2008 (1) TMI 157 - HC - Customs

Petition to quash criminal complaint u/s 132 & 135(1)(a) - remedy of seeking immunity from prosecution from the Settlement Commission is available only before the initiation of prosecution proceedings by the Customs Dept., not after initiation - application for compounding of the offences under the Act can be made either before or after institution of prosecution to the compounding authority since assessee failed to avail this statutory remedy for seeking compounding, petition is dismissed

Summary

Issues:
Seeking quashing of a criminal complaint under Sections 132 and 135(1)(a) of the Customs Act, 1962 pending against the petitioners.

Analysis:
The petitioners sought to quash a criminal complaint under Sections 132 and 135(1)(a) of the Customs Act, 1962, pending against them in the Court of Addl. Chief Metropolitan Magistrate, New Delhi. The Directorate of Revenue Intelligence (DRI) investigated the petitioners for importing electronic goods from Hong Kong at undervalued prices. The DRI issued notices demanding customs duty from the petitioners, who then approached the Settlement Commission and agreed to pay the demanded amount. The Settlement Commission granted immunity from penalty and fine but not from prosecution, as the criminal complaint had already been filed. The petitioners argued for quashing the complaint, citing a Supreme Court judgment and alleging abuse of judicial process. The respondent contended that since the prosecution was initiated before the Settlement Commission application, immunity from prosecution could not be granted. The court considered both arguments.

The court acknowledged that seeking immunity from prosecution before the Settlement Commission is only possible before the initiation of criminal proceedings. The petitioners did not avail of this remedy before the prosecution was launched, and the Settlement Commission rightly did not grant immunity from prosecution. However, the court highlighted the provision for seeking immunity even after prosecution initiation through Customs (Compounding of Offences) Rules, 2005. These rules allow offenders to apply for compounding of offences before or after prosecution, subject to payment of a compounding fee. The petitioners could have approached the compounding authority for compounding the offences they were prosecuted for, but they failed to do so. Consequently, the court dismissed the petition due to the petitioners' failure to utilize the statutory remedy available for seeking compounding of the offences.

Regarding the jurisdictional issue raised by the petitioners, questioning the Delhi court's jurisdiction over the complaint, the court held that this matter could be raised before the trial court where the complaint is pending trial. The Department argued that the final destination of the undervalued goods imported by the petitioners was in Delhi. As conflicting factual claims existed, the court determined that this jurisdictional issue should be addressed during the trial proceedings rather than in the current petition under Section 482 Cr.P.C. Therefore, the petitioners did not succeed on this ground either. No other points were raised, and the court dismissed the petition, suggesting that the petitioners could still approach the Compounding Authority under the Compounding Rules of 2005 for seeking compounding of the offences they were being prosecuted for.