Madras High Court
Deepak G.Siroya vs / on 28 March, 2022
Author: G.Jayachandran
Bench: G.Jayachandran
Crl.O.P.Nos.5923, 5926, 5933 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 21.03.2022 Pronounced on : 28.03.2022
Coram::
THE HONOURABLE Dr. JUSTICE G.JAYACHANDRAN
Criminal Original Petition Nos.5923, 5926, 5933 of 2022
Crl.O.P.No.5923 of 2022
Deepak G.Siroya,
Son of Shri Gheesulal,
Flat No.303, Tower No.4,
3rd Floor, North Town Estate,
Stephenson Road, Jamalia,
Chennai – 600 012.
Presently detained as remand prisoner
at Central Prison, Puzhal ... Petitioner/1st accused
/versus/
The Senior Intelligence Officer,
Directorate of Revenue Intelligence,
D/o.Revenue, Ministry of Finance,
Government of India, Chennai Zonal Unit,
No.27, GN Chetty Road, T.Nagar,
Chennai – 600 027. ... Respondent/Complainant
Prayer: This Criminal Original Petition is filed under Section 439 of Cr.P.C.,
pleased to enlarge the petitioner on bail in R.R.No.6 of 2022 in
F.No.DRI/CEZU/VIII/48/ENQ-01/INT-04/2022 on the file of respondent/
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Crl.O.P.Nos.5923, 5926, 5933 of 2022
Directorate of Revenue Intelligence, Chennai Zonal Unit, Chennai subject to such
terms and conditions as this Hon'ble High Court.
For Petitioner : Mr.B.Satish Sundar
For Respondent : Mr.N.P.Kumar,
Special Public Prosecutor, (DRI cases).
Crl.O.P.No.5926 of 2022
Shri.Santosh Kothari,
Male, Age:-30 years,
S/o.Late Shri.Kalyan Chand,
Rishab Apartment, No.43,
Mint Street, Sowcarpet,
Chennai – 600 001. ... Petitioner/3rd Accused
/versus/
The Senior Intelligence Officer,
Directorate of Revenue Intelligence,
D/o.Revenue, Ministry of Finance,
Government of India, Chennai Zonal Unit,
No.27, GN Chetty Road, T.Nagar,
Chennai – 600 027. ... Respondent/Complainant
Prayer: This Criminal Original Petition is filed under Section 439 of Cr.P.C.,
pleased to enlarge the petitioner on bail in R.R.No.6 of 2022 in
F.No.DRI/CEZU/VIII/48/ENQ-01/INT-04/2022 on the file of respondent/
Directorate of Revenue Intelligence, Chennai Zonal Unit, Chennai subject to such
terms and conditions as this Hon'ble High Court.
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Crl.O.P.Nos.5923, 5926, 5933 of 2022
For Petitioner : Mr.B.Satish Sundar
For Respondent : Mr.N.P.Kumar,
Special Public Prosecutor, (DRI cases).
Crl.O.P.No.5933 of 2022
Shri.Sunil Parmar,
Male, Age:31 years,
S/o.Shri.Kanihayalal,
Flat No.104, Tower No.10,
1st Floor, North Town Estate,
Perambur Barracks Road,
Chennai – 600 012. ... Petitioner/2nd Accused
/versus/
The Senior Intelligence Officer,
Directorate of Revenue Intelligence,
D/o.Revenue, Ministry of Finance,
Government of India, Chennai Zonal Unit,
No.27, GN Chetty Road, T.Nagar,
Chennai – 600 027. ... Respondent/Complainant
Prayer: This Criminal Original Petition is filed under Section 439 of Cr.P.C.,
pleased to enlarge the petitioner on bail in R.R.No.6 of 2022 in
F.No.DRI/CEZU/VIII/48/ENQ-01/INT-04/2022 on the file of respondent/
Directorate of Revenue Intelligence, Chennai Zonal Unit, Chennai subject to such
terms and conditions as this Hon'ble High Court.
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Crl.O.P.Nos.5923, 5926, 5933 of 2022
For Petitioner : Mr.B.Satish Sundar
For Respondent : Mr.N.P.Kumar,
Special Public Prosecutor, (DRI cases).
