2006 (2) TMI 182 - HC - Customs

Issues Involved:
1. Validity of judicial remand under Sections 132 and 135(1)(a) of the Customs Act.
2. Whether the accused committed any offence under the Customs Act.
3. Role of the proprietors/partners in the alleged embezzlement.
4. Investigation omissions by Customs officers.
5. Authority of ACMM to direct further investigation.
6. Double jeopardy claim by the accused.
7. Jurisdiction of Customs versus police in investigating the case.

Detailed Analysis:

1. Validity of Judicial Remand under Sections 132 and 135(1)(a) of the Customs Act:
The accused was remanded to judicial custody by the ACMM for alleged offences under Sections 132 and 135(1)(a) of the Customs Act. The Customs sought an extension of this remand, which was contested by the accused on the grounds that no such offence was committed. The ACMM found that the allegations did not substantiate an offence under these sections as there was no actual export of goods, which is a prerequisite for a duty drawback claim.

2. Whether the Accused Committed Any Offence under the Customs Act:
The ACMM observed that the allegations did not constitute an offence under Sections 135 or 132 of the Customs Act. The accused was alleged to have forged shipping bills to claim duty drawbacks without any actual export. The ACMM noted the absence of actual export and concluded that the accused could not be charged under the specified sections of the Customs Act based on the presented allegations.

3. Role of the Proprietors/Partners in the Alleged Embezzlement:
The ACMM criticized the investigation for not examining the roles of the proprietors/partners of the firms involved. The investigation had not looked into how the shipping bills of other firms were used for claiming duty drawbacks by Punit Exports and other firms, and how such discrepancies escaped the notice of Customs officers.

4. Investigation Omissions by Customs Officers:
The ACMM highlighted significant omissions in the investigation, particularly the failure to investigate the involvement of Customs officers and the verification process of the claim papers. The ACMM noted that the total embezzled amount was around Rs. 1 crore and pointed out potential forgeries of rubber stamps and signatures of Customs officers.

5. Authority of ACMM to Direct Further Investigation:
The accused argued that the ACMM, having taken cognizance of the offence, could not order further investigation. However, the ACMM clarified that she had the power under Section 190(c) of the Cr.P.C. to direct an investigation. The court upheld the ACMM's authority to direct further investigation, referencing Section 156(3) Cr.P.C., which allows a Magistrate to order an investigation.

6. Double Jeopardy Claim by the Accused:
The accused contended that he could not be subjected to double jeopardy, arguing that while an investigation was already being conducted by Customs, another investigation by DCP (Crimes) was initiated. The court did not find merit in this argument, emphasizing the need for a thorough investigation given the seriousness of the crime.

7. Jurisdiction of Customs versus Police in Investigating the Case:
The court deliberated on whether the investigation should be conducted by Customs or the police. It was noted that fraudulent duty drawbacks are offences under the Customs Act, as established in the case of Sanjeev Kumar Gupta v. Commissioner of Customs. However, the court distinguished the present case, where the issue was the forgery of shipping bills without any actual export, from cases involving misdescription of goods. The court upheld the ACMM's decision to transfer the investigation to the Crime Branch, emphasizing the need for a comprehensive investigation by a higher authority due to the involvement of substantial government funds.

Conclusion:
The court dismissed both revision petitions, upheld the ACMM's order directing the investigation to be handled by the Crime Branch, and emphasized the necessity for a thorough and expeditious investigation. The stay orders on the investigation were lifted, and the police were directed to proceed with the investigation without further delay.

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