Delhi District Court
Directorate Of Revenue Intelligence vs ) M/S Kan Karan Impex on 7 December, 2015
IN THE COURT OF SH. REETESH SINGH, ASJ-02/FTC
NEW DELHI DISTRICT PATIALA HOUSE COURTS, DELHI
Crl. Revision No. 78 of 2014
I.D. No 02403R01731129014
Directorate of Revenue Intelligence
I.P. Bhavan, I.P. Estate,
New Delhi
Through
Intelligence Officer
.......Petitioner
Versus
1) M/s Kan Karan Impex
27, Sri Ram Road,
Civil Lines, Delhi.
2) Arti Chauhan
Wife of Shri Balbir Singh Chauhan,
Resident of 3, Club House,
Oberoi Apartments,
Sham Nath Marg, Delhi.
3) Avtar Singh Chauhan
Son of Late Sh. Iqbal Singh Chauhan,
Resident of B-270, Derawal Nagar,
Delhi.
4) Surender Chauhan
Son of Shri D.R. Chauhan,
Resident of 1654, Officers Flats,
Gulabi Bagh, Delhi.
5) Balbir Singh Chauhan
Resident of 3, Club House,
Oberoi Apartments,
Sham Nath Marg, Delhi.
......... Respondents
Date of institution of the revision petition : 01.10.2014
Date of reservation of orders : 02.12.2015
Date of announcement of orders : 07.12.2015
ORDER
DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 1/91. This revision petition has been filed by the Directorate of Revenue Intelligence (DRI) against the impugned order dated 08.03.2010 by which the Ld. Trial Court discharged the respondents for the offences punishable under Sections 132 and 135 (1) (a) of the Customs Act, 1962. The order of discharge was made on the grounds that the sanction order for their prosecution had not been duly proved and also for the reason that the goods to be exported had been checked by the concerned customs officials prior export and found to be in order.
2. The proceedings before the Ld. Trial Court arose out of a complaint under Section 200 of the Cr.P.C. filed by the petitioner DRI in the Trial Court on or about 28.08.1998. The gist of the complaint is that a specific information was collected by the DRI to the effect that the respondent no.1 had fraudulently claimed and huge amounts of duty drawback. The modus operandi adopted was to export rejected / cheap / junk / non-functional semi-conductor devices at inflated prices in the guise of semi-conductor devices / Power Transistors which fell under item nos. 4724-C and 4724-D of the Duty Drawback Scheme as it then existed. Search of the business premises of the respondent no.1 was conducted on 24.06.1995 in the presence of the respondent no.4. Documents in respect of the information received were recovered and seized. The respondent no.4 was the Senior Manager (Export) of the respondent no.1 whose statement was recorded on 24.06.1995 in which he disclosed that the respondent no.1 had exported six consignments of Power Transistors and claimed duty drawback of Rs.18,25,000/- in the last two months (since 24.06.1995). Further statement of the respondent no.4 was recorded on 26.06.1995 in which he disclosed that these six consignments of Power Transistors were exported against purchase order dated 01.03.1995 by M/s Aviazapchast, Russia. Representative of the said Russian firm including one of Victor Konorov had come to New Delhi to whom samples of Power Transistors were shown and deal was settled for supply of 6,55,738 pieces of Power Transistors @ Rs.6.10 per piece. The respondent no.4 further disclosed that the confirmation of the purchase order for export was received by the respondent no.1 through a fax message dated 01.03.1995 from the Russian buyer and that the contract number appended to the invoice and DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 2/9packing lists of the exported consignment of Power Transistors was IN/16/9/94 dated 16.09.1994. The respondent no.4 stated that the Russian buyer had already opened a Letter of Credit (LoC) and this contract was transferred to the respondent no.1. The respondent no.4 further disclosed that local purchases of the exported Power Transistors were made from one M/s Nishant Electronics at Karol Bagh, New Delhi from whom total of 6,60,000 pieces were purchased vide various invoices / bills. The Power Transistors were supplied by M/s Nishant Electronics at the premises of the respondent no.1 to whom payment of Rs.35,00,000/- had been made. Out of the 6,60,000 pieces of Power Transistors purchased, export was made of 6,55,738 pieces vide various bills all dated 27.03.1995 and the shipments were executed through the Air Cargo Unit of IGI Airport, New Delhi. Remittances of the export consignments were received by way of LoC of sight by the banker of the respondent no.1.
3. It is stated that in the complaint that officials of M/s Nishant Electronics were summoned during investigation. Yashpal Sarsoniya gave a statement as per which he denied knowledge of the respondent no.4. In respect of the bills dated 27.03.1995 drawn by M/s Nishant Electronics in the name of M/s Kan Karan Impex (respondent no.1) he stated that the bills were made in the name of the respondent no.1 in good faith at the instance of one Mr. Wadhwa but no goods were sold against those bills. Notice was issued to S.K. Wadhwa, Director of M/s Aman Semi Conductor Pvt. Ltd. who in his statement denied any knowledge of respondent no.4 but admitted that he knew Yashpal Sarsoniya. S.K. Wadhwa stated that he knew the respondent no.5 and said that the respondent no.5 required some bills of Power Transistors for making some exports from the respondent no.1 and he therefore introduced the respondent no.5 to Yashpal Sarsoniya of M/s Nishant Electronics. S.K. Wadhwa denied having knowledge of source of procurement of the exported items.
