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2003 (5) TMI 63 - SC - Customs


Issues Involved:
1. Quashing of FIR and criminal proceedings under Section 120B read with Section 420 of the Indian Penal Code.
2. Applicability and effect of the Kar Vivad Samadhan Scheme, 1998.
3. Allegations of conspiracy and cheating against the appellants.
4. Immunity from prosecution under the Customs Act, 1962.
5. Vicarious liability under penal law.

Detailed Analysis:

1. Quashing of FIR and Criminal Proceedings:
The appellants sought the invocation of the inherent powers of the High Court to quash the FIR and proceedings initiated under Section 120B read with Section 420 of the IPC. The High Court dismissed the petitions, holding that obtaining a Customs Duty Exemption Certificate on false assertions constituted an offense. The Supreme Court, however, found that the criminal liability stood compounded on a settlement with respect to civil issues, and thus the FIR was erroneously issued and unwarranted.

2. Applicability and Effect of the Kar Vivad Samadhan Scheme, 1998:
The appellants argued that they were immuned from any criminal proceedings pursuant to the certificates issued under the Kar Vivad Samadhan Scheme, 1998. The Supreme Court noted that the GCS had settled the Customs Duty under the Scheme and was granted immunity from prosecution under the Customs Act. The Court held that the immunity extended to offenses under the IPC related to the same facts, thus making the criminal proceedings unsustainable.

3. Allegations of Conspiracy and Cheating:
The FIR alleged that the appellants conspired to cheat the Government of India by evading Customs Duty and violating the 'actual user' condition. The Supreme Court found no prima facie case of conspiracy or cheating, noting that the Customs Duty had been paid and the GCS acted bona fide. The Court emphasized that there was no fraudulent or dishonest intention on the part of the GCS or its office bearers.

4. Immunity from Prosecution under the Customs Act, 1962:
The Supreme Court highlighted that the GCS was granted immunity from prosecution under the Customs Act pursuant to the Kar Vivad Samadhan Scheme. The Court held that the immunity extended to any offenses that may prima facie be made out on identical allegations of evasion of Customs Duty and violation of notifications under the Customs Act.

5. Vicarious Liability under Penal Law:
The Court reiterated that under penal law, there is no concept of vicarious liability unless explicitly covered by the statute. The Customs Act did not cover such liability, and the appellants were wholly discharged under the Act. The Court held that it would be an abuse of the judicial process to subject the appellants to criminal proceedings when the matter had already been settled under the Kar Vivad Samadhan Scheme.

Conclusion:
The Supreme Court allowed the appeals, set aside the High Court's order, and quashed the FIR and the proceedings initiated under Section 120B read with Section 420 of the IPC. The Court emphasized that the appellants were granted immunity under the Kar Vivad Samadhan Scheme, and there was no prima facie case of conspiracy or cheating. The continuance of the criminal proceedings would amount to double jeopardy and an abuse of the judicial process.

 

 

 

 

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