2022 (6) TMI 16 - HC - Customs

Seeking grant of bail - export of fake jewellery by mis-declaring the same as gold jewellery with respect to the past consignment - substantive evidences or not - retraction of statements - offences under Section 135(1)(b) and 135 (1)(ia) of Customs Act, 1962 - HELD THAT - This Court is of the view that merely the Custom Department has cleared the goods it will not take away the cloud in those transactions, without interrogating the importer in Dubai from the petitioners during the relevant point of time. To verify whether the earlier consignments sent to the Dubai customer was really 22 carat gold jewels is subject matter of probe. Also it is necessary to probe into the mode of layering by which the money sent to Dubai Company through Non-Banking Source. The observation of the Bombay High Court in MR. BIHARILAL SINGHAL VERSUS THE UNION OF INDIA AND OTHERS 2010 (4) TMI 136 - BOMBAY HIGH COURT , which says for the demand of the past imports revenue cannot withhold the current consignment and in the absence of any position action by issuing show cause notice hence no relevancy, since it is not a case of action without show cause notice nor withholding of present consignment for recovery of old demand of duty in respect of goods already assessed and exported - Similarly, in SANJAY CHANDRA VERSUS CBI 2011 (11) TMI 537 - SUPREME COURT and GOVIND GOPAL GOYAL VERSUS STATE OF GUJARAT 1 2017 (11) TMI 309 - GUJARAT HIGH COURT , bail in these sorts of cases were dealt in terms of facts and circumstances of those cases and it is for the Courts to balance the Nations economic interest as against the individual personal liberty. Not in all cases, the period of incarceration alone matters, the stage of investigation, the ramification of the crime its network and the possibility of screening vital links, if the petitioners are let out on bail are the factors to be taken into consideration. In the instant case, the release of petitioners on bail is not conducive for investigation and therefore, petition for bail is dismissed. Considering the ramification of the offence and the design conceived by the petitioners herein to evade custom duty, without any interference requires investigation. The release of these petitioners will lead to tampering the witnesses - Petition dismissed.

Summary

Issues:
1. Alleged offences under Section 135(1)(b) and 135(1)(ia) of Customs Act, 1962.
2. Illegal diversion of duty-free imported gold to the domestic market.
3. Accusations of exporting fake jewelry misdeclared as gold jewelry.
4. Reliance on judgments to support arguments.
5. Concerns about destruction of evidence and interference with investigation if petitioners are released on bail.

Detailed Analysis:

Issue 1: The prosecution alleged that the petitioners were arrested for offenses under Section 135(1)(b) and 135(1)(ia) of the Customs Act, 1962, related to the illegal diversion of duty-free gold to the domestic market. The case involved the procurement of gold bullion under a scheme for export but diverting it for unauthorized purposes.

Issue 2: The petitioners were accused of procuring duty-free gold bullion and diverting it to the domestic market through the export of fake jewelry. The investigation revealed a scheme where gold bars were diverted from their intended export purpose, causing a significant loss to the government exchequer.

Issue 3: The prosecution contended that the petitioners exported fake jewelry misdeclared as genuine gold jewelry, with evidence of weight discrepancies and misdeclaration in shipping documents. The diversion of duty-free gold to the domestic market was allegedly covered up through fake transactions and illegal channels.

Issue 4: The defense relied on specific judgments to support their arguments for bail, emphasizing compliance with statutory obligations and proper accounting practices. However, the prosecution countered by highlighting evidence from manufacturers and the diversion of gold bars for unauthorized purposes, undermining the defense's claims.

Issue 5: The court dismissed the bail petitions, citing concerns about the potential destruction of evidence and interference with the ongoing investigation if the petitioners were released. The court emphasized the need to prevent tampering with witnesses and preserve the integrity of the investigation due to the complexity and ramifications of the alleged offense.