Allahabad High Court
Salil Bargoti vs Union Of India And 2 Others on 2 February, 2023
Author: Dinesh Kumar Singh
Bench: Dinesh Kumar Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD Reserved Case :- Application U/s 482 No.12708 of 2021 Applicant :- Salil Bargoti Opposite Party :- Union of India and 2 others Counsel for Applicant :- Arun Kumar Pandey,Anil Kumar Tripathi, Brijesh Sahai (Senior Adv.) Counsel for Opposite Party :- A.S.G.I.,Krishna Agarawal, Sanjay Kumar Yadav Hon'ble Dinesh Kumar Singh, J.
1. Heard S/Sri Arun Kumar Pandey and Anil Kumar Tripathi, learned counsel for the petitioner and Sri Gyan Prakash, learned Senior Advocate assisted by Sri Sanjay Kumar Yadav, learned counsel for the Central Bureau of Investigation (for short ''CBI').
2. The present petition under Section 482 Cr.P.C. has been filed seeking quashing of the charge sheet dated 29.1.2021 as well as the summoning order dated 2.3.2021 and the entire proceedings of Misc. Case No.02 of 2021 RC 3(E)/2006 EOW-I DLI (CBI Vs. Salil Bargoti and another), under Sections 120-B read with 420, 467, 468 and 471 IPC and substantive offences thereof, Police Station CBI/EO-I/New Delhi, pending in the court of Special Judicial Magistrate (CBI), Ghaziabad.
3. An information was received by the Directorate of Revenue Intelligence indicating involvement of certain racketeers in misuse of Duty Exemption Pass Book ( for short ''DEPB') and Duty Exemption Entitlement Certificate (for short ''DEEC') Scheme by using forged shipping bills in the name of fictitious as well as existing firms for obtaining DEPBs or for fulfilling export obligation against DEEC Licenses.
4. During the investigation, names of eight firms came to the light for obtaining the DEPB and DEEC Licences from Directorate General of Foreign Trade ( for short ''DGFT') offices situated at Moradabad, U.P. and Delhi. M/s Krishna Handicrafts, T. Saket, New Civil Lines, Moradabad was one of the such firms. The information indicated that racketeers were involved in misuse of DEPB Scheme by adopting a novel modus operandi. Shipping bills were being prepared either in the name of non-existing firms or in the name of front companies. The shipping bills were filed mainly through manual mode and the declared port of export was either Jawaharlal Nehru Port Trust (JNPT) or Mumbai.
5. The Directorate of Revenue Intelligence in its investigation found that the declared addresses of the firms were not existing except for two firms i.e. M/s D.B. Exports and M/s Zenith International. These firms did not have any manufacturing facilities. Having noticed the fraud being committed by these firms, the Joint Director, DGFT, Moradabad had issued cancellation orders against the DEPBs and DEEC Licences of these firms. The verification of Bank Realisation Certificates (BRC) revealed that though no exports have been made, yet the firms/racketeers had arranged to receive the remittance through banking channels and BRCs were genuinely issued by the respective banks. Thus, the BRCs were not forged, but the money was laundered through banking channels. The examination of Shipping Bills revealed that the Custom House Agents ( for sort ''CHA') shown to have handled the exports, but they never handled the concerned Shipping Bills.
6. The interrogation of the authorised signatory Mr. Sameer Ganatra of M/s K.M. Ganatra & Co. revealed that they were allowing to use their CHA licences to some other persons for monetary consideration. One Mr. Vipul Shah was one of such persons. The Shipping documents in respect of some of the Moradabad based companies were received through Mr. Vipul Shah and these companies included M/s M.M. Overseas, M/s Saroj Enterprises, M/s Krishna Handicrafts, M/s Sadashiv Export and the export procedure in respect of these firms were also handled by Mr. Vipul Shah.
7. The investigation in respect of M/s Krishna Handicrafts revealed that the said firm had obtained four DEEC Licences, out of which two licences were utilised by them for the imports at Chennai. No imports against the other two licences were noticed. The Directorate of Revenue Intelligence, Chennai Unit had investigated the case against them covering the two import licences which were utilized and a show cause notice had been issued by them on the ground of diversion of duty free import material in contravention of the provisions of DEEC Scheme and the EXIM Policy. The said show cause notice has already been adjudicated by the Adjudicating Authority confirming the demand.
8. Since the offence involved is forging of Shipping Bills without making any physical exports, therefore, the Directorate of Revenue Intelligence was of the opinion that the offence committed by these companies would come within the Indian Penal Code (for short ''IPC') and not under the Customs Act. Therefore, a request was made that these cases should be considered for taking up further investigation by the concerned agency under IPC. As the said firms had also managed to receive the remittance against the non-exiting exports, the CBI should investigate this aspect also in co-ordination with the Directorate of Enforcement.
9. On the basis of this report of the Directorate of Revenue Intelligence, the CBI registered a case being RC 3(E)/2006 EOW-I DLI, under Sections 120-B read with 420, 467, 468 and 471 IPC and substantive offences thereof on 30.11.2006 against these entities, who had allegedly misused DEPBs and DEEC Licences and had fraudulently received remittance against non-exiting exports. The investigation of the Directorate of Revenue Intelligence had calculated the amount of Rs.74.94 Lakhs in respect of DEPBs and in respect of DEEC Licences, Rs.16.49 Crores. Finding that the report of the Directorate of Revenue Intelligence had disclosed the commission of offence under Sections 120-B read with 420, 467, 468 and 471 IPC and the substantive offences thereof, the investigation was entrusted to Bodhi Raj Hans, Inspector of Police, CBI, EO-I, New Delhi.
10. The investigation carried out by the CBI would disclose that M/s Krishna Handicrafts was a partnership firm of Salil Bargoti, the present petitioner, Sanjay Singh and Smt. Maya Rani and this firm obtained export licence. The partnership firm was dissolved in 1996 and the petitioner was authorised to run affairs of M/s Krishna Handicrafts. The other two firms were declared not to be liable to any liability after dissolving the firm. On the request of the said firm, another Import-Export Code number was allotted to the firm and another partner Mohd. Masroor was inducted in the partnership, but the same was dissolved vide dissolution deed dated 2.7.1997. Thereafter, the petitioner became the sole proprietor of the firm. M/s Krishna Handicrafts was registered with Export Promotion Council for Handicraft and the licence was granted for a period of five years subject to renewal. During year 2002-03, the firm was declared defaulter for non-payment of annual fees.
11. The investigation further revealed that on the request of made by the petitioner vide letter dated 30.6.2001, Joint Director, DGFT, Moradabad issued an Advance Licence No.2910002173 dated 2.8.2001. The Cost, Insurance and Freight (CIF) value of this licence was of Rs.3.75 Crores with Free on Board (FOB) value of Rs.4,98,75,000/-.
12. In the application, the details of outstanding export in column 12 (appendix 57) vis-a-vis advance licences earlier issued to M/s Krishna Handicrafts were mentioned. The petitioner vide letter dated 19.7.2001 submitted explanation regarding deficiencies pointed out in its application stating that they have already fulfilled export obligation by value in regard to advance licence no.2910000517 and regarding advance licence no.2910000727, he said that they have fulfilled 89% export obligation by value and they have already submitted evidence of export and import vide their letter dated 8.6.2001. The licence was cancelled by the DGFT authorities as the petitioner failed to fulfill export obligation.
13. The investigation further revealed that the petitioner has utilised the funds so credited in the account of M/s Krishna Handicrafts and caused wrongful loss to the Customs Department and corresponding wrongful gain to himself by way of making duty free imports on the basis of advance licence and not fulfilling the export obligations as mandated. After completing the investigation, charge sheet has been filed under Sections 120-B read with 420, 467, 468 ad 471 IPC and substantive offences thereof against the petitioner and others.
14. Learned counsel for the petitioner has submitted that the Customs Act prohibits the criminal prosecution under the IPC in respect of evasion of custom duty. The impugned order of cognizance and summoning the petitioner by the learned CBI Court in Special Case No.05 of 2001 is without jurisdiction inasmuch as the cognizance could only be taken by the Customs Court under Section 137 of the Customs Act, 1962 on a criminal complaint filed under Sections 132, 135 and 135A of the Customs Act, 1962 by the Directorate of Revenue Intelligence after taking sanction from the Principal Commissioner, Customs after confirming the demand. He has placed reliance on Paragraph Nos.2, 3 4 and 7.1 to 7.6 of the revised guidelines issued by the Government of India. Ministry of Finance, Department of Revenue, Central Board of Excise & Customs (Anti Smuggling Unit), New Delhi to press the aforesaid submission.
