2007 (8) TMI 348 - HC - Customs

Prosecution - Commencement of proceedings - whether proceedings for prosecution for any such offence within the meaning of Section 127H of the Customs Act 1962 are deemed to have commenced on the date of registration of FIR or when challan is presented before the Magistrate? Held that - FIRs in this case were registered on 12-7-2004 and 3-4-2005 and the application under Section 127B of the Act was filed before the Settlement Commission-respondent No. 3 on 31-1-2006. The challans were presented on 6-3-2006 and 27-3-2006 which are obviously after the date of filing of application under Section 127B of the Act. Therefore the impugned order dated 14-9-2006 (P-5) passed by the Settlement Commission-respondent No. 3 is not sustainable to the extent it refuses to grant immunity to the petitioner from prosecution. Thus this petition succeeds. The order dated 14-9-2006 in so far as it refuses to grant immunity to the petitioner for prosecution (P-5) is hereby quashed. The petitioner is accordingly granted immunity exercising power under proviso to Section 127H of the Act which shall remain subject to other provisions of Section 127H of the Act.

Summary

Issues Involved:
1. Interpretation of "proceedings for prosecution" under Section 127H of the Customs Act, 1962.
2. Whether the registration of an FIR constitutes the commencement of prosecution proceedings.
3. The applicability of immunity from prosecution by the Settlement Commission.

Detailed Analysis:

1. Interpretation of "proceedings for prosecution" under Section 127H of the Customs Act, 1962:
The central issue in this case is the interpretation of the phrase "proceedings for prosecution for any such offence" within the meaning of Section 127H of the Customs Act, 1962. The court examined whether these proceedings are deemed to have commenced on the date of registration of the FIR or when the challan is presented before the Magistrate. The Settlement Commission had concluded that the proceedings commenced with the registration of the FIRