2014 (1) TMI 277 - HC - Customs

Smuggling of gold - Arrest on the basis of seizure - Rejection of anticipatory bail - Penalty u/s 112 - Held that - any argument canvassed with respect to provisions under Section 104 of the Customs Act before and after amendment that previously the offences were bailable and now some of them are non-bailable cannot come to the assistance of petitioner to contend that whatever offences continuously carried out by him in relation to the evasion of duty which was detected later after amendment has to be considered separately constituting only bailable offence. When all such transactions could be reckoned together for determining the quantum of value of goods where an offence over evasion of duty is detected after the amended act there is no merit in the plea made for treating the earlier transactions as constituting only bailable offences. Duty free goods imported in a unit of Special Economic Zone if it is brought to the domestic market without authority violating the statutory prescriptions it is a clear case of evasion of customs duty and then penalties covered by the Customs Act would apply with all force - it is a clear case having enough ground to suspect complicity of petitioner in the offence alleged and this is not a fit case where petitioner can be extended the discretionary relief of pre-arrest bail. Conduct of petitioner also disentitle him to seek the discretionary relief as it is noticed that he had moved applications twice before the Sessions court. After the first application moved by him was dismissed he moved another application before the same court. Strangely enough that was entertained and later disposed on merits by the learned Sessions Judge without taking note that the relief under Section 438 of the Code is purely discretionary and in the absence of an exceptional case showing that miscarriage of justice would follow if second application is not entertained no party is entitled to move successive applications for such discretionary relief before the same court - Appellant not entitled to relief - Decided against appellant.

Summary

Issues involved:
1. Application for anticipatory bail under Section 438 of the Code of Criminal Procedure.
2. Interpretation of Sections 104 and 135 of the Customs Act, 1962.
3. Determining the applicability of amendments to the Customs Act regarding bailable and non-bailable offences.
4. Examination of the definition of 'smuggling' and 'import/export' under the Customs Act.
5. Assessment of the grounds for granting pre-arrest bail and the discretionary relief under Section 438 of the Code.

Detailed Analysis:
1. The petitioner, the Managing Director of a company operating within a Special Economic Zone, sought anticipatory bail in a case involving smuggling of gold. The Directorate of Revenue Intelligence alleged that gold imported duty-free was being diverted and smuggled out. The petitioner's application was opposed, arguing that the offences fell under Sections 135 and 112 of the Customs Act, making them non-bailable. The petitioner contended that the amendments to Section 104 of the Act should not retroactively apply to previous transactions.

2. The court analyzed the amendments to Section 104 of the Customs Act, distinguishing between bailable and non-bailable offences. It held that the retrospective application of the amendment did not violate substantive law, emphasizing that procedural changes do not infringe on constitutional rights. The court rejected the petitioner's argument that each transaction should be treated separately, stating that all transactions could be considered together to determine the value of goods involved in the offence.

3. The definition of 'smuggling' and the implications of diverting duty-free goods from a Special Economic Zone to the domestic market were examined. The court emphasized that such actions constituted evasion of customs duty and were subject to penalties under the Customs Act. It dismissed the petitioner's challenge based on the definitions of 'import' and 'export', affirming the legality of the proceedings initiated by the Directorate of Revenue Intelligence.

4. Considering the objections raised by the Directorate of Revenue Intelligence and the petitioner's conduct of filing multiple applications for anticipatory bail, the court concluded that there were sufficient grounds to suspect the petitioner's complicity in the alleged offence. It deemed the case not suitable for granting the discretionary relief of pre-arrest bail under Section 438 of the Code, ultimately dismissing the petitioner's application.