2007 (11) TMI 186 - HC - Customs

Bail application - diverted non edible palm oil to the ghee manufacturers - He obtained license for concessional import of crude palm oil by misrepresentation that it would be used for mfg. of washing soap, depriving the public exchequer of import duty of more than one crore Stupidly first applied for compounding then refused to pay the amount - applicant is in jail & the trial may take some time the applicant is granted bail if applicant deposits 50% of the amount levied as compounding fee

Summary

Issues:
Bail application based on bailable offence, Compounding application, Offence under Section 135(1)(ii) of Customs Act, 1962, Interpretation of Supreme Court orders, White-collar crime involving evasion of custom duty.

Bail Application:
The applicant filed a bail application under Section 439 Cr.P.C., citing recent Supreme Court orders and previous judgments from Punjab and Haryana High Court and Delhi High Court. The applicant argued that the offence committed was bailable under Section 135(1)(ii) of the Customs Act, 1962, and highlighted the compounding application filed to show bonafide intentions. The applicant stressed completion of investigation, minimal risk of tampering with evidence, and the lengthy trial process due to multiple witnesses.

Interpretation of Supreme Court Orders:
The opposing party contended that the Supreme Court order cited by the applicant did not apply to the present case as it was based on amended provisions, while the applicant's case was under unamended provisions. Reference was made to the concept of per incuriam and the necessity to ignore decisions made in such circumstances. The opposing party highlighted the pending status of the issue of whether the offence under Section 135(1)(ii) was bailable or not, emphasizing the lack of a final decision by the Supreme Court.

Compounding Application:
The applicant made a compounding application, which was granted by the Chief Commissioner of Central Excise and Service Tax Delhi Zone. The order allowed compounding of the offence under specific sections of the Customs Act and the Central Excise Act, subject to payment of a substantial amount. The applicant's counsel argued against the compounding, labeling it as a mistake and emphasizing that the applicant was not obligated to compound the offence or pay the hefty fee demanded.

White-Collar Crime:
The judgment detailed the applicant's involvement in a white-collar crime scheme where non-edible palm oil meant for soap manufacturing was diverted and sold to ghee manufacturers, causing a significant evasion of custom duty exceeding Rs.1.25 Crore. The applicant misrepresented the import purpose, fabricated records, undervalued consignments, and deprived the public exchequer of substantial import duty, leading to a severe financial impact.

Decision:
Considering the gravity of the white-collar crime, the applicant's bail was granted on the condition of depositing 50% of the compounding fee with the Chief Commissioner of Central Excise. The judgment highlighted the possibility of returning the amount if the applicant was found innocent after trial or adjusting it against duty payable if found guilty. The applicant was required to execute a personal bond and provide a surety for release on bail, with provisions for adjusting the deposited amount based on trial outcomes.