Delhi District Court
M/S Navyug Industries vs Deputy Chief Controller Of Import & ... on 21 January, 2017
Case no.54982/2016
IN THE COURT OF SPECIAL JUDGE, CBI (P C Act)-06,
CENTRAL DISTRICT, TIS HAZARI, DELHI.
CA No. 54982/16
RC No. 8(s)/89 SPE/CBI/SI/IX
M/s Navyug Industries vs
Deputy Chief Controller of Export & Import.
1. M/s Navyug Industries .....Appellant
M-24, IndustrialArea, Jallandhar, Punjab.
2. Sh. Bhushan Kumar Dhawan
S/o Late Brij Mohan Dhawan
R/o 65, Guru Ram Das, Behind Verka Milk Plant,
By Pass, Jallandhar, Punjab
Versus
Deputy Chief Controller of Import & Export
Office of Jt. Chief Controller of Imports & Exports,
Ludhiana through CBI .....Respondent
Instituted on: 26th May 2016.
Argued on : 20th January 2017
Decided on : 21st January 2017
JUDGMENT
1. This appeal u/s 374(3)(a) of the Code of Criminal Procedure is directed against Judgment dated 21st July, 2016 and order on sentence dated 19th August 2016 passed by the Court of Ms. Vandana Jain, Learned Additional Chief Metropolitan Magistrate (ACMM)-02, (Central), Delhi in a case whereby accused Bhushan Kumar Dhawan, partner of M/s Navyug Industries has been convicted for the offence punishable u/s 5 of Import & Export (Control) Act 1947.
2. This court has heard submissions advanced by Sh. Manoranjan, Ld counsel appearing for the appellant and Sh. Naveen Giri, Ld Prosecutor 1 of 28 Case no.54982/2016 appearing for the State through CBI and has perused trial court record.
3. Criminal law set into motion in this case was by S. Raja Shekar, Deputy Chief Controller of Imports & Exports, office of the Joint Chief Controller of Imports & Exports, Ludhiana by filing a complaint (Ex.PW- 3/A) against M/s. Navyug Industries Pvt. Ltd. and it parnters Brij Mohan Dhawan and Bhushan Kumar Dhawan, cognizance was taken by learned trial court on 08.06.1991. That M/s Navyug Industries, Sanjay Gandhi Nagar, G.T. Road, Bye Pass, M-24, Industrial Area, Jalandhar, Punjab, is a partnership firm which came into existence on 09.03.1961 and carrying on business of manufacturing, sale and purchase of agricultural instruments and hand tools etc and new partnership deed was executed on 30.07.1980 between Brij Mohan Dhawan and his son Bhushan Kumar Dhawan both R/o EK-187, Phagwara, Jalandhar for manufacturing hand tools.
4. In the year 1985-86, accused persons allegedly entered into a criminal conspiracy with object to obtain duty free advance import license and to misutilize imported material by not fulfilling the obligation of the same. Further accused Bhushan Kumar Dhawan applied to office of Deputy Chief Controller of Imports & Export (hereinafter referred as Dy. CCI & E) vide his application on 25.06.1985 for grant of duty free advance import license for 750 Metric Tonnes of CRCA/MS Sheets for Rs. 27,00,000/- (Twenty Seven Lacs) alongwith necessary enclosures such as export performance certificate, chartered 2 of 28 Case no.54982/2016 engineer certificate, TR receipts and SSI certificate etc. Application was received in the office of Dy. CCI & E, Amritsar on 12.07.1985 and after processing the same and after clearance from advance license committee meeting no. 15/86 on 26.07.1985, Delhi issued import license no. P/L/3081211 dated 04.09.1985 for Rs 26,73,000/- for the import of 742.5 Metric Tonnes of CRCA/MS Sheets by Sh SP Chhibar, Assistant Chief Controller in the office of Dy. CCI & E, Amritsar in favour of M/s Navyug Industries, M-24, Industrial Area, Jallandhar alongwith Duty Exemption Entitlement Certificate (hereinafter referred as DEEC) book bearing no. 0119957 for imports and exports with the port of registration at Bombay. License was issued on export production programme on regular export basis without any export order as per para 49(2) of Appendix-19 of the Import Policy 1985 to 1988 in force at that time license was subject to mandatory conditions (i) that M/s Navyug Industries would export 675 Metric Tonnes of Metal Boxes, hand tools, ratched pipe dye, threadres took boxes, carpenter trisquare and builders hardware etc for a f.o.b. value of Rs. 40,50,000/- within a period of nine months from the date of clearance of the first consignment or 30 days after the date of clearance of the first consignment or which ever is earlier; (ii) that the goods imported vide this license shall be utilized in accordance with the provisions of the Export Notification dated 09.06.1978 and other conditions as per the conditions sheet. Accused Brij Mohan Dhawan and Bhushan Dhawan 3 of 28 Case no.54982/2016 opened a cash credit account no. 1202 on 06.06.1985 in Punjab National Bank, Industrial Area, Jallandhar and another current account no. 2404 on 20.06.1985 in the same branch M/s Navyug Industries opened yet another current account no. 203 in Punjab & Sind Bank, International Banking Division, Dilwada Building, Nariman Point, Bombay on 14.10.1985. Accused Brij Mohan Dhawan contacted one Rajesh Khanna, an import REP license dealer of Delhi who in turn, introduced him to BD Malvi, partner of M/s VK Enterprises, 85, Modi Street, Bombay (CHA) for importing material against the said license in 1985 from Hungary. Documents of the license in question were processed by M/s VK Enterprises on the license of 2 CHAs, one Vasudev Ranchhodds & Co., 366, Katha Bazar, Bombay and another Sakarchand G. Shah, 300, Shaheed Bhagat Singh Road, Bombay. Customs bills of entry no. 2868/88-89, 2868/90-91 and 663/39 were passed from customs house, Bombay. Declaration attached to the Customs purpose B.Es No. 2868/88-89 and 2868/90-91 bears the signature of accused Brij Mohan Dhawan.
