2008 (2) TMI 380 - HC - Customs

Drawback fraud Petitioner seeks anticipatory bail - petitioner has rightly pointed out that there is no question of any custodial interrogation since in case of detention, the petitioner has to be sent to judicial remand - Custom Authorities unlike the police cannot take the petitioner into custody for custodial interrogation - anticipatory bail granted subjected to condition that petitioner will cooperate during investigation and release of amount of drawback frozen not be to be sought

Summary

Issues Involved:
1. Anticipatory bail under Section 438 of the Code of Criminal Procedure.
2. Jurisdiction of DRI, Delhi.
3. Alleged violations of the Customs Act, 1962.
4. Bailability of the offense under Section 135 of the Customs Act.
5. Investigation and custodial interrogation requirements.
6. Petitioner's cooperation with the investigation.
7. Petitioner's request for de-freezing the account.

Detailed Analysis:

1. Anticipatory Bail under Section 438 of the Code of Criminal Procedure:
The petitioner, a working partner in a partnership firm, sought anticipatory bail under Section 438 of the Code of Criminal Procedure for alleged violations of the Customs Act, 1962. The petitioner argued that the case pertained to 2003, making an arrest in 2008 unwarranted. The court granted interim protection on the petitioner's undertaking to join the investigation.

2. Jurisdiction of DRI, Delhi:
The petitioner contended that DRI, Delhi had no jurisdiction since the matter related to Mumbai. However, the court noted that DRI, Delhi, as the headquarters, assumes jurisdiction all over India, especially when investigating a larger scam. Thus, the petitioner's case fell within the jurisdiction of DRI, Delhi.

3. Alleged Violations of the Customs Act, 1962:
The petitioner exported consignments to Dubai and Russia and received duty drawbacks. The DRI alleged that the petitioner availed of drawbacks fraudulently, with goods never reaching Russia, violating the Indo-Russia Rupee Rouble Agreement and the Customs Act. Evidence indicated the Russian consignee was fictitious, and goods were diverted to Dubai.

4. Bailability of the Offense under Section 135 of the Customs Act:
The petitioner argued that the offense under Section 135(1)(ii) of the Customs Act was bailable. The court, however, noted that during the alleged export period, the unamended Section 135(1)(ii) prescribed up to three years of imprisonment, making the offense non-bailable. The court referenced previous decisions supporting this view.

5. Investigation and Custodial Interrogation Requirements:
The DRI argued that custodial interrogation was necessary due to the petitioner's non-cooperation and the need for deeper investigation into financial transactions. The court, however, noted that the Customs Authorities could not take the petitioner into custody for custodial interrogation, as they could only place the petitioner in judicial remand.

6. Petitioner's Cooperation with the Investigation:
The petitioner had joined the investigation as per the court's direction and undertook to continue cooperating. The court found no purpose in taking the petitioner into custody, given the five-year-old transaction and the petitioner's compliance with investigation requirements.

7. Petitioner's Request for De-freezing the Account:
The petitioner requested the de-freezing of his account, which was frozen by the DRI in 2003. The court did not address this request directly but included a condition in the bail terms that the petitioner would not seek the release of the remaining frozen Duty Drawback amount until the investigation was completed.

Conclusion:
The court granted anticipatory bail to the petitioner with specific conditions: joining the investigation as required, furnishing a personal bond and surety, not seeking the release of the frozen Duty Drawback amount, and surrendering his passport. The petition was accordingly allowed.