COMMON ORDER
These three petitioners have filed the bail. The 1st accused/Deepak G.Siroya is the petitioner in Crl.O.P.No.5923 of 2022, 2nd Accused/Santhosh Kothari is the petitioner in Crl.O.P.No.5926 of 2022 & 3rd Accused/Sunil Parmar is the petitioner in Crl.O.P.No.5933 of 2022 they all were arrested on 03.02.2022, for the alleged offences under Section 135(1)(b) and 135 (1)(ia) of Customs Act, 1962, in R.R.No.6 of 2022 on the file of Additional Chief Metropolitan Magistrate, EO-I, Egmore, Chennai.
2. The case of the prosecution in short is that, the Custom Duty free Gold/Silver/Platinum bars are available under the scheme for “Export against the Supply by Nominated Agencies,” for manufacturers and traders under Circular No.27/2016 dated 10.06.2016 issued by the Customs Department. As per this circular, the Nominating Agencies shall import gold/silver/platinum bars for supply to jewellery exporters and same shall be duty free on condition that the _____________ Page No.4/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 gold imported and distributed by nominating agency to the exporters should be exported as jewels without any deviation to the domestic market. The Nominating Agencies shall maintain accounts for the precious metal imported and shall discharge the liability of payment of duty in the event exporter not fulfilling his export obligation within the period prescribed under the Foreign Trade Policy.
3. Taking advantage of this circular, the petitioner/3rd Accused Shri.Santhosh Kothari, Proprietor of M/s.Shree Kalyan Jewellery had procured 218kgs in bullion from the Nominating Agency HDFC Bank with an undertaking that, he will export the jewellery made out of it. The money to procure the bullion by the 3rd accused was financed by Deepak G.Siroya (A1) who acted as master mind behind this illegality. After procuring bullion, fake jewellery made of copper/brass coated with gold covering were manufactured at Rajkot and Calcutta and exported by M/s.Sunil Jewellery a Proprietor concern of Sunil Parmar (A2). The cargo containing fake jewels were shipped under the Shipping Bill No.7862422 dated 31.01.2022 declaring that the said cargo contain 22 Carat plain gold jewellery. The consignment was stopped by the Customs Officials for weight discrepancies and they were detained and deposited in the Airports Authority of _____________ Page No.5/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 India for safe custody. The detailed examination of the Shipping Bill no.7862422 dated 31.01.2022 resulted in the recovery and seizure of 450 numbers of bangles which were found not to be 22 carat jewellery but to be gold coated copper bangles. The gold covered copper bangles were attempted to be smuggled out of India by mis-declaring it as 22 Carat plain gold jewellery. As per this shipping bill, 10.8 kgs of jewellery valued at Rs.4,56,39,360/- was to be exported. However, on verification of the goods and the document, it was found gross mis- declaration in terms of value. Hence, the goods were seized.
4. Similarly, Shri.Sunil Parmar/A2 had procured duty free gold bullion and had attempted to fulfil his export obligation under the cover of above shipping bill. In the course of investigation, Shri Santosh Kothari, Proprietor of M/s.Shree Kalyan Jewellery was found involved in the diversion of the duty free gold bars of foreign origin procured through HDFC Bank and getting the fake jewellery exported to comply with the provisions of the CBIC Circular No.27 of 2016-Cus dated 10.06.2016.
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5. The Santosh Kothari, Proprietor of M/s.Shree Kalyan Jewellery summoned on 02.02.2022 and his statement under Section 108 of Custom Act, 1962 was recorded. In his statement, he inter alia admitted to have conspired and colluded with Shri.Deepak Siroya of M/s.Siroya Jewellers and Shri.Sunil Parmar (A2) and he has obtained GSTIN, IEC, in the month of December 2020 in the name of M/s.Shree Kalyan Jewellery on the advice of Shri Sunil Parmar. Shri.Deepak Siroya arranged for Rs.1 crores in the bullion account of Santhosh Kothari (A3) maintained at HDFC Bank and with that money Santhosh Kothari purchased 2 kgs of Gold bullion from MMTC Limited and handed over it to Shri.Deepak Siroya. The bullions were diverted in the domestic market and accounted toward fake jewels exported. The sale proceeds of diverted gold bars in the domestic market sent to the consignees in Dubai through illegal channels, who have knowingly imported the fake jewels. The consignee received the money sent through non-banking sources will revert it back as deposit in the bank account of M/s.Kalyan Jewellery.