5. Import was made by foreign supplier F.M. Noradin & Co. of Singapore on DP basis i.e. documents to be retired on payments through the account no. 203 of Punjab National Bank, Nariman Point, Bombay. Sh. B.D. Malvi after clearance of the imported goods against the license vide bill of entry no. 2868/88-89, 2868/90-91 and 663/39 from Bombay Customs and Bombay Port handed over the goods to Brij 4 of 28 Case no.54982/2016 Mohan Dhawan at Bombay itself and to this effect accused Brij Mohan Dhawan signed three challans for having received the imported goods of the license in question.
6. The clearance of the first consignment on 13.12.1985 shows that the export obligation period of the above license expired on 12.09.1986 i.e. nine months from the date of clearance of the first consignment. Brij Mohan Dhawan vide application dated 31.12.1986 submitted to the office of Dy. CC I & E, Amritsar for extension of the time to fulfill the export obligation. He confirmed complete importation of the raw material of the license in question. Application was rejected by the office of CC I & E, New Delhi. It is alleged that accused persons by not fulfilling the export obligation and by misutilizing the imported goods in contravention of the conditions of license had wasted the foreign exchange equivalent to Rs.26,73,000/- and caused a further loss to the exchequer from earning foreign exchange equivalent to Rs 40,50,000/- against exports as required under license. Accused allegedly earned illegal gains of Rs 32,65,410/- exempted from payment towards customs duty at the time of import.
7. It is further the case of prosecution that as per mandatory conditions of the license in question, M/s Navyug Industries did not fulfill the conditions relating to export obligation utilization of goods as per the license in question within stipulated period and M/s Navyug Industries was ultimately declared a defaulter on 04.12.1987 by the 5 of 28 Case no.54982/2016 office of Dy. CC I & E, Amritsar. Case was prosecuted by the CBI and 29 witnesses were examined by the prosecution during pre-charge evidence. Accused Brij Mohan Dhawan expired before charge on 13 th May 1994 and prosecution against him came to an end. On conclusion of pre-charge evidence, vide order dated 17.09.2001, learned trial court ordered framing of charges u/s 120B r/w 420 IPC and Section 5 of the Import and Export Act 1947. Appellant was given opportunity to cross- examine the witnesses. On 1st December 2004, prosecution evidence was closed and statement u/s 313 Cr.PC of Brij Mohan Dhawan was recorded on 06.06.2005. Accused examined three defence witnesses in his support.
8. Sh. Manoranjan, learned counsel appearing for the appellant submitted that letter dated 31st December 1986 (Ex.PW-5/E) seeking extension of export obligation was never put up by the concerned officials of the department of DGFT, Amritsar before the concerned Advance Licensing Committee (ALC). Secondly, presuming the said letter was put up before the committee, the result thereof was never communicated and served to the appellant/firm M/s Navyuk Industries. Sh. Manoranjan, Ld counsel for the appellant submits that under the Import and Export Control Act, 1947, time to time various export control order were issued and Export Import policy was being announced by the Government by means of public notices in the Gazette of India. Attention of the court was drawn towards Appendix 1A i.e. Import and 6 of 28 Case no.54982/2016 Export Control Act (Page 81) & Appendix 1C i.e. Export Control Order 1977, Government of India, Ministry of Commerce. He submits that Clause 12 of Appendix I C is as under:
"Licensee, etc. to be given opportunity of being heard:-
(1) No action shall be taken under clause 6 or sub-
clause (1) or under sub-clause (3) of clause 7 or clause 8 or sub-clause (1) of clause 11 against a license or exporter or any other person unless he has been given a reasonable opportunity of being heard. (2) where any person is aggrieved by any action taken under clause 7 or clause 8 or sub-clause (1) of clause 11 save in a case where the cancellation has been ordered under the provisio thereto he may prefer an appeal against such action to such authority, as the Central Government may by notification in the Official Gazette, constitute for the purpose of hearing appeals, within thirty days from the date of the communication of the action taken."