4. During further investigation, the cheques through which payments were made by respondent no.1 to M/s Nishant Electronics were verified. Yashpal Sarsoniya stated that bills were raised by him against the respondent no.1 and to DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 3/9make 'account adjustment' cheques were received but no transaction of any goods take place in respect of the adjustment. Yashpal Sarsoniya further stated that whatever amount he received through cheques had been returned to the respondent no.5.
5. As per the complainant, the triplicate copies of the green shipping bills of the export consignment were collected from the Customs House as per which export took place from Air Cargo, IGI Airport, New Delhi. The documents described the exported goods as "ELECTRONIC POWER TRANSISTORS". The bills did not mention the brand name or serial numbers of the articles or material used i.e. plastic or non-plastic. Verifications were sought from M/s Aviazapchast, Russia through the Russian Enforcement Department. The said Department revealed that the contract number IN/16/9/14 was between M/s Aviazapchast and M/s Safetag International Pvt. Ltd. which was in respect of 13 items which did not include power transistors. It was further revealed that several Companies were suppliers of the goods under the said contract between M/s Aviazapchast and M/s Safetag International Pvt. Ltd. which included the respondent no.1 M/s Kan Karan Impex.
6. As per the complaint, the export consignment of the respondent no.1 was transported from New Delhi to Moscow through M/s SAM Aviation (P) Ltd. The Director of the said company was examined who stated that goods under six Air Way bills had been transported by them after the respondent no.1 had approached them for this purpose. These articles were transported to Moscow by the said company but upon arrival at Moscow, no further instructions were given to the Transported company by the respondent no.1. He further disclosed that goods were ultimately taken over by M/s Safetag International Pvt. Ltd., Moscow.
7. Inquiries were conducted from the office of Additional Commissioner of Customs, Air Cargo Unit, IGI Airport, New Delhi from which it came to light that no samples were drawn for test purposes in respect of six consignments DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 4/9exported by the respondent no.1. Opinion of Scientists from Department of Electronics, Government of India, New Delhi was taken as per which identification of exported articles was not possible by visual examination. Statements of R.D. Meena, Inspector Customs who had inspected the goods and M.P. Taneja, Superintendent Customs who had also examined the goods before being cleared for export were recorded. They stated that in the export shed warehouse, the Custom House Agents or its employees bring the processed shipping bills after the entering bills in the warehouse register. The shipping bills are presented to the Superintendent Incharge who marks them to the concerned Inspector for confirmation. The Inspector opens the packages in the presence of Custom House Agents and Superintendent and after examining the contents, an examination report is made on the duplicate and triplicate copy of the shipping bills is countersigned by the Superintendent Incharge and finalized. They further sated that once the "let export order" was issued by the Superintendent, the shipping bill was handed over to the agent who gives the goods in the custody of IAAI and shipping bills to the Airlines. The stated that 5% of the packages are examined subject to a minimum of two packages.
8. In respect of the goods exported by the respondent no.1, they stated that the goods were examined by the examination officer on the basis of experience / understanding and also in consultation with their superiors. No instructions existed regarding drawal of samples in respect of export of power transistors and inspection was carried out purely by visual examination and appearance and make of goods and it was on this basis that the examination report of the subject goods was made.
9. The complainant of the petitioner / complainant states that there was no evidence of local procurement of the articles exported by the respondent no.1. There was no evidence of any supply / delivery of the exported articles. The goods were exported by the respondent no.1 by indulging in miss-declaration of the description and value of the goods claimed to be exported and duty drawback was claimed in a fraudulent manner. In these circumstances, petitioner / DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 5/9complainant contended before the Ld. Trial Court that offences under Sections 132 and 135 (1) (a) of the Customs Act has been committed by the respondents.
10. The Trial Court record reveals that the petitioner examined only four witnesses. PW1 is Kapil Vohra, Inspector Customs who proved his signatures on the complaint. PW1 further stated that the complaint was filed on the basis of the sanction order and authorization accorded by Mrs. Vijay Zuthsi, ZU, Commissioner Customs whose signatures he identified on the complaint. In his examination in chief itself PW1 stated that he did not have any personal knowledge of case. In cross examination, PW1 stated that the sanction order was given to him by Mrs. Vijay Zuthsi but he had no knowledge where it was typed or drafted. He had no personal knowledge of the case or on what basis the said sanction was granted.
