2020 (6) TMI 753 - HC - Customs

Unaccompanied baggage - main legal contention set up by the petitioners was that though sanction was obtained under Section 19 of the Prevention of Corruption Act the prosecuting agency did not comply with the procedure under section 155 of the Customs Act - HELD THAT - In COSTAO FERNANDES VERSUS STATE AT THE INSTANCE OF DSP. CBI BOMBAY 1996 (2) TMI 137 - SUPREME COURT a customs officer faced prosecution for offence under section 302 IPC for killing a smuggler by shooting with official revolver who had attempted to flee with smuggled gold while being intercepted by the above customs officer. The defence set up was that he was entitled for protection under section 155 of the Customs Act. Holding that Section 155 has nexus with the official duty of the petitioner and analysing the conduct of the petitioner in the background of section 106 of the Customs Act it was held that facts disclosed that the petitioner caused the death of the smuggler while discharging his official duties. Hon ble Supreme Court held that the petitioner was entitled for protection under section 155 and consequently the proceeding was quashed. In an identical situation the learned Single Judge of Delhi High court in ATUL DIKSHIT VERSUS C.B.I. 2017 (1) TMI 1308 - DELHI HIGH COURT and another judge of Rajasthan High Court in RAVINDRA KUMAR S/O SH. RAMESHWAR LAL VERSUS UNION OF INDIA 2016 (11) TMI 468 - RAJASTHAN HIGH COURT took views contrary to the views of Calcutta High Court and Punjab and Haryana High Court discussed above. In both the above cases respective accused challenged the prosecution alleging breach of section 155 (2) of the Customs Act - it was noticed by the learned single judge that section 40 of the Central Excise Act 1944 had undergone drastic amendment in 1973. It was noticed that though section 40 (2) of the Excise Act after amendment of 1973 was in pari materia with section 155 (2) of the Customs Act S. 40(2) prior to amendment it was not. However Supreme Court proceeded as if both were in pari materia. It was held that sub section (2) of Section 40 of Central Excise and Salt Act 1944 which existed prior to 1973 was not at all in pari materia with section 155(2) of the Customs Act 1962. The learned Single Judge proceeded to hold that the words no proceeding appearing on sub section (2) of section 155 of the Customs Act do not include criminal prosecution as for the protection pertaining to prosecution there was a specific provision under sub section (1) of section 155 of the Customs Act. Section 155 (1) uses the words suit prosecution or other legal proceedings . Evidently each word is expressed independently and each is used to express one in contra distinction with another. Clearly when the above expressions are used to denote three separate category of proceedings and when statute has explicitly used prosecution or other legal proceedings separately to denote separate proceedings it is evident that Parliament was conscious that the term other legal proceedings does not include a prosecution under the Criminal Law. The contention of the learned counsel for the petitioners that the prosecution of the petitioners is bad for non compliance of section 155 (2) of Customs Act is not sustainable and is rejected - Application dismissed.

Summary

Issues Involved:
1. Allegations of criminal conspiracy and corruption by customs officials.
2. Validity of the prosecution under the Prevention of Corruption Act.
3. Compliance with Section 155 of the Customs Act.
4. Validity of the charges based on evidence and procedural grounds.

Detailed Analysis:

1. Allegations of Criminal Conspiracy and Corruption by Customs Officials:
The petitioners, who were customs officials, were accused of conspiring with clearing agents to clear non-bonafide unaccompanied baggages at nominal customs duty, thereby causing significant tax evasion. The prosecution alleged that the customs officials allowed the clubbing of multiple parcels under a single NRI's name, releasing them without proper verification and levying minimal customs duty. The modus operandi involved clearing agents booking entire consignments in the name of NRIs and customs officials imposing nominal fees, thus facilitating tax evasion.

2. Validity of the Prosecution under the Prevention of Corruption Act:
The petitioners contended that the prosecution was invalid due to the non-compliance with Section 155 of the Customs Act, which mandates a one-month notice before initiating proceedings against customs officials. They argued that the sanction under the Prevention of Corruption Act did not obviate the need for compliance with Section 155 of the Customs Act. The court, however, held that the prosecution was valid as the sanction was granted by the competent authority after due application of mind, and the allegations were substantiated by substantial evidence, including oral testimonies and documentary materials.

3. Compliance with Section 155 of the Customs Act:
The petitioners argued that the prosecution was invalid due to non-compliance with Section 155(2) of the Customs Act, which requires a one-month notice before proceeding against customs officials. The court analyzed the statutory provisions and judicial precedents, concluding that Section 155(2) does not apply to criminal prosecutions. The court held that the term "proceedings" in Section 155(2) refers to civil proceedings and not criminal prosecutions. Therefore, the prosecution under the Prevention of Corruption Act was not barred by Section 155(2) of the Customs Act.

4. Validity of the Charges Based on Evidence and Procedural Grounds:
The petitioners contended that the charges were based on insufficient and contradictory evidence, particularly relying on the inconsistent statements of one witness, Sivaprasad. They also argued that the customs officials were under tremendous pressure to clear a large number of baggages daily, which could lead to human errors. The court, however, found that the prosecution's case was supported by substantial evidence, including statements from multiple witnesses and documentary materials. The court held that the allegations of undervaluation and the conspiracy among the accused were prima facie substantiated, warranting a full-fledged trial to determine the merits of the case.

Conclusion:
The court dismissed the petitions, holding that the prosecution was valid and not barred by Section 155(2) of the Customs Act. The allegations of criminal conspiracy and corruption were substantiated by substantial evidence, warranting a trial to determine the merits of the case. The court also held that the petitioners could raise their defense under Section 155(1) of the Customs Act during the trial.