9. It is submitted that as per Section 3 of Import & Export (Control) Act, 1947 as amended up to 30th April 1979, Central Government may, by order published in the official Gazette, make provisions for prohibiting, restricting or otherwise controlling the import & export as specified in (a & b) of Section 3 (1) in all cases or in specified classes of cases subject to such exceptions, if any, as may be made by or under the order. In exercise of the power, conferred by Section 3, the Central Government made the order i.e. Export Control Order 1977, Government of India on 24th March 1977 and Clause 6 of Appendix 1 C reads as under:
"Amendment of License:- The licensing authority may on its own motion or on application by the license, amend any license granted under this Order in such manner as 7 of 28 Case no.54982/2016 may be necessary to make such license conform to the provisions of the Act or this Order or any other law the time being in force or to rectify any errors or omissions in the license.
Provided that the licensing authority may on request by the license amend the license in any manner consonant with the Export Trade Control Regulations."
10. It is argued that as per Import & Export policy (for the period April 1985 to March 1988) (as amended up to 31st October 1986) of the Government of India, Ministry of Commerce in Appendix 19 {clause 23 (2)}:-
"The Regional Advance Licensing Committee may consider, on merits, extension of export obligation for a period not exceeding three months. In the case of the export product Cassettes (Audio or video), however, no extension of export obligation will be granted beyond the three months referred to above. However, in exceptional cases for extenuating circumstances, the Advance Licensing Committee in the office of the CCI & E, New Delhi, may consider grant of further extension in export obligation period, in the merits of each such case"
11. It is submitted as per Section 4 (m) of the Import & Export Control Act (hereinafter referred to as IMPEX), firm M/s Navyuk Industries could have prefer an appeal within the prescribed period of 45 days from the date of the service of the order. Further, as per Export (Control) Order 1977, in clause 6, the licensing authority on an application by the licensee amend any license granted under this Act and as per clause 12, the licensee has to be given an opportunity of being heard and any person aggrieved by any action taken under clause 7 or 8 may prefer an appeal within 30 days from the date of the communication of the 8 of 28 Case no.54982/2016 action taken. It is argued that since the said order was never served upon the firm/appellant, therefore, his right to file the appeal subsist and hence is right to file an appeal is subsist, no complaint could have been filed by the DGFT against him u/s 5 of IMPEX and Ld trial court could not have taken cognizance of the alleged offence. Ld counsel argued that in this regard, PW-3 S. Raja Shekhar, complainant during his cross-examination admitted suggestion that complaint was premature without communicating the facts of rejection of request of the party for extension of time. In support, Ld counsel relied upon a case reported as State of Kerela vs C.A. Jabbar1.
12. The case of the appellant is that the applications were never put up by the concerned official of Dy Chief Controller, DGFT, Amritsar and DGFT, Delhi before the Advance Licensing Committee (ALC) or that assuming, though not admitting that in case these two applications had been put up before the ALC, then at no point of time the fate of these two applications was informed to the appellant or that he had the right to move applications for extension and to seek change in condition of license. Ld counsel for the appellant submitted that the appellant has not been given any personal hearing on his aforementioned two applications dated 31st December 1986 and 25th July 1987. Sh. Manoranjan, Ld counsel appearing for the appellant submitted that letter dated 25th July 1987 (Ex.PW-5/G) was written to Export 1 2009(2) LRC 510 (SC) 9 of 28 Case no.54982/2016 Commissioner, Office of CCI & E, Udhyog Bhawan, New Delhi. Case of the appellant is that the said letter was not considered or put up before the concerned authority for grant of extension in the export obligation period and change in the description of export products pertaining to advance license no. P/L/3081211 dated 4 th November 1985 and further reference/duty/526/4/AN-86/EP-11. It was pointed out that in the said letter a request for change of export items and that the basic raw material which was procured for the manufacturing of original export products was the same as export products that proposed to be supplied and in the weight of export product to be supplied 44.748 metric ton.
13. Ld counsel for the appellant argued that the second request could have been made as per the foreign policy. Even as per the documents which were referred i.e. clause 4.22.1 of BTP, Foreign Trade Policy note book of procedures 2006-07, when it was pointed out by the court that the said policy pertains to the year 2006-07. Ld counsel had shown import and export policy of the period April 1985 till March 1988. As per the referred clause 23(2) of Export Obligation, Regnant Advance License Committee might consider on merit extension of export obligation for period not exceeding three months and that normally the extension period could not be extended beyond three months and however in exceptional cases for extenuating circumstances ALC might consider further extension on the merits of each case.
