Karnataka High Court
Chiramith Precision (India) vs Deputy Commr. Of Cus. (P) on 30 March, 2004
Equivalent citations: 2005CRILJ372, 2004(95)ECC7, 2004(169)ELT145(KAR)
ORDER M.S. Rajendra Prasad, J.
1. This Criminal Petition by the accused filed under Section 482 Cr.P.C, praying the Court for quashing the proceedings in C.C. No. 87/2001 on the file of the Addl. C.J.M., Mangalore, wherein the process had been ordered against the petitioners for offence under Section 135 of the Customs Act on the complaint submitted by the respondent herein under Section 200 Cr.P.C., challenging the legality and validity of the proceedings impugned.
2. The Court has heard the arguments of Sri Mohammad Ali, the learned Counsel appearing on behalf of the petitioners and Smt. Shireen Zafrullah, the Addl. Central Government Standing Counsel.
3. The learned Counsel for the petitioners, strenuously contended that the material on record clearly shows that the entire proceedings impugned before this Court are illegal and improper. The complainant was not at all justified in filing the complaint before the learned Magistrate. He also contends that the fact finding authority i.e., the Tribunal constituted under the provisions of the Customs Act, after a detailed enquiry, had set aside the order of the Commissioner of Customs, wherein the Commissioner had imposed duty and also penalty in respect of the contravention of the provisions of Customs Act [2002 (148) E.L.T. 714 (Tri. - Bang.), The learned Counsel also contends that in view of the findings of the Tribunal, which is the fact finding authority, the learned Magistrate was not at all justified in taking cognizance of the case against the accused.
4. The learned Counsel also relies upon the following decisions in support of his contentions:
(1) 1999 (113) E.L.T. 375 (S.C.)
(2) 1994 (73) E.L.T. 269
(3) 1996 (81) E.L.T. 479
(4) 1999 (113) E.L.T. 37
(5) 1999 (108) E.L.T.16 (S.C.)
(6) 2002 (139) E.L.T. 498
(7)
5. Placing reliance on the ratio laid down in the said decision, the learned Counsel prays for allowing the Criminal Petition.
6. On the contrary, the learned Addl. Central Government Standing Counsel for the respondent, strenuously contended that the material on record clearly shows that the proceedings impugned are legal and proper. Prima facie, the petitioners had contravened the provisions of Section 135 of the Customs Act and they are liable for prosecution. The learned Counsel also contended that the material on record clearly shows that the tribunal has recorded a finding in favour of the petitioners, the same would not ensue to the benefit of the petitioners. The learned Counsel also contends that the order of confiscation in the Departmental Enquiry does not in any way affect the complainant to file a complaint and prosecute the petitioners for the offence in question. The learned Counsel also relies upon decisions of the Apex Court, reported in 1999 (113) E.L.T. 375 (S.C.) in support of her contentions. Placing reliance on the ratio laid down in the said decisions, the learned Counsel prays for dismissal of the petition.
7. The Court has carefully gone through the material on record and has given its anxious thoughts over the rival contentions raised at the Bar. 8. From the material on record, it is seen that there is no dispute that the accused have got themselves engaged in the manufacture of precision tools i.e., components of watches. The firm is a 100 per cent Export-Oriented Unit. On 23-2-1998, the officials of D.R.I., Mangalore had conducted a search in the premises of the 1st petitioner, on the ground that there had been misuse of spares and raw materials which were imported in 100 per cent E.O.U. The D.R.I, officials had also seized the documents and goods under a Mahazar. The Commissioner of Customs had issued Show Cause Notice on 14-8-1998 and after considering the Show Cause Notice, the Commissioner had passed an order on 10-12-1999, imposing penalties of payment of duties and also confiscation of the seized goods. The petitioners herein, feeling aggrieved had preferred an appeal before the tribunal, under the provisions of the Customs Act. The tribunal, after hearing both sides had recorded a finding to the following effect [2002 (148) E.L.T. 714 (Tri.-Bang.):
"(t) To sum up, we find that -
(i) The Order of the ld. Commissioner demanding duty on spares imported by the Appellants Unit viz., Chiramith Precision (India) during the period 1992 to 1997, on the ground that the same were diverted for being used for the machinery installed at Tavadec Industries Pvt. Ltd. and Chirag Enterprises, is not sustainable in law, in the light of the facts explained and findings arrived in the foregoing paras.
(ii) The ld. Commissioner erred in holding that the Appellants viz., Chiramith Precision (India) diverted raw materials imported by them to Tavadec Industries Pvt. Ltd., for being used in the products for being manufactured and sold to customers in the domestic market without adducing any proper evidence to support the same.
(iii) The ld. Commissioner has erred in holding that the Appellants viz., Chiramith Precision (India) illegally exported spares to Mr. Didiar of Switzerland for allegedly setting payment due to him, without adducing any evidence for the same. No case of penalty on any appellant under Section 114 of the Customs Act, 1962 has been established.
(iv) The ld. Commissioner erred in holding that the Appellants viz., Chiramith Precision (India) imported duty free raw materials and clandestinely diverted the same to Chirag Enterprises and Tavadec Industries Pvt. Ltd. (in the guise of high generation of waste) as against the purpose for which the same were imported, without technically verifying the same. On the contrary, Chiramith Precision (India) have produced a Report certified by the Regional Engineering College, Suratkal about the percentage of scrap generated during the course of manufacture of various components.