15. Learned counsel for the petitioner has further submitted that Rule 15 of Chapter XXX of Offences and Penal Provisions Customs Manual, 2018 provides that no prosecution proceedings can be launched in a Court of Law against any person under the Customs Act, 1962 and no cognizance of any offence under Sections 132, 133, 134, 135 and 135A of the said Act can be taken by any court except with previous sanction of concerned Commissioner of Customs. The Commissioner of Customs is required to sanction prosecution only after being satisfied that there are sufficient reasons justifying the same. The criminal compliant is to be filed in appropriate court of law.
16. Learned counsel for the petitioner has also submitted that as per the own case of the Directorate of Revenue Intelligence, the petitioner's firm has caused loss to the tune of Rs.17 Crores of custom duty to Government of India and has not fulfilled the export obligation as mandated as per the EXIM Policy. This would indicate that the Directorate of Revenue Intelligence itself had admitted that export obligation was not fulfilled by the petitioner and in view thereof, the only recourse available to the Directorate of Revenue Intelligence was to file a criminal complaint under Section 135 (1)(e)(i)(A) of the Customs Act, 1962 and the CBI lacks the jurisdiction to investigate the offence and file the charge sheet.
17. Learned counsel for the petitioner has also submitted that the offence under Sections 420, 467, 468 and 471 read with 120-B IPC are not made out at all against the petitioner. He has further submitted that the Customs Act being complete act, provides for civil as well as criminal liabilities and even for a criminal liability under the Customs Act, the procedure prescribed under the Customs Act is required to be followed.
18. Since sum and substance, the allegation is of evasion of custom duty by way of forging the shipping bills and submitting bogus sipping bills with criminal conspiracy, therefore, the prosecution could have been only under Sections 132, 133, 134, 135 and 135A of the Customs Act. In view thereof, it has been submitted that the CBI court, which has taken cognizance and issued summons to the petitioner, lacks jurisdiction and the whole proceedings being without jurisdiction, are liable to be quashed.
19. On the other hand, learned counsel for the CBI has submitted that the offence involves is of forging the shipping bills without making any physical exports and forging the documents is not an offence defined under the Customs Act and it is an offence under IPC. Therefore, the investigation was entrusted to the CBI, which carried out the investigation and after completion of the investigation in detail, charge sheet has been filed against the petitioner under Sections 120-B read with 420, 467, 468 and 471 IPC and substantive offences thereof. He has further submitted that for offence committed under the Customs Act, the proceedings can be undertaken under the Customs Act by filing a complaint, but for the offences which are defined under the IPC, the investigation was entrusted to the investigating agency and the criminal court under the Cr.P.C. is entitled to take cognizance on the charge sheet for the offences and proceed with the matter. He has, therefore, submitted that the CBI Court has rightly taken cognizance and issued summons against the petitioner under the aforesaid Sections of IPC and no interference is required by this Court in the ongoing proceedings.
20. I have considered the submissions advanced on behalf of the learned counsel for the parties and perused the record.
21. The primary allegation is of forging the shipping bills and causing loss to the tune of Rs.17 Crores of custom duty to the Government of India. Forging of document and cheating etc. are not the offences which are defined under the Customs Act. The judgement relied upon by the learned counsel for the petitioner (Union of India Vs. Ashok Kumar Sharma and others; (2020) SCC Online SC 683) has no relevance to the facts of the present case as in that case the offence is squarely covered within the ambit of the special statute such as Drugs and Cosmetics Act.
22. The investigating agency or the police would have jurisdiction to investigate the offence committed under the IPC. There may be some overlapping of two statues regarding the offence committed under IPC as well as under the Customs Act, but that would not preclude the registration of the FIR, investigating the offence and taking cognizance and summoning an accused, if after investigation it has been found that such an accused has committed the offence under the IPC besides the Customs Act. In view thereof, I find no merit in the present petition.
23. Thus, petition lacks merit and substance, which is hereby dismissed. Interim order, if any, stands vacated. Trial court to proceed accordingly.
( Dinesh Kumar Singh, J.) Order Date: 2nd February, 2023 Rao/-