14. On behalf of appellant, it was pointed out that as per the note 10 of 28 Case no.54982/2016 sheet of Export Commissioner of the office of CCI & E, Udhyog Bhawan, New Delhi that more than 5 ½ years have passed but action has been taken on the letter dated 25 th July 1987 from the export commissioner and the submission advanced by Ld counsel for appellant was that till the time the said application submitted on behalf of appellant, had been rejected, he could not have been prosecuted. Ld counsel argued that as long as the appellant has not been served order on the said two applications and in case those were rejected, the rejection order ought to have been served communicated to the appellant and his right to appeal survives and as long as the appellant does not exhaust his remedies available under the Impex Act or the Export (Control) Order, the DGFT could not have filed the complaint before the Ld Magistrate and the Ld Magistrate could not have taken any cognizance to this effect. Complainant himself during his cross-examination has admitted that as long as the remedies are available with the licensee under the Impex Act, no complaint could be filed and if file, the same would be pre-mature.
15. Next point raised by Ld counsel for appellant is that the import license had been granted to appellant firm not against any standing state order but on the basis of his past performance. In the complaint filed by DCCIE in Para 5, it is mentioned that the license was issued on export production program on regular export basis without any export order as per para-4 (2) on the Appendix 19 of the import policy 1985 to 11 of 28 Case no.54982/2016 1988 which was in forced and the said license was subject to the mandatory conditions:- (1) that M/s Navyug Industries would export 675 Mts of Metal boxes, hand tools, Ratched Pipe dye, threadres tool boxes, carpenter trisquare and builders hardware etc for F.O.B value of Rs.40,50,000/- within a period of 9 months from the date of clearance of the first consignment or 30 days after date of clearance of the first consignment or whichever is earlier and (2) that the goods imported vide this license shall be utilized in accordance with the provisions of Export Notification dated 9th June 1978 and other conditions as per the conditions sheet attached.
16. Ld counsel submitted that in the year 1985 when the import license had been granted to the appellant firm, due to terrorist activities in Punjab, the visiting importers stopped visiting Punjab due to which appellant was unable to obtain export orders. Ld counsel submitted that there is no dispute as regards the fact noted in Para 10 & 11 in the complaint that bundles of CRCA sheets in the year 1985-86 were imported after obtaining import license and import were cleared from the Bombay Port. It is pointed out that it is a matter of common knowledge that CRCA sheets made of iron and were subjected to rust/corrosion and appellant had taken loan from the bank in order to import CRCA sheets and had to repay the bank's money and since goods which were to be exported using CRCA sheets could not be exported due to rust of CRCA sheets and as bank amount had to be 12 of 28 Case no.54982/2016 repaid, therefore, appellant was left no option but to sell CRCA sheets after manufacturing certain items i.e. Tasla etc and said goods were sold through bills/vouchers in the year 1985-86. On asking, Ld counsel appearing for the appellant submits that he is not disputing about the issuance of the import license and conditions thereto about fulfillment of export obligations and for exporting 675 Mts of its specified items having FOB value of Rs.40,50,000/-. In support of his submission that a person concerned could not exercise the right of review unless the order was communicated or known to him either actual or constructively, Ld counsel relied upon State of Kerela vs C.A. Jabbar 2 and D. Sai Baba vs Bar Counsel of India and others3.
17. This court finds no merit in the aforenoted contention of the appellant. Admittedly, nine months time was granted to the appellant to fulfill export obligations as per the license dated 4 th September 1985 (Ex.PW-5/B) as well as legal undertaking LUT (Ex.PW-5/D) and the first consignment of import of CRCA sheets had been received by the appellant on 13th December 1985. Nine months period had to be reckoned from the said date and requisite period of fulfillment of export obligations expired on 12th September 1986. The case of the appellant is that he had sought extension of time for fulfilling export obligation through letter dated 31st December 1986 (Ex.PW-10/E) and letter dated 2 (2009)(2) LRC 510 (SC) 3 (WPC) 528/02 decided on 6th May 2003.
13 of 28 Case no.54982/2016 25th July 1987 (Ex.PW-5/G). In the first letter dated 31 st December 1986 (Ex.PW-10/E), request for extension of fulfillment of export obligation was sought on the ground that due to recession in the foreign market, exporter could not be found out and they were trying in the other foreign market and negotiations are in progress and were confident that soon they shall get orders for those items. It is significant to note that in the present case, the first application dated 31 st December 1986 itself was moved more than three months after the expiry of export obligation on 5th September 1986, therefore, there was no question of further extension and even the said application dated 31 st December 1986, as noted above had been considered and rejected by the ALC.
18. In the second letter dated 25th July 1987 (Ex.PW-5/G), extension had been sought for change of item to Mudguards, Rims, Cycle Frames, Full Chain Covers, Hubs etc. It is also written in the letter that basic raw material namely CRCA sheets which was procured for the manufacturing of original export products, is the same for the export product now proposed to be supplied.
