2018 (10) TMI 44 - HC - Customs

Prosecution proceedings against the customs officers - protection u/s 155 of the customs act - Jurisdiction - whether CBI officer is not proper officer to decide about under valuation? - Jurisdiction of CBI to prosecute the petitioners based on the inference that there is under valuation in the import and loss to the revenue. Held that - It is the responsibility of the 'proper officer' as defined under Section 2 (3A) of the customs Act to assess the invoice value declared by the importers. At the first instance is the DC/AC of customs and Central Exercise Department. To exercise power under Section 28 AAA the proper officer are the Superintendent of customs and Central Exercise and Appraisers for exercising function under Section 28(1) of the Act. The 13 Bills of Entry under scanner, admittedly assessed and value fixed by the proper officers. The prosecution against importer A4 and A5 is for under valuing the goods imported and for evading duty. As against A1 to A3 is for suppressing the reference made by the assessing group about undervaluation, to the controlling officer. Issuing UO letters on their own without the knowledge of the Commissioner thereby to facilitate the importer to clear the goods showing lesser value than the prevailing market value caused unlawful pecuniary advantage - The UO letters issued by A1 to A3 were not part of their duty but created falsely to cheat the exchequer. No element of duty is found in issuing a misleading, false document under the capture UO letter. Hence, Section 155 (2) of the Customs Act have no relevance. Issuing UO letters contrary to Act, rules and Regulations containing falsehood does not attract Section 155 of the Act, to claim protection. Hence, the orders of the trial court dismissing the discharge petitions are liable to be confirmed. Criminal Revision Petitions are dismissed.

Summary

Issues Involved:
1. Criminal conspiracy and cheating under IPC and Prevention of Corruption Act.
2. Authority and jurisdiction of CBI to investigate undervaluation.
3. Procedural compliance under Customs Act.
4. Admissibility and relevance of evidence.
5. Protection under Section 155 of the Customs Act.

Issue-wise Detailed Analysis:

1. Criminal Conspiracy and Cheating under IPC and Prevention of Corruption Act:
The case revolves around allegations that customs officials (A1 to A3) conspired with importers (A4 and A5) to undervalue imported Star Aniseed, causing a loss of ?92,24,730 to the Customs Department. The officials allegedly issued false Urgent Office (UO) Notes to clear undervalued Bills of Entry, constituting offenses under Section 120(b) r/w 420 IPC and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act. The trial court found sufficient material to frame charges based on the statements of witnesses and documents.

2. Authority and Jurisdiction of CBI to Investigate Undervaluation:
The petitioners argued that the CBI is not the proper authority to investigate undervaluation, which is within the purview of customs officials under the Customs Act. The court held that while customs officials assess and levy duties, the CBI has the authority to investigate criminal misconduct, including conspiracy and corruption by public servants, as distinct offenses.

3. Procedural Compliance under Customs Act:
The defense claimed that the customs officials followed the prescribed procedures and guidelines under the Customs Act, and therefore, they are protected under Section 155(2) of the Act. However, the court noted that the UO letters issued by A1 to A3 were not approved by the controlling officers and contained false information, indicating a breach of duty and dishonest conduct.

4. Admissibility and Relevance of Evidence:
The prosecution presented evidence, including the statements of customs officials and data from the National Information Data Base (NIDB) and Directorate of Valuation (DOV), showing that the declared value of the goods was significantly lower than the prevailing market value. The court found this evidence sufficient to support the allegations of undervaluation and conspiracy.

5. Protection under Section 155 of the Customs Act:
The petitioners claimed protection under Section 155, which provides immunity for acts done in good faith under the Act. The court held that issuing false UO letters does not constitute an act done in good faith or in pursuance of the Act. Therefore, the protection under Section 155 is not applicable in this case.

Conclusion:
The court dismissed the criminal revision petitions, confirming the trial court's orders to frame charges against the accused. The court emphasized that the alleged misconduct by the customs officials, including issuing false UO letters without approval, does not attract the protection under Section 155 of the Customs Act. The prosecution's case, supported by witness statements and documentary evidence, was found to be sustainable for trial.