2014 (8) TMI 1094 - HC - Customs

Compounding of offences - Section 132 and Section 135(1)(a) of the Customs Act - The ACMM was of the view that although a specific prayer had been made by the Department before the Apex Court seeking a direction for reopening of the case but the same had not been permitted and the ACMM not being in a position to recall its order, the said application was dismissed - Held that - a second complaint on the same facts is also not barred where the first complaint has been dismissed without assigning any reason and in such an eventuality, a second complaint can be proceeded with if there is sufficient ground made out in the said complaint. Since the whole foundation of the order on the strength of which the order dated 15-1-2007 was passed has been set aside by the Supreme Court i.e. (order of the Compounding Authority dated 25-5-2006 and order of the High Court dated 17-10-2006) by its subsequent order dated 25-1-2008, the order dated 15-1-2007 cannot be sustained. The order dated 20-2-2010 is also wholly illegal. Petition disposed off.

Issues Involved:
1. Compounding of Offence
2. Discharge of Accused
3. Reopening of Case
4. Implementation of Supreme Court Orders

Issue-wise Detailed Analysis:

1. Compounding of Offence:
The Chief Commissioner of Customs compounded the offence under Section 132 and Section 135(1)(a) of the Customs Act on 25-5-2006, allowing the respondent to pay Rs. 15 lacs as the compounding fee. This order was initially upheld by the High Court on 17-10-2006. However, the Supreme Court later set aside this compounding order on 25-1-2008, stating that compounding cannot be allowed if there are apparent contradictions, inconsistencies, or incompleteness in the applicant's case before the Compounding Authority. The Supreme Court emphasized that the compounding mechanism should only be allowed in cases of doubtful benefit to the Revenue to prevent needless litigation.

2. Discharge of Accused:
Based on the compounding order and the High Court's endorsement, the ACMM discharged the accused on 15-1-2007. The discharge order noted that the Chief Commissioner had compounded the offence and that the High Court had disposed of the related writ petition. However, after the Supreme Court set aside the compounding order, the Department sought to reopen the case.

3. Reopening of Case:
The Department filed an application before the ACMM on 5-2-2008, following the Supreme Court's judgment. The respondent was summoned on 29-2-2008. Despite the Supreme Court's direction allowing the Department to work out its rights, the ACMM dismissed the application to reopen the case on 20-2-2010, stating that the Supreme Court had not specifically permitted reopening. The ACMM held that it lacked the power to recall the discharge order.

4. Implementation of Supreme Court Orders:
The Supreme Court's order on 25-1-2008, which set aside the compounding order and the High Court's endorsement, necessitated a retrial of the accused. The Department argued that the ACMM's refusal to reopen the case was illegal and that the Supreme Court's orders required implementation through a retrial. The High Court agreed, stating that the orders of the Compounding Authority and the High Court had been set aside, and the necessary corollary was that the offence under Section 132 and Section 135(1)(a) of the Customs Act had to be tried. The High Court emphasized that the initial discharge was not on merits but based on the now-invalid compounding order.

Conclusion:
The High Court set aside the ACMM's orders dated 15-1-2007 and 20-2-2010, directing that the respondent must face trial. The respondent was instructed to appear before the concerned ACMM on 28-8-2014 to proceed with the trial. The High Court underscored that the Supreme Court's orders were not merely advisory but required strict implementation, necessitating the retrial of the accused to uphold justice and legal propriety.

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