19. By the same note sheets vide which previous application dated 31 st December 1986 seeking extension of export obligation period had been rejected by the committee and which was shown by the Ld counsel for appellant dated 26th May 1987, the case had been forwarded to the ECA Section for necessary action in view of the decision of the ALC and a show cause notice was ordered to be issued to the said form and vide 14 of 28 Case no.54982/2016 order dated 20th July 1987, show cause notice had been put up for approval. Further notes S. No. 18 shows that a letter dated 1st October 1987 had also been received from the Bombay custom for the form asking them to pay custom duty of Rs.32,90,410.80 within 50 days. It may also to be noted that said fact about 3 ½ months having passed was noted by office of DCCI & E with a copy of the letter dated 25 th July 1987 had also been sent to DCCI & E, Amritsar (Ex.PW-10/F). It was further noted therein that since ALC had already rejected, the firm's request for extension in the EO period as per their decision posted at P No. 10 and the office of DCCI & E had also issued show cause notice to the firm to which they had stated that they had further requested Export Commissioner (EC) for extension under the EC period and that it was proposed to give a list of defaulter to the firm within 15 days time to either get the decision of their case from the EC or pay the custom duty with interest failing which they will be declared defaulter. This was done on 10th November 1987 and again time was granted to the party (M/s Navyug Industries) to submit document in terms of the trade notice and that if no reply was received within the said period it was ordered that letter declaring the firm as defaulter to be pup up.
20. It is pertinent to observe that further note (Ex.PW-5/I) exists in the record with reference to the letter dated 2nd December 1987 from the firm and reply to the notice dated 10th November 1987 and the firm had stated that they had requested for change in the description of export 15 of 28 Case no.54982/2016 produced from hand tools etc to cycle parts for extension in the EO period. It was observed that firm which was manufacturer of cycle part and moreover the export obligation period on export more than one year back i.e. on 5th September 1986. Therefore, the firm was declared defaulter. The contention of the appellant that the office of DCCI & E, Amritsar could not have declared the appellant as defaulter has no merits. In view of the facts noted above, once a committee had rejected the request for extension of export obligation period, this court finds no merit in the contention of Ld counsel for appellant that on filing obligation that too on receipt of show cause notice when he was about to be declared defaulter and was asked to pay duty in the custom department, the period again extended. It has already been noted above that nine months period was lapsed on 5th September 1986, even the first application dated 31st December 1986 was filed about four months later to the expiry of the said period. Material on record establishes that the said application had been rejected by the licensing committee and belatedly after period of about seven months thereafter by filing another application for extension of time, the appellant cannot be allowed to make a mockery of the terms and conditions by disobeying and flouting the declaration made by him in the application (Ex.PW-6/A) for obtaining Advance Import License, hence the contention raised by Ld counsel for the appellant in this regard is rejected.
21. As per case of prosecution as mentioned in Para 14 of the 16 of 28 Case no.54982/2016 complaint, the first consignment had been cleared on 13 th December 1985. There is not dispute raised by the appellant in this regard also. Therefore, admittedly period for fulfilling export obligation had expired on 12th September 1986. As per Para 14 of the complaint, accused Brij Mohan Dhawan (Since deceased) partner of M/s Navyug Industries had filed an application dated 31st December 1986 to the office of DCCIE, Amritsar for extension of time to fulfill export obligation and in the said application, B.M. Dhawan had confirmed the complete importation of material of the license in question and application for seeking extension of time for fulfilling export obligation was rejected by the office of DCCIE, New Delhi as per case of prosecution as set out in Para 14 of the complaint. Case of prosecution is that the licensee i.e. appellant was in no circumstances authorized to sell or dispose off the imported material except with the prior written permission of the licensing authority. Admittedly, no such written permission had been granted by the licensing authority/office of the DCCIE, Amritsar till date.
22. Case of appellant is that prosecution has failed to establish any material on record to show that his application dated 31 st December 1986 for seeking extension of time for fulfilling export obligation had been placed before the Advance Licensing Committee (ALC) and secondly assuming his application was considered and rejected by ALC, even in that case he was not informed and served with the order of the competent authority about the rejection of his application.
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23. In his deposition, S P Chibbar (PW-5) posted as Chief Controller in the office of JCCIE, Amritsar, during period 1983 to 1988, testified that M/s Navyug Industries had applied for grant of import license and said application was received in their office for Forwarding Committee, Head Office, New Delhi for forwarding Advance License Committee. Committee approved and forwarded minutes of their office for issuance of import license and the license (Ex.PW-5/B) which was issued, bears his signatures alongwith license condition and DEC Book (Ex.PW-5/C) bears his signatures. He further deposed that as per condition sheet framed included legal agreement for 36, 57, 500 (Ex.PW-5/D) bearing his signatures which was accepted and as per condition sheet, the export obligation expired on 12th September 1986 i.e. after nine months of date of import of first consignment of the goods and that party did not fulfill its export obligations and the party sent letter (Ex.PW-5/E) (i.e. letter dated 31st December 1986 Ex.PW-10/E). It is submitted that letter was forwarded to the HO for action at their end and that party was directed vide letter (Ex.PW-5/F) to deposit amount as they were declared defaulter.