(v) As no confiscation under Section 111 of Customs Act, 1962 of any imported goods is being upheld, imposition of penalty under Section 112 called for and are required to be set aside.
(vi) Penalties imposed under Section 114 of Customs Act, 1962 cannot be upheld.
(vii) The orders of appropriation of amounts are not legal and proper and the refund of the same is required to be made.
(viii) The impugned order has been passed without considering the various submissions made by the Appellants, which shows a clear nonapplication of mind on the part of the ld. Commissioner. The findings of the ld. Commissioner in the impugned order are purely on assumptions and presumptions, without any valid or corroborative evidence for substantiating the same and contradictory such findings are required to be set aside on these grounds itself.
(ix) The entire proceedings from the issue of show cause notice that the adjudication concluded by non-compliance of binding Circular of Board are void and are required to be set aside for that reason alone.
3. In view of our findings, the order is set aside and appeals allowed with consequential relief."
9. When things existed so, the respondent had filed a private complaint before the trial court, alleging the same facts and in particular, it was contended that the accused had committed offence punishable under Section 135 of the Customs Act. The accused feeling aggrieved by the order of the Commissioner, have come up before this Court with the instant Criminal Petition.
10. It is a settled principle of law that the inherent powers of this Court are to be exercised with great care, caution and circumspection and in rarest of rare cases.
11. At this stage, it is necessary to mention that the bone of contentions of the petitioners is that in view of the findings of the Tribunal, the final fact finding authority under the act, the criminal prosecution is totally uncalled for. This aspect has been disputed by the other side and according to the respondent, the prosecution of the accused for offence under Section 135 is totally justifiable.
12. The point at issue falls into a very narrow compass for this Court to see whether the criminal proceedings launched against the petitioners for the said offence is legal and proper.
13. At this stage, it is necessary to refer to a decision of the Delhi High Court, reported in 1994 (73) E.L.T. 269, wherein the Delhi High Court had held that the Tribunal having found that the petitioners ware innocent and completely exonerated them of the charge of smuggling. The Criminal prosecution under Section 135 of the Customs Act was not maintainable and the same was liable to be quashed.
14. It is also necessary to refer to another decision of the Kerala High Court, reported in 1996 (81) E.L.T. 479, wherein it has been held that the tribunal's decision in the same case, criminal court cannot record a contrary conclusion, so long as the decision of the tribunal is in force. At this stage itself, I may hasten to add that the order of the tribunal, which had been relied upon by the petitioners remains unchallenged.
15. It is also necessary to refer to another decision of this Court, reported in 1999 (113) E.L.T. Page 37, wherein this Court had held that the tribunal as the last fact finding authority, having held gold articles seized to be finished gold ornaments and not primary gold, prosecution not to be continued.
16. It is also necessary to refer to another decision of the Apex Court, reported in 1999 (108) E.L.T. 16 (S.C.) rendered in the case of G.L. Didwania v. Income-tax Officer. The tribunal, the final fact finding authority under the Act, deciding the question in favour of the assessee, prosecution proceedings against him on the same charge cannot be sustained.
17. It is also necessary to refer to another decision of Madras High Court, reported in 2002 (139) E.L.T. 498 rendered in the case of Swathi Medicals v. Union of India, wherein, it has been held that the tribunal having held that the petitioner makes necessary declaration for the classification list etc. and followed by procedures under Central Excise Act, without suppressing any material. The Department not challenged the order of the tribunal, prosecution of the petitioners on the same facts is not legal. It is necessary to mention that the citations relied upon by the complainant has been considered and distinguished by the Madras High Court. The cumulative effect of all these decisions is that whenever there has been a clean chit given to the accused by the tribunal, which is the final fact finding authority, the criminal prosecution of the accused is impermissible. In the case on hand also, the tribunal as a final fact finding authority did come to conclusion as stated and exonerated from payment of duty and penalty and also set aside the order of confiscation.
18. In view of the facts and circumstances of the case, in the opinion of this Court, the ratio laid down in the said decisions would come to the assistance of the petitioners.
19. At this stage, it is also necessary to mention another decision of the Apex Court, , wherein it has been held that the :
"Judicial process should not be an instrument of oppression or needless harassment. The Court should be circumspect and judicious in exercising discretion and should take all the relevant facts and circumstances into consideration before issuing process lest it would be an instrument in the hands of private complainant as vendetta to harass the persons needlessly. Therefore, in case of default in repayment of bank loan, when the debt became time-barred and the bank has adjusted the debt from the FDRs in its possession which were deposited by the guarantor by way of security, after the maturity, and a complaint was laid by the guarantor impleading the Chairman, Managing Director of the bank and a host of officials on the charges under Sections 109, 114 and 409 of Indian Penal Code, it would be the responsibility and duty of the Magistrate to find whether the concerned accused were legally responsible for the offences charged for, before issuing the process. Thus the complaint on the basis of which the process was issued was filed as vendetta to harass the persons needlessly, the complaint was quashed."
20. It is a settled principle of law that this court has been empowered to exercise the inherent powers, if the petitioner is able to make out any one of the grounds as enshrined in the statute that having regard to the facts and circumstances of the case, in the opinion of this Court and the said law, the continuance of criminal proceedings against the accused would amount to abuse of process of law and it would be in the ends of justice, if this Court were to exercise inherent powers and allow the petition, as prayed.
21. For the foregoing reasons, the petition stands allowed and consequently, the proceedings in C.C. No. 87/2001 on the file of the I Addl. C.J.M., Mangalore, is hereby quashed.