirani, who has substituted the Writ Petition alongwith its annexures (Exh. H) and he is responsible for the conspiracy with Accused No. 5-Kumar P. Shah and this finding, being without any basis, cannot be sustained. The burden lies solely on the prosecution to establish the guilt of an accused, by adducing reliable and convincing evidence and in its absence, the accused definitely is entitled for the benefit. In the result, by setting aside the order of conviction and necessarily the imposition of sentence upon Mr. Hirani by the impugned judgment dated 26/06/1997, he is entitled for acquittal from all the charges levelled against him for which he was subjected to trial in Sessions Case No.78 of 1989. Resultantly, Criminal Appeal No. 466 of 1997 is allowed. CRIMINAL APPEAL NO. 465 OF 1997 79. Criminal Appeal No. 465 of 1997 arises out of the judgment delivered in Spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the trial Judge in a similar manner. Dr. Nitin Kantawala, the Solicitor, was examined as PW 1, who had filed Writ Petition NO746 of 1987 and the certified copy of the Writ Petition was produced on record, being marked as Exh. 8. Exh. H to Exh. 8 was the statement of total refund amount claimed in the Writ Petition. The custom file and the Refund Order was issued under No.C00 4133/87. Mr. Kantawala deposed that Exh. H to the Writ Petition was totally different from the Writ Petition, which was annexed to the letter dated 25/02/1987 from Kantawala & Co., as here the claim was staked at Rs.11,41,384.32 81. The common witnesses which are examined and who deposed on similar lines as in Sessions Case No.78 of 1989 are as below :- 1) Nitin Kantawala (PW 1) 2) Vijay Ghag (PW 2) 3) Prakash Jaitpal (PW 10) 4) Dinesh Hattangadi (PW 6) 5) Vijaykumar D. Arora (PW 4) 6) Manohar Godbole (PW 15) 7) Srikrishna Pandey (PW 16) 82. The Court also examined Ramchandra More, working in the Manifest Clearance Department as Court Witness No. 2, who was also examined in the earlier case. 72. The prosecution case, which was led before the Court in Special Case No. 51 of 1990 is comparabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the blanks in Exh. G as well as Exh. H. The copy of writ petition in File No. 4133 is identified by him, showing the blanks and it was taken on record as Exh. 26. On cross-examination by the Advocate of Mr. Hirani, he admitted that he had put the endorsement 'seen' on 23/04/1988 on the top left hand corner of page Nos.2 and 3 of the Writ Petition. Apart from this, his evidence largely remained the same as far as his association with K.P. Shah for last eight years and he had admitted that he used to visit his residence for typing work and fill in the gaps in exhibits. He is also confronted with Writ Petition No. 304 of 1987 in File No. C003952/87 (D-2(a)) and he admit all fill in the blank and putting the word 'order'. He has also filled in Exh. H to the Writ Petition. He has admitted the handwriting in the writ petitions and categorically deposed in response to the Court query that after typing the blanks, he used to give copy of the writ petitions to K.P. Shah. In his cross-examination, on he being examined as PW 10, he identified one Piyush Patel. He admit that whatever he has stated in the evidence of Special Case No.78 of 1989 was correct. 84. The entire procedure, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om House, Bombay and Mr. Kumar Shah, proprietor of M/s Shah & Co., entered in criminal conspiracy during the year 1986-87 with an object to cheat the Customs Department by fraudulently claiming refund of countervailing/additional duty paid on import of goods, by substituting the original court Writ Petitions with fictitious Petitions and in pursuance of the aforesaid criminal conspiracy, Mr. Kumar Shah neither filed Writ Petition Nos.283 of 1986, 298 of 1986, 123 of 1987, 305 of 1986, 337 and 1986 and 774 of 1987 nor the copies of the Writ Petitions were received in the Customs Department, but despite the same, the Appellant issued Refund Orders on the basis of fictitious Writ Petitions, which were never instituted. It is the charge levelled against the accused person that in furtherance of the conspiracy, Refund Order No.C004597/86 dated 07/05/1987 for Rs.7,79,846.34 was issued in favour of Shree Vidya Agro Chemicals at Bangalore and certain other Refund Orders came to be issued, the details of which were contained in the charge-sheet and reflected in the charge framed on 03/02/1997. The Appellant face a charge that he did not call for original and duplicate bill of entry from M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order dated 28/05/1987 for Rs.1,87,905.65 did not reveal any calculation prepared by anyone, except on the reverse of Refund Order itself, which was prepared by him. PW 2-Mr. Ghag stated that 15 Refund Orders are signed by Mr. Hirani, marked as Exh. 8(colly). He admitted that every Refund Order was preceded by note-sheets and all the Refund Orders were in favour of Shree Vidya Agro Chemicals. In support of the Court Question, he testified that note-sheets in all the Refund Orders are not available, but all the Refund Orders were prepared by him as usual, as per the orders of the Appraiser, Mr. Hirani. In cross-examination on behalf of Mr. Hirani, he