24. In the letter/request for extension of time in fulfilling export obligation (Ex.PW-10/E), it is merely stated that the license was issued on production program basis and they are trying their best to boost up export of the production and they could not be able to get export order and are now trying in other foreign market and negotiation are in 18 of 28 Case no.54982/2016 progress or are confident that soon they shall get order in those items. In the mean time to extend for 12 months to enable them to fulfill their export obligation. It is clear that this letter dated 31 st December 1986 neither mentions about the terrorist activities nor about the rust of the CRC sheets as submitted before this court which were imported pursuant to the grant of the import license to M/s Navyug Industries. These grounds are not only after thought and improvement and are also not established by appellant.
25. Perusal of record shows that during cross examination, S.P. Chibbar (PW-5) on asking specifically testified that the rejection of the request for extension was intimated to the accused form vide letter dated 14th January 1987 at page 42 of the licensing file and the said letter bears his signatures and is (Ex.PW-5/D1). The said letter dated 14th January 1987 is on record addressed to the appellant firm which mentions that letter dated 31st December 1986 request for extension of the export obligation period was further considered by the JCCIE, New Delhi. (RALC) in terms of Para 23 of Appendix 19 of import policy 1985- 88 and as they failed to fulfill the export obligation within time post obligation period, they were advised to pay custom duty plus 18% interest to the custom and submit documentary evidence to that effect to the office. Ex.PW-5/K is the note sheet which mentions that "Case No. 10 M/s Navyug Industries". Which notes that committee rejected the request for extension of EO (Export Obligation) and decided that the 19 of 28 Case no.54982/2016 case may be handed over to the ECA Division for further necessary action. During pre-summoning evidence on 14 th July 1997, in response to the suggestion given by the Ld counsel for the accused, PW-5 admitted Ex.PW-5/K that the committee had rejected the request. PW-5, in response to the suggestion given by the counsel for accused, denied that extension letter dated 31st December 1986 was considered and rejected by Advance License Committee and that information regarding the rejection of the letter was given to the accused.
26. Raja Shekhar (PW-3) who was Deputy Director General, Foreign Trade in Ludhiana and had filed a complaint against appellant firm M/s Navyug Industries as well as against B.M. Dhawan and Bhushan Kumar Dhawan identified signatures Ex.PW-3/A and testified that he was authorized to file complaint under Import and Export Act, 1947. Court has to peruse the material on record as a whole. An opinion of a witness whereby he agrees generally that if a complaint filed without communicating the facts of rejection to the party for extension of time shall be pre-mature will not perse have the effect of discarding the overwhelming incriminating evidence on record against appellant. PW-3 during his cross examination was shown minutes of the meeting of Advance License Committee to the effect that letter dated 31 st December 1986 had been considered and rejected by the Advance Licensing Committee and he testified that the minutes of the meeting of the Committee were signed. Thus, it stands established that 20 of 28 Case no.54982/2016 appellant had failed to fulfill the export obligations within stipulated period of nine months time and he had chosen to file application for extension belatedly. After his first application for extension was rejected and show cause notice had been issued for declaring him defaulter and deposit of custom duty, thereafter, at that stage, he choose to file another application whereas, much before he had already sold the imported goods in the market. Thus, this court finds no merits in the arguments advanced by Ld counsel for the appellant.
27. Next point raised by the counsel for appellant was that the Ld ACMM, Delhi has no territorial jurisdiction to try this case as in the present case, factory of the appellant M/s Navyug Industries was situated at Jalandhar and its partners were residing at Jalandhar and goods were imported at Jalandhar. It is submitted that appellant firm had applied for obtaining import license at Amritsar Office of Joint Chief Controller of Import and Export (JCCIE) pursuant to obtaining import license and had been communicating for the issuance of the license from Amritsar Office. Imported goods were received from Bombay from where they were received at Jalandhar Factory of the appellant and were allegedly sold by the appellant at Jalandhar. It is submitted that therefore, alleged offence i.e. not fulfilling the export obligations to the tune of Rs.40,50,000/- for importing the material against the licnese in question and entering into the conspiracy, was committed at Jalandhar and not at Delhi.
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28. Import license had been issued by the Chief Controller Import and Export, New Delhi from New Delhi and secondly, Advance Licensing Committee (ALC) which granted the license to appellant firm had considered request for extension of period for fulfilling export obligation period from New Delhi.
