1960 (3) TMI 61 - HC - FEMA

Summary

Issues Involved:
1. Applicability of Section 167(81) of the Sea Customs Act to contravention of Section 8(2) of the Foreign Exchange Regulation Act.
2. Interpretation of Section 186 of the Sea Customs Act in relation to proceedings under Section 167(81) after goods have been confiscated and a penalty has been levied.
3. Necessity of referring a question regarding the proviso to Section 23 of the Foreign Exchange Regulation Act to the Full Bench.

Detailed Analysis:

1. Applicability of Section 167(81) of the Sea Customs Act to Contravention of Section 8(2) of the Foreign Exchange Regulation Act:

The petitioner was convicted for offenses under Section 167(81) of the Sea Customs Act and Section 8(2) read with Section 23-B of the Foreign Exchange Regulation Act. On appeal, the conviction under the Foreign Exchange Regulation Act was set aside, but the conviction under the Sea Customs Act was upheld. The main contention was that Section 167(81) of the Sea Customs Act could not apply to a contravention of Section 8(2) of the Foreign Exchange Regulation Act. The court analyzed the provisions of both acts, noting that Section 23-A of the Foreign Exchange Regulation Act deemed restrictions under Sections 8(1) and (2) to be imposed under Section 19 of the Sea Customs Act, thus incorporating the provisions of the Sea Customs Act by reference. The court concluded that Section 167(81) of the Sea Customs Act does apply to contraventions of Section 8(2) of the Foreign Exchange Regulation Act, despite being introduced by a later amendment.

2. Interpretation of Section 186 of the Sea Customs Act:

Section 186 of the Sea Customs Act states that the award of any confiscation, penalty, or increased rate of duty under the Act by an officer of Customs shall not prevent the infliction of any punishment to which the person affected is liable under "any other law." The court examined whether this precludes proceedings under Section 167(81) of the Sea Customs Act in cases where goods have been confiscated and a penalty has been levied. The court held that Section 186 does not preclude such proceedings. It emphasized that the imposition of civil penalties by customs authorities does not constitute a criminal prosecution, thus not attracting the doctrine of "double jeopardy." The court cited several authorities, including Supreme Court decisions, to reinforce that civil penalties and criminal prosecutions are not mutually exclusive and can overlap.

3. Necessity of Referring a Question Regarding the Proviso to Section 23 of the Foreign Exchange Regulation Act:

The court considered whether to refer a question regarding the proviso to Section 23 of the Foreign Exchange Regulation Act, which mandates that no complaint shall be made unless the accused is given an opportunity to show that he had the necessary permission. The lower appellate court had acquitted the accused for the offense under Section 23(1)(B) of the Foreign Exchange Regulation Act. The court found no necessity to refer this question to the Full Bench, as the accused had been acquitted of that offense, and there was no evidence to suggest that the accused had not been questioned about the license or permission.

Opinion of the Full Bench:

The Full Bench addressed two main questions:
1. Whether Section 167(81) of the Sea Customs Act does not apply to contravention of Section 8(2) of the Foreign Exchange Regulation Act.
2. Whether Section 186 of the Sea Customs Act precludes proceedings under Section 167(81) in cases where goods have been confiscated and a penalty has been levied.

The Full Bench concluded that Section 167(81) of the Sea Customs Act does apply to contraventions of Section 8(2) of the Foreign Exchange Regulation Act. It also held that Section 186 does not preclude proceedings under Section 167(81) even if goods have been confiscated and a penalty has been levied. The court emphasized that civil penalties and criminal prosecutions are distinct and can coexist without constituting double jeopardy.

Final Order:

The court noted that the Full Bench's decision on the points of law was against the petitioner. On the merits, the evidence established the guilt of the accused. However, considering that the entire sum of Rs. 25,000 had been confiscated and a further penalty of Rs. 5,000 had been levied and paid, the court reduced the sentence to the period already undergone, concluding that further imprisonment was not necessary to serve the ends of justice.