6. On receipt of the money, M/s.Kalyan Jewellery will approach HDFC Bank, the nominating agency for procuring the next consignment of duty _____________ Page No.7/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 free bullions. By this method, huge amount of loss to Government exchequer has been caused. The bullions imported and sold duty free instead of being exported as jewellery, had been diverted in the domestic market on cash basis. Therefore, after stumbling upon, fake jewellery (copper bangle with gold covering) at customs cargo area. Investigation was intensified and these petitioners were arrested for playing active role in the illegal diversion of duty free imported gold to the domestic market.
7. The Learned Counsel for the petitioners in the bail petitions states that the petitioners are traders in jewels. They import bullions and export jewellery made out of the bullion. The petitioner Deepak G.Siroya (A1) running a business in the name and style of M/s.Siroya Jewellers. For conduct of business, he has valid GST registration and he is in assess to income tax. His firm is also in favour with import and export of gold issued by the Zonal Director General of Foreign Trade. The petitioner conduct their business with due compliance of the statutory obligation casted on it. For the purpose of making jewellery, the petitioner firm purchased Gold bullion from the Bankers who are the Nominated Agencies as per the RBI and Central Government Guidelines. The purchase of gold bullion from _____________ Page No.8/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 the bankers were properly accounted. Their only customers is the M/s.Kanak Gold and Diamond LLC having their Office and place of business at Royal Diamond Building, No.105, Deira Gold Souq, Dubai, UAE. Their customer used to place orders for jewellery over phone and make advance payment into the account of the petitioner's firm. On receipt of the advance, from the customer at Dubai, the petitioner used to purchase gold bullions from the Nominating Agency namely HDFC Bank. After receipt of the gold bullions, same will be sent by courier under proper documentation to the job workers at Rajkot and Calcutta. The entire transaction of purchase and despatch of the bullions are duly reflected in the books of accounts maintained by the petitioner's firm.
8. The gold bullions sent to job workers at Rajkot and Calcultta to manufacture the jewels as per the requirement of their customers. After manufacturing as per the requirement, the manufactured jewels will be sent back to the place of business at Chennai. The jewels are exported under the supervision and approval of Customs Department.
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9. The export formalities are carried out through their customs Broker M/s.BSM Logistic. Customs Officials at cargo complex will appraise the jewels and only if satisfied with the documents, they will generate shipping bills and give LET export order. While so, the allegation of the DRI that only part of the gold bullions purchased from the Nominating Agency has been utilised in the exported jewellers is incorrect since every export been assessed and cleared by Customs Department and every ounce/gram of bullion purchased under documentation is exported in the form of jewellery. Only after satisfaction of the successful completion of exports, the bank release the margin money withheld by them. While so, the search and seizure operations alleged to have been conducted on 01.02.2022 and continued upto 03.02.2022, keeping the petitioner in confinement and obtaining statement by coercion have no evidentiary value.
10. In the bail petitions, it is alleged that the petitioners were arrested on 03.02.2022 after keeping them under custody for 3 days. The allegation of the respondent/Investigating Agency that the petitioners have exported fake jewellery by mis-declaring the same as gold jewellery with respect to the past consignment is not borne out of record and there is no substantive evidence to proved it except _____________ Page No.10/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 the retracting statement recorded from the petitioners are under duress.
11. In support of his argument, the Learned Counsel for the petitioners relied upon the following judgments:-
(i). Mr.Biharilal Singhal -vs- Union of India reported in (2010) 253 ELT 358.
(ii). Sanjay Chandra -vs- Central Bureau of Investigation reported in (2012) 1 SCC 40.
(iii). Govind Gopal Goyal -vs- State of Gujarat reported in 2018 (360) ELT 434 (Guj).