29. This issue was correctly and properly dealt with by the Ld Trial Court in Para-56 of the impugned order which reads as under:-
"Now, coming to the jurisdiction part, it is true that accused persons applied for advance license at Amritsar before Dy.CC I & E. It is also true that goods landed at Bombay port and manufacturing was done at Jallandhar. At the same time, it is also a matter of record that though accused persons applied for advance license at Amritsar but the issuance of same was sanctioned by Advanced Licensing Committee (ALC) which was based in Delhi and consequently as instructed, the Amritsar authority granted the license. Moreover, the letter for extension were written by accused on 17.01.1987 and 25.07.1987 to Chief Controller, Import & Export, New Delhi and Export Commissioner, New Delhi. Accused cannot be allowed to blow hot and cold at the same time as per his convenience. Therefore, this court has jurisdiction to entertain the same."
30. Moreover, as per Section 462 IPC, if the proceedings had been conducted at a wrong place or in the local area, then no finding sentence or order of any criminal court shall be set aside merely on that ground unless it appears to the appellate court that such error has occasioned in failure of justice. On asking, as to what failure of justice had been occasioned, Sh. Manoranjan, Ld counsel appearing for the appellant submitted that the failure of justice in this case was that 22 of 28 Case no.54982/2016 appellant had to come from Jalandhar to Delhi for the long more than 25 years and secondly he submits that he could not produce all the defence witnesses who were resident of Jalandhar and could have deposed in favour of appellant and that the trial might have ended earlier 3-4 years being a small place and having fewer cases in the Jalandhar Court and that justice delayed is justice denied. This court finds no merit in the submission advanced by Ld counsel for appellant.
31. Next ground raised by the Ld Counsel for appellant was that it was Brij Mohan Dhawan, partner (since deceased) who was managing the affairs of the firm M/s Navyug Industries and Bhushan Kumar Dhawan other partner who has been convicted by the Ld trial court was the sleeping parnter and had nothing to do with the affairs of the firm. It is submitted that therefore, Bhushan Kumar Dhawan cannot be held vicariously criminally liable for the acts of the firm and that of other partner Brij Mohan Dhawan (since deceased) who was his father. Sh. Manoranjan, Ld counsel further urged that the imported goods were personally received by Late Sh. Brij Mohan Dhawan, other partner of M/s Navyug Industries and that before importing of the goods, a legal undertaking was furnished by Late Sh. Brij Mohan Dhawan and that he only used to sign the bills and the vouchers for sale of the imported goods and Late Brij Mohan Dhawan had sought extension of the EO Period from the Office of CCI & E. It is further submitted that no witness had stated that they had seen appellant B.K. Dhawan as participating 23 of 28 Case no.54982/2016 actively in the affairs of the firm. It is submitted that signing of two documents i.e. applying for obtaining advance import license and opening of the bank account were a mere formality being a partner and it had to do nothing with the running of the business. Ld defence counsel had referred Shyam Sunder and Ors. Vs State of Haryana Crl. Appeal 524/89 decided on 21st August 1989.
32. In this regard, Ld Prosecutor submitted that signing of two documents i.e. applying for obtaining advance import license and opening of the bank account cannot be considered as a mere formality being a partner and that it is not acceptable that Sh. B.K. Dhawan had to do nothing with the running of the business. It is submitted that signing of a document containing declaration shows that he is participating in the affairs of the business.
33. It is pertinent to note that DW-1 Petrus produced by the appellant himself had deposed that he had not seen officially as to who was to look after the work of M/s Navyug Industries. DW-2 Ashok Kumar also testified that when Sh. Brij Mohan Dhawan died, he used to go to M/s Navyug Industries and used to do job work for M/s Navyug Industries and used to deal only with Sh. Brij Mohan Dhawan and had worked with them till Brij Mohan Dhawan died in 1992. DW-3, Mukesh Dhawan, son of Brij Mohan Dhawan, merely stated that Bhushan Kumar Dhawan used to help him in his work. He could not produce any documentary evidence regarding working of B.K. Dhawan with him during 1983 till 24 of 28 Case no.54982/2016 1990. This evidence of defence witnesses does not helps the case of the accused to establish that the appellant had no connection with the affairs of the partnership firm.
34. Observations made in the Shyam Sunder's case (supra) referred by Ld counsel have been quoted by Ld trial court in Para-51 of the impugned order and in Para 55 thereof, Ld trial court rightly observed that the Judgments referred i.e. Shyam Sunder & Ors vs State of Haryana and Ors., and other judgments relied upon by the counsel for accused are not applicable to the facts of the present case and by no stretch of imagination, accused Bhushan Kumar Dhawan could be stated to be a sleeping partner. No dispute was raised by Ld counsel for appellant that Brij Mohan Dhawan (since deceased) and Bhushan Kumar Dhawan, appellant were partner of M/s Navyug Industries.
