2019 (3) TMI 1875 - HC - Customs

DFIA Scheme - fraudulent export of garments to Dubai - exoneration of the petitioner by the adjudicating authority - criminal prosecution launched against petitioner on the same set of facts - prosecution of the petitioner for the alleged offence - relief under section 482 of Cr.PC. Whether on account of exoneration of the petitioner by the adjudicating authority, criminal prosecution launched against petitioner on the same set of facts and circumstances can be allowed to continue? - HELD THAT - The Tribunal was of the opinion that there was absolute lack of material tangible evidence against the petitioner and whatever documentary evidence collected by the Department did not conclusively link the petitioner to the alleged offence. The Tribunal was of the opinion that solely on the basis of uncorroborated confession of the co-accused, petitioner cannot be found guilty of the alleged offences and consequently the Tribunal set aside the penalty imposed on the petitioner. It is borne on record that as against the order of the Tribunal, the Commissioner of Customs preferred an appeal before this Court in CSTA No. 8/2016. The said appeal was dismissed as withdrawn - Since the petitioner is exonerated on merits on the very same set of facts and is held innocent by the adjudicating authority, in my view, criminal prosecution on the same set of facts and circumstances, cannot be allowed to be continued, on the underlying principle of 'higher standard of proof' in criminal cases. Therefore, solely on this ground, the proceedings initiated against petitioner are liable to be quashed - question is answered in favour of the petitioner. Whether respondent has made out sufficient grounds for prosecution of the petitioner for the alleged offence? - HELD THAT - In the case in hand, except the confession of the coaccused, the prosecution has not rested its case on any other piece of evidence to bring home the guilt of the accused. Under the said circumstances, the prosecution of the accused person solely on the basis of the statement of the co-accused that too in the backdrop of exoneration of the petitioner in the adjudication proceedings, in my view, the material produced by the prosecution is not sufficient to proceed against the petitioner for the alleged offence - issue is also answered in favour of the petitioner. Whether petitioner is entitled for the relief under section 482 of Cr.PC? - HELD THAT - No doubt, the records indicate that the warrant issued against the petitioner has remained unexecuted. Having regard to the overall facts and circumstances of the case, in my view, it is not proper to deny the relief to the petitioner solely on the ground that he has failed to surrender himself before the criminal Court. As I have come to the conclusion that the material collected by the investigating agency prima facie are not sufficient to make out a ground for prosecution of the petitioner for the offences charged against him, in my view, the petitioner cannot be denied the relief under Section 482 of Cr.P.C. - the prosecution initiated against the petitioner deserves to be quashed. Petition allowed.

Summary

Issues Involved:
1. Whether on account of exoneration of the petitioner by the adjudicating authority, criminal prosecution launched against petitioner on the same set of facts and circumstances can be allowed to continue?
2. Whether respondent has made out sufficient grounds for prosecution of the petitioner for the alleged offence?
3. Whether petitioner is entitled for the relief under section 482 of Cr.PC?

Detailed Analysis:

Issue 1: Exoneration and Continuation of Criminal Prosecution

The petitioner was accused of fraudulent export of garments and mis-declaring the GSM of the fabric to avail ineligible duty-free import benefits under the DFIA Scheme. Investigations led to the imposition of a penalty on the petitioner under section 114(iii) of the Customs Act. The petitioner was exonerated by the CESTAT in two separate appeals concerning 50 and three shipping bills, respectively. The Tribunal found no documentary evidence linking the petitioner to the fraudulent exports and held that the charges were baseless. The Tribunal emphasized the lack of material evidence against the petitioner, noting that the confessions of co-accused alone were insufficient to substantiate the charges.

The Supreme Court in 'Radheshyam Kejriwal v. State of West Bengal' established that exoneration on merits in adjudication proceedings precludes criminal prosecution on the same facts due to the higher standard of proof required in criminal cases. Since the petitioner was exonerated on merits, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue. Therefore, the proceedings against the petitioner are liable to be quashed.

Issue 2: Sufficient Grounds for Prosecution

The prosecution relied mainly on the confessional statements of co-accused to substantiate the charges against the petitioner. The Supreme Court in 'Haricharan Kurmi v. State of Bihar' held that a confession by a co-accused cannot be treated as substantive evidence against another accused. The proper approach is to consider other evidence first and then use the confession to lend assurance to the conclusion drawn from the other evidence. In this case, there was no other material evidence against the petitioner besides the confessions of co-accused. Consequently, the prosecution lacks sufficient grounds to proceed against the petitioner for the alleged offence.

Issue 3: Relief under Section 482 of Cr.PC

The respondents argued that the petitioner, having remained absconding, is not entitled to discretionary relief under section 482 of Cr.PC. However, the petitioner was residing in Dubai, and there was no record of any proclamation issued by the trial court seeking coercive action against him. The court held that it would be improper to deny relief solely on the ground of non-surrender, especially when the material collected by the investigating agency is insufficient to make out a case for prosecution. Therefore, the petitioner is entitled to relief under section 482 of Cr.PC.

Conclusion:

The petition is allowed, and the proceedings in C.C. No. 210/2014 on the file of the Principal Sessions Judge, Dakshina Kannada, Mangalore, are quashed insofar as the petitioner (Accused No. 2) is concerned.