admit thus :- "4. There must be a legal section file when there is a refund order. The Legal Section File No. is indicated on the refund orders. They are represented by the words "C00". The writ petition should be in the Legal Section file. The writ petition numbers are indicated on some of the refund orders. The other refund orders do not show any number of the writ petitions also. It could be the mistake of the clerk, the D.O.s or the auditor or anyone. I can not identify the initials of all the clerks who could have prepared diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the file used to come from the Legal Cell, is examined as PW 3, as she used to look after the files for refund claim. She deposed that she assisted Mr.V.K.Ghag (PW 2) and Mr. Anil Nair was her colleague. She was shown Refund Order No. 3913/87 dated 04/05/1987 and she admit that she had prepared the same and initialed at the foot of the Refund Order in black ink. The Refund Order was signed by the Appraiser, Mr. H.K. Hirani and she has prepared the Refund Order as per the note-sheet in the file in which the amount was sanctioned. In response to the Court query, PW 3 responded that entire filed is sanctioned and prepared and sent to them and based upon that, they have only filled in the Refund Order. She was confronted with six other Refund Orders and she admit thus :- "3. (shown 6 other Refund Orders dtd.22/7/87, 29/7/87, 14/5/87, 18/5/87 and 27/5/87 bearing numbers 3945, 3111, 3898, 3940 and 3280) I have similarly prepared and signed these refund orders also." 94. As per PW 3 one Mr. Rai was working as DOS and according to her, the files were given to him for Refund Orders as a matter of practice, but the files never came back. PW 3 categorically state as below :- "We used to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the account of Shree Vidya Agro Chemicals. He admitted that entries in the statement of Account No. 3302 were kept in the ordinary course of the conduct of the business. He also deposed about the Account Opening Form of Kumar Prabhulal Shah in regards to Account No. 3294 and he identified the specimen signature of the account of Shree Vidya Agro Chemicals and deposed that statement of Account No. 3296 has been maintained in the ordinary course of conduct of business of bank. Another Account No. 3310 was also opened in the name of Mehta Kishan Jamanadas, on introduction of Kumar Shah of K.P. Shah & Co. and this witness has deposed about other account in form of Account No. 3207 in the name of Jaysukh Maganlal Doshi and Account No. 3308 of J.M.Doshi, Proprietor of India Trade Centre and narrated the specific procedure for opening of the accounts. He also gave the details about the amounts, which were credited in the Account No. 3296 pursuant to the debit voucher, when 9 cheques signed by Proprietor of Shree Vidya Agro Chemicals were issued and 3 pay-in-slips showing the credit of the amount were also proved by him. Evidence of this witness on the application of the prosecution was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maganbhai Parmar (PW 16), who is also examined as witness in Special Case No. 49 of 1990, who was working in the Account Department of Customs a Assistant Chief Accountant. He admitted to have signed the cheques for the refund after the Deputy Cashier has initialed them, as the cheques were delivered by giving a token against the Refund Orders and taking back the token, when the cheque is handed over. On confronted with Exh. 8 (colly), he admitted that except one Refund Order, all the cheques are written by him and the Refund Order dated 07/05/1987, Mrs.Vaidya had signed. 100. The Appellant-H.K. Hirani was confronted with the incriminating evidence and he specifically responded to the questions put to him in the following manner :- "Q.10 Is it correct that you would yourself see the legal section file, the copy of the Writ Petition etc. and after verification of the above mentioned docs. you would make your endorsement for sanction of the Asst. Collector before you signed the Refund Order ? Ans. Yes Q.10A (Shown the last few Refund Order from Ex-8 Colly) Which Writ Petition Copy did you see in case of these Refund Orders. Ans. I cannot say which Writ Petition copies I saw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y were granted on the copies of the writ petitions in the custom files. If the amounts in these writ petitions are different from the amounts in the writ petitions in the custom files then obviously they are different writ petitions. The refund is granted on the basis of the minutes of the order and the minutes of the order must be in the name of the petitioner in the writ petition. I fail to see any amount mentioned in writ petition No. 305/87. The amount claimed in the writ petition No. 298/87 cannot be seen. In writ petition No. 336/87 Rs.7,685/- is claimed giving details of the cash number and date of the bills of entry. (Shown Writ Petition No. 336/87) Q.41 Can you explain how though this writ petition is in the name of Ashok Traders you have granted the R.O. to S.V.A.C.? Ans. The writ petition in the custom file must be of S.V.A.C. I have not granted the refund. Q.42 When you saw that the copy of the writ petition was of S.V.A.C. did you call for any docs. from S.V.A.C. when you verified the R.O. Ans. No. I have processed the writ petition on the basis of the org. and duplicate bills of entry, as per details given in that refund order. 