35. Indisputably, Bhushan Kumar Dhawan, appellant had signed the application for obtaining advance license. Perusal of Ex.PW-6/A, Form of application of advance license shows that name of Bhushan Kumar Dhawan has been mentioned in Block Letters as partner and above the same it bears signatures. Sh. Manoranjan, Ld counsel for appellant has not disputed that the application for obtaining advance license was moved by Bhushan Kumar Dhawan. The fact that application Ex.PW-6/A bears signatures of accused Bhushan Kumar Dhawan indicates clearly that he was actively involved in the process of getting license and therefore, he was obliged to comply with the condition of grant of 25 of 28 Case no.54982/2016 license. It is crucial to note that Para-5 of the application (Ex.PW-6/A) under the title declaration notes whereby Bhushan Kumar Dhawan declared that if the license is granted, same will be utilized only for the consumption of raw material in the factory of the manufacturer and that no portion thereof will be sold or permitted to be used by any other party and state is true and correct and he fully understand that in case any license is granted on the basis of his statement was liable to be cancellation in addition to any penalty that the Government may impose or any other action may be taken and he further declare that the order/contract has been secured for the supply of products mentioned in the application.
36. Further more, the account opening form dated 14th October 1985 (Ex.PW-8/A) has been proved by PW-8, Upkar Singh, Manager, Punjab & Sindh Bank, who testified that account was opened by Bhushan Kumar Dhawan under his signatures and the account was in the name of M/s Navyug Industries opened on 14th October 1985 in the Bombay Branch. He identified signatures of Kuldeep Singh, General Manager. There is nothing in cross examination to impeach veracity. The signatures of Bhushan Kumar Dhawan on Ex.PW-8/A, Account opening form is not disputed by Ld counsel. Ld trial court observed that in view of the signatures of accused Bhushan Kumar Dhawan on application for grant of license and Ex.PW-8/A clearly shows that he was very much involved in the business of export carried out by M/s Navyug Industries and was 26 of 28 Case no.54982/2016 very much responsible for obtaining advance license and was active partner of firm.
37. In his deposition, PW-29 Anil Kumar who was doing the casting job in the name of M/s Satyam Foundry at Jallandhar, has categorically stated that he had purchased Taslas etc out of the CRC sheets from M/s Navyug Industries vide (Ex.PW-15/9 to Ex.PW-15/15) and had issued ST- 22 forms (Ex.PW-15/16, Ex.PW-15/18 to Ex.PW-15/22) in respect of those invoices. Thus, the imported goods were sold in the local market. This fact has not been disputed in the cross examination. Appellant had clearly violated the terms of legal undertaking (Ex.PW-5/D) showing that accused persons sold the goods manufactured out of CRC sheets (the goods which were imported) in June 1985 itself i.e. before the period of fulfilling of export obligation expired which clearly shows their intention of not exporting the goods which is in violation of undertaking given in (Ex.PW-5/D). It stands proved beyond reasonable doubt that appellant violated the terms and conditions of declaration of Advance Export License (Ex.PW-6/A) executed by him on behalf of M/s Navyug Industries in which he was also a partner by not fulfilling the export obligation. He had already sold finished products made out of raw material which was imported i.e. CRC sheets in the local market against letter of undertaking (Ex.PW-5/D). Guilt of accused Bhushan Kumar Dhawan u/s 5 of Import & Exports (Control) Act 1947 has been proved beyond reasonable doubt.
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38. Having regard to the totality of aforenoted evidence on record, this court finds no merits in the appeal and no illegality, procedural irregularity and impropriety in the impugned order whereby appellant Bhushan Kumar Dhawan was convicted for the offence punishable u/s 5 of Import & Exports (Control) Act 1947. Therefore, no interference is warranted in the Judgment. Ld trial court has already taken a lenient view by ordering to release the accused (appellant herein) on probation. In the present case, appellant has allegedly not paid the custom duty to the tune of Rs.32.9 lacs due to the Government, in the year 1987. The said amount stands unpaid even after 30 years. The direction to the accused (appellant herein) to pay a compensation amount of Rs.27,30,000/- does not requires any interference having regard to the totality of facts and circumstances of the case. As prayed by Ld counsel for Appellant, he is granted four week's time to deposit the amount of compensation in the trial court failing which Ld trial court shall take necessary steps for recovery of amount of compensation as per the provisions of Section 421 CrPC and appellant shall be liable to suffer simple imprisonment for a period of six months in default. In the result, this appeal merits dismissal. Order accordingly. Copy of this order to the Learned Trial Court. Appeal File be consigned to record room.
Announced in the open court
on 21st January 2017 VINAY KUMAR KHANNA
Special Judge-CBI (PC Act)-06
THC/Delhi/21.01.2017
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