11. PW2 is Amitabh Kumar, STO, CEIB, Delhi who stated that he was then posted at Assistant Director COE, DRI. He had supervised the investigation of the case and recorded certain statements under Section 108 of the Customs Act. He identified statements of several persons which were recorded by him under Section 108 of the Customs Act and also certain documents placed on record. In cross examination PW2 has deposed that he was the supervisory officer of the case. No goods were seized during investigation. No samples were kept while exporting the goods. They were not able to get / collect / seize any samples of the goods exported. He deposed that they tried to obtain samples and goods from the country of import but nothing could be found. He admitted that he had recorded the statement of Custom Officers concerned with export of the goods. He admitted that the Custom Officers had stated that they had processed the documents properly, examined the goods and shown the samples to the A.C. concerned exports before passing "let export order". He deposed that they also stated that they could not say with confirmation whether the goods exported were correct and same as declared by the exporter on the export documents. He deposed that no order was passed by any of the custom officers at the time of export of goods for testing the samples / exported goods in the DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 6/9laboratory.
12. L.S. Bisht, Assistant Director, DRI was examined as PW3. His examination in chief was recorded on 17.04.2001 and 08.08.2002. He however never appeared for his cross examination. M.L. Meena, Superintendent Customs was examined as PW4. His part examination in chief was conducted on 23.01.2003. His further examination in chief was deferred but the same was never carried out.
13. The record of the Trial Court reveals that several opportunities were granted to the petitioner to conclude pre-charge evidence. The same were not availed and by order dated 05.09.2005, the Ld. Trial Court closed the right of the petitioner / complainant to lead further evidence. An application was filed by the petitioner under Section 311 of the Cr.P.C. to recall PW3 L.S. Bisht and PW4 M.L. Meena but the same was rejected by the Ld. Trial Court by order dated 20.02.2006. The orders dated 05.09.2005 and 20.02.2006 were challenged by the petitioner before the Hon'ble High Court vide Criminal MC No. 1611 of 2006. The same was however dismissed by the Hon'ble High Court by order dated 30.01.2008.
14. Before this Court, Sh. Satish Aggarwala, Ld. Counsel for the petitioner had argued that the Ld. Trial Court had discharged the respondents mainly on the ground that the petitioner had failed to satisfactorily prove the order of the Sanctioning Authority for prosecution of the respondents. He submitted that it was not mandatory for the sanctioning authority himself to be examined as a witness to prove the sanction order. He further submitted that the validity of the sanction order could be considered on the basis of its contents which in this case clearly disclosed application of mind on the basis of the material collected during the course of investigation. In support of his submission, he relied upon the following case law:-
(i) R.S. Nayak vs. A.R. Antulay, AIR 1986 SC 2045; (ii) Gurbachan Singh vs. State, AIR 1970 Delhi 102; and (iii) State of T.N. vs. M.M. Rajendaran, (1998) 9 SCC 268. DRI vs. M/s Kan Karan Impex & Ors. CR No. 78 of 2014 7/9
15. On behalf of the respondents, Sh. Akshay Anand, Advocate had argued that the impugned order did not suffer from any infirmity. He further submitted that there was absolutely no pre-charge evidence led by the petitioner warranting framing of any charge against the respondents. Ld. Counsel for the respondents has cited Ripen Kumar vs. Department of Customs, 2001 [1] JCC [Delhi] 47 in his support.
16. I have Ld. Counsel for the parties and have perused the record of the Trial Court. Only four witnesses were examined by the petitioner. Out of them, the evidence of PW3 and PW4 cannot be read as one was never tendered for cross examination and the examination in chief of other was not even concluded. The cross examination of PW2 clearly reveals that the articles sought to be exported were inspected by the concerned officers of the Customs Department at the Air Cargo Unit of IGI Airport, New Delhi and they had not only opened the packages of the subject consignment but also issued a "let export order" after satisfying themselves regarding the correctness of the description of the articles declared in the export documents. As recorded above, the Ld. Trial Court had closed the right of the petitioner to lead further evidence after having failed to do so despite being granted several opportunities. The challenge of the petitioner to the orders of the trial court closing the right of the petitioner before the Hon'ble High Court resulted in failure. There absolutely no evidence brought on record by the petitioner to the effect that no local purchases were made in the market prior to export in respect of the articles exported or even that the alleged importer had not taken delivery of these articles. No witnesses in respect of these facts was examined.
17. In these facts and circumstances, the Ld. Trial Court has rightly observed in the impugned order that there was absolutely no material on record to frame charges against the respondents. The impugned order therefore does not suffer from any illegality or perversity. As there is no evidence on record in respect of the charges sought to be proved against the respondents, the DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 8/9impugned order of the Ld. Trial Court is upheld on this ground alone. In these circumstances, the question regarding validity of the sanction order for prosecution of the respondents is purely academic and does not warrant rendering of any finding by this Court.
18. For the reasons recorded above, the revision petition is dismissed. TCR along with copy of this order be sent back to the Ld. Trial Court. Revision file be consigned to record room.
Announced in the open Court (REETESH SINGH)
on 7th December, 2015 ASJ-02/FTC, PHC/NDD
07.12.2015
DRI vs. M/s Kan Karan Impex & Ors.
CR No. 78 of 2014 9/9