2013 (8) TMI 316 - HC - Customs

Mis-declaration of Goods - Prosecution - Criminal proceedings - Assesse imported consignments and cleared the same for home consumption Revenue was of the view that in order to avoid Anti-Dumping Duty in terms of notification No.147/2003-Cus, mis-declared the consignments of measuring tapes to be of Malaysian origin whereas the goods are of Chinese origin Whether the declaration given by the accused stating that the consignments were measuring tapes of Malaysian origin was correct or not Held that - The issue can be decided only by way of adjudication and by scrutiny of relevant records - on the side of the prosecution, triable issues were involved the assesse with mala-fide intention of evading duty had mis-declared the items Held that - Assesse had produced the fabricated certificate to show the country of origin as Malaysian origin instead of China with the intention to evade Anti Dumping Duty Assesse knowingly had produced the overseas invoice which was fabricated. Petition for Discharge from Criminal proceedings - Held that - The petition for dismissing the discharge petition was not entertained - The prosecution case was at a partly heard stage - Revenue had made out that the accused had evaded payment of duty Decided against assesse.

Summary

Issues:
1. Dismissal of discharge petition by the trial court.
2. Allegations of mis-declaration to evade Anti Dumping Duty.
3. Validity of the complaint filed by the Assistant Commissioner of Customs.
4. Admissibility of statements recorded under Section 108 of the Customs Act.
5. Fabrication of documents to evade duty.
6. Discrepancy in the conclusions of the trial court.
7. Necessity of adjudication and trial in the case.

Analysis:

1. The accused filed a discharge petition which was dismissed by the trial court. The defense argued that the complaint was not maintainable as similar proceedings were pending before the Commissioner of Customs. They contended that no prima facie case was made out under Sections 132 and 135 of the Customs Act. The defense emphasized that the consignments had been cleared for home consumption after a concluded assessment under Section 47 of the Customs Act, and no mis-declaration occurred. However, the court found no discrepancy in the trial court's decision, stating that the prosecution case was partly heard, and the defense had the opportunity to establish their case during adjudication.

2. The prosecution alleged that the accused mis-declared the origin of imported goods to evade Anti Dumping Duty. They argued that the accused produced fabricated documents, including certificates and invoices, to show Malaysian origin instead of Chinese. The defense claimed that the goods were genuinely from Malaysia, supported by documents like the certificate of origin and bill of lading. However, the prosecution presented evidence of fabrication and revenue loss, asserting that the accused knowingly evaded duty. The court found the prosecution's case strong, indicating a need for adjudication to decide the issues on merits.

3. The defense raised concerns about the validity of the complaint, citing ongoing departmental proceedings and the principle of natural justice. They questioned the necessity of the complaint when similar issues were being adjudicated by the Commissioner of Customs. The defense also highlighted the lack of efforts to verify the authenticity of seized documents and the absence of crucial investigations regarding the goods' origin. However, the court upheld the complaint's validity, emphasizing the need for trial to address the substantial revenue loss and mis-declaration allegations.

4. The defense challenged the admissibility of statements recorded under Section 108 of the Customs Act, arguing that they were voluntary and tainted. They referenced a relevant judgment to support their claim. The prosecution, on the other hand, considered these statements vital evidence, indicating fabrication and evasion of duty. The court acknowledged the importance of these statements in establishing the prosecution's case, underscoring the need for a trial to scrutinize the evidence thoroughly.

5. The prosecution presented evidence of document fabrication by the accused to evade duty. They highlighted discrepancies in the origin details provided in the documents and the actual source of the goods. The defense attempted to justify the discrepancies by asserting the goods' genuine Malaysian origin. However, the prosecution demonstrated through seized documents and financial transactions that the accused intentionally misrepresented the goods' origin to avoid Anti Dumping Duty. The court found the prosecution's argument compelling, necessitating a trial to address the fabrication and duty evasion issues effectively.

6. The court addressed the discrepancy in the conclusions reached by the trial court and the arguments presented by both parties. It emphasized the need for adjudication to resolve the conflicting claims regarding the origin of the imported goods and the duty evasion allegations. The court directed the trial court to prioritize the case and proceed with the trial without delay, allowing both sides to present their evidence and arguments for a fair adjudication.

7. In conclusion, the court dismissed the revision, confirming the trial court's decision to reject the discharge petition. It emphasized the importance of adjudication in resolving the complex issues raised in the case, particularly concerning duty evasion and document fabrication. The court instructed the trial court to proceed promptly with the trial, ensuring a thorough examination of the evidence and arguments presented by both the prosecution and the defense.