12.The Learned Special Public Prosecutor appearing for respondent/DRI would submit that the above submission of the petitioners that except the consignment which was detained and found to be fake jewellery, all other previous consignments, they exported are 22 Carat gold jewellery is utter falsehood. Also it is incorrect to say confession statement of the accused persons alone are the basis of the allegations against them. In fact, apart from the informations given by the petitioners during the course of investigation, one of the _____________ Page No.11/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 manufacturer at Rajkot was examined and his statement was recorded and it corroborates the inculpatory statements of the petitioners. The manufacturer admits that on the prescription of the accused persons, he has manufactured copper bangles coated with gold and the said jewellery are not 22 carat jewels. The purchase bills of copper alloy for mixing with gold were seized from the manufacturer and he has admitted that, each bangle contains 47.79 grams copper stuffed in gold tubes. The presence of 22 carat gold in these bangles will be around only 9 to 10 grams and remaining i.e., 37 to 38 grams will be copper. Further, the accused persons are given details about the distribution of the excess gold remain after manufacturing fake gold bangles were used to be diverted in the domestic market. Thus, the duty free bullion procured through Nominating Agency are not exported on conversions as jewels and they were substantially diverted to local market. The sale proceeds were clandestinely sent to Dubai, who in turn transferred the money through Bank as if it is the real consideration for fake jewels. Thus, the illegal diversion of custom free gold to domestic market has covered up through fake transactions. So far about 218 kgs of golds bars been procured by these three accused persons and documents were created as if 22 carat gold jewels were exported. The commission of crime has been committed by the _____________ Page No.12/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 petitioners in connivance with staff members of Customs Department. The information furnished by these petitioners during the interrogation in their voluntary statement about the local diversion are also under investigation. If these petitioners are released on bail, there is every possibility of destroying the evidence and will make the possibility to trace the chain of illegal diversion of custom duty free gold to the domestic market instead of exporting it to foreign.
13. The material placed before this Court reveals that the shipping bills dated 31.01.2022 mis-declaration cannot be the sole transaction of fake jewellery. So far several transactions nearly about 218 kgs of gold bars in total were procured without custom duty, had been accounted as if exported as jewellery through various shipping bills from 10.08.2021 to 31.01.2022.
14. The Learned Counsel for the petitioner would claim that the other shipping bills were genuine without any mis-declaration and they were found to be proper and allowed to be exported by the Custom Department. This Court is of the view that merely the Custom Department has cleared the goods it will not take away the cloud in those transactions, without interrogating the importer in Dubai _____________ Page No.13/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 from the petitioners during the relevant point of time. To verify whether the earlier consignments sent to the Dubai customer was really 22 carat gold jewels is subject matter of probe. Also it is necessary to probe into the mode of layering by which the money sent to Dubai Company through Non-Banking Source.
15. In the said factual background, the observation of the Bombay High Court in Biharilal Singhal case, which says “for the demand of the past imports revenue cannot withhold the current consignment and in the absence of any position action by issuing show cause notice” hence no relevancy, since it is not a case of action without show cause notice nor withholding of present consignment for recovery of old demand of duty in respect of goods already assessed and exported.
16. Similarly, in Sanjay Chandra case cited supra and Govind Gopal Goyal case cited supra, bail in these sorts of cases were dealt in terms of facts and circumstances of those cases and it is for the Courts to balance the Nations economic interest as against the individual personal liberty. Not in all cases, the period of incarceration alone matters, the stage of investigation, the ramification of _____________ Page No.14/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 the crime its network and the possibility of screening vital links, if the petitioners are let out on bail are the factors to be taken into consideration.
17. In the instant case, the release of petitioners on bail is not conducive for investigation and therefore, petition for bail is dismissed. Considering the ramification of the offence and the design conceived by the petitioners herein to evade custom duty, without any interference requires investigation. The release of these petitioners will lead to tampering the witnesses. Hence, these Criminal Original Petitions are dismissed.
28.03.2022
Index :Yes.
Internet :Yes.
Speaking order/Non Speaking order
bsm
To:-
1. The Additional Chief Metropolitan Magistrate, (E.O-1), Egmore, Chennai-8.
2. The Central Prison, Puzhal.
3. The Senior Intelligence Officer, Directorate of Revenue Intelligence, D/o.Revenue, Ministry of Finance, Government of India, Chennai Zonal Unit, No.27, G.N Chetty Road, T.Nagar, Chennai – 600 027.
4. The Section Officer, V.R.Section, High Court, Madras. _____________ Page No.15/16 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.5923, 5926, 5933 of 2022 Dr.G.JAYACHANDRAN,J.
bsm Pre-delivery common order made in Crl.O.P.Nos.5923, 5926, 5933 of 2022 28.03.2022 _____________ Page No.16/16 https://www.mhc.tn.gov.in/judis