102. Mr. Hirani had categoric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the originals cannot be called for, for want of relevant particulars and the bills of entry, which can be had only from the triplicate, which are the carbon copies and even if they are not called for from the writ petition annexures, they would be collected from the rack of MCD by anyone who is the stock of Bombay Customs. The learned Judge has failed to look into the Custom Manual, which was relied upon by Mr. Mirajkar, which do not contain any rule requiring calling of triplicates. What is seen in all these cases is, when the Court passed orders of refund in various Petitions and directed the refund in terms of Exh. H, the modus operandi adopted by Mr. Kumar Shah was to replace Exh. H, which had enlisted the bills of entry number and, therefore, it was easy to track the further details from the original and duplicate bills of entry, which were lying in the MCD. The Custom Apprising Manual did not contemplate calling of the triplicate, as it only warrant calling of original/duplicate bills of entry on which the duty was paid and scrutinize the same for ensuring that the claim has been made in respect of the correct bill of entry and it merits admission. What was, therefore, requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en destroyed in the Customs Department and not produced, though processed, resulting to the Refund Orders, one fails to understand how Mr. Hirani can be blamed for the same. He must get the benefit of the doubt created by the prosecution in its case. In the result, by setting aside the conviction as well as the sentence imposed upon him by the Judgment dated 26/06/1997 in Special Case No. 50 of 1990, Cri. Appeal No. 464 of 1997 is allowed. CRIMINAL APPEAL NO. 453 OF 1997 104. This Appeal arises out of Special Case No. 49 of 1990 in which the Appellant-Mr. Hari Krishna Hirani faced accusations along with Rajendra Gandhi (Accused No. 2), Mr.Yashwant Naik (Accused No. 3), Mr. Kumar Prabhulal Shah (Accused No. 4) and Mr. Piyush Prabhudas Patel (Accused No. 5). All the accused persons faced the charge of criminal conspiracy for fraudulently claiming refund of countervailing/ additional duty paid on the import of Propylene Glycon, by substituting the original Court Writ Petition No. 304 of 1987 with the fictitious one and in pursuance of the conspiracy, Mr. K.P. Shah filed a Petition in the name of Mr.Pinakin J. Shah, Sole Proprietor of M/s Jirad Chemicals, shown as carrying business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prosecution examined one Pinakin Ramniklal Mody, who was carrying on business in the name of 'M/s Jirat Chemicals' and on being confronted with Writ Petition No. 304 of 1987, he deposed that he did not know any Pinakin J. Shah and he was never the Proprietor of M/s Jirat Chemicals and it is the partnership firm of his wife and brother, of which he was the Manager. On being confronted with applications for refund (Exh.3 to Exh.12), he deposed that he never claimed refund from the Customs Department, though in some other case, his firm had asked for a refund from the Customs Department and he admit that he had preferred two applications to the Customs Department directly, for refund of Rs. 40,116.80 and Rs. 1,25,073.30, but the amount is still not received. On being confronted with Exh.10, the certified copy of Writ Petition No. 304 of 1987, he deposed that he never signed that pages and nobody from his firm had signed it nor any power of attorney was given to any one to sign the same. He deposed that he was acquainted with one Mr. Harshad Shah (PW 4) and he given the papers to Mr. Harshad Shah, who in turn, given them to Mr. K.P. Shah and was told that nothing was received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and was sentenced to suffer R.I. for a term extending to seven years. In addition, he was held guilty under Section 5 (2) read with Section 5 (1) (d) of the Prevention of Corruption Act, 1947 and sentenced to suffer R.I. for a term extending three years. Both the sentences imposed upon the Appellant were directed to run concurrently. The Appellant, who was already on bail, was directed to be released on furnishing fresh bail bond in the sum of Rs. 1,00,000/- with one or more sureties. As far as the accused persons i.e. Accused Nos. 2, 3 and 5 are concerned, they were acquitted and the bail bonds issued by them was cancelled. 110. As far as the accusations against the present Appellant is concerned, it stand on the same footing, as in the other three criminal cases and, the common witnesses were examined, including the key witness, Mr. Prakash Jaitpal (PW 15), who deposed in sync with his earlier evidence that he was working with Mr. K.P. Shah and he had seen Mr. K.P. Shah, meeting Accused No. 2 at Lalit Restaurant. When confronted with Writ Petition No. 304 of 1987 in COC 3952/87, he admitted that page numbers on the Index are in his handwriting, but the words, "P.J. Shah Sole P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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