TMI Blog2006 (10) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice to Respondent No. 1 on 24th September, 2004 for violating the provisions of the Customs Act, 1962 (for short the Act) and the matter is pending adjudication. A prosecution was also launched against Respondent No. 1 under the provisions of the Act and a charge sheet was filed in the Court of the Additional Chief Metropolitan Magistrate, New Delhi on 30th September, 2004. 4. On his part, Respondent No. 1 made an application under Section 127-B of the Act for settlement of the case before the Customs and Central Excise Settlement Commission, Delhi Bench. Respondent No. 1 also made an application under Section 137(3) of the Act before the Chief Commissioner of Customs (DZ) on 18th January, 2006 stating that he does not wish to contest the case against him and he would like the Chief Commissioner as the Compounding Authority to settle the case and grant him immunity from prosecution. This application was made by him under the provisions of the Customs (Compounding of Offence) Rules, 2005 (for short the Rules) which have been framed in exercise of powers conferred by Sections 156 and 137 of the Act. 5. We have been told that the application filed by Respondent No. 1 befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of Section 245-D(4) of the Income Tax Act, 1961. It was contended in that case that under Section 245-C of the Income Tax Act, an assessee was required to make a full and true disclosure of his income in the application for settlement. The Supreme Court was really concerned with a case of fraud or misrepresentation of facts and not with a case of failure to make a full and true disclosure of facts. To that extent, the decision relied upon by learned counsel for the Petitioner does not take the matter any further. However, it is of importance to note that in paragraph 14 of the Report, the Supreme Court noted that the object of the legislature in introducing a procedure for settlement of cases is to see that protracted proceedings before the authorities or in courts are avoided by resorting to settlement of cases." 10. In State of Jharkhand and Anr. v. Govind Singh, AIR 2005 S.C. 294, the Supreme Court observed that where a discretionary power is conferred upon a statutory authority, he must exercise it in a judicial manner and after recording of reasons as to why compounding is necessary. On the basis of this decision, learned counsel for the Petitioner contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t fact pertaining to an admission of guilt has not been disclosed. 16. The fact of the matter is that Respondent No. 1 has admitted in his application before the Compounding Authority that he has committed an offence under Sections 111 and 77 of the Act which is punishable under Sections 132 and 135(1) (a) of the Act. Whether the offence was committed by him through oversight or deliberately is an issue that may have to be adjudicated upon by the learned Additional Chief Metropolitan Magistrate in the trial of the case. In any event, the Petitioner was given an opportunity by the Compounding Authority of contradicting the oversight theory propounded by Respondent No. 1. This opportunity was given to the Petitioner who was entitled, in terms of Rule 4(2) of the Rules, to furnish to the compounding authority a report on the particulars furnished by Respondent No. 1 in his application or any other information which may be considered relevant for the examination of the application. The Petitioner did furnish its report and did contradict Respondent No. 1 on the modus operandi relating to the commission of the offence, but that did not convince the compounding authority to reject the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion that the applicant has not fully or truly disclosed all the facts. Of course, if a specific fact which would have a bearing on the exercise of discretion of the Compounding Authority is not disclosed, we may be entitled to interfere in the matter but that is not the problem that we are faced with because the discrepancies pointed out to us are not at all substantive. 20. In so far as the second contention of learned counsel for the Petitioner is concerned, namely, that the investigating agency was not given a hearing in the matter, we are of the view that the Rules do not postulate an oral hearing being given to either of the parties when an application for compounding is intended to be allowed. However, the proviso to Rule 4(3) of the Rules provides that where the Compounding Authority intends to reject the compounding application, then the applicant should be heard in the matter and the grounds of rejection shall be mentioned in the order. There is no requirement in any provision of the Rules which mandates the Compounding Authority to orally hear the investigating agency in the event the compounding application is allowed. In this context, we may only mention that the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis on which the compounding fee is levied. The Compounding Authority then gave his decision on the merits of the case. Needless to say, the Compounding Authority is not a judicial officer and is not expected to write a judgment as we would understand it. All that his order is required to show is that there has been an application of mind and that the conclusions arrived at by him are supported by reasons which show such application of mind. The purpose of reasons being made a part of the order is that they can be judicially reviewed, if necessary. Once that requirement is met by the Compounding Authority in his order, it will serve the needs of law. In so far as the present case is concerned, we have examined the order passed by the Compounding Authority and it meets the requirements that we are concerned with. 25. On all three counts, we are not in agreement with learned counsel for the Petitioner and, therefore, dismiss this petition. 26. Before concluding, we may notice that recently the Code of Criminal Procedure, 1973 has been amended by introduction of Chapter XXI-A relating to 'plea bargaining'. In the Statement of Objects and Reasons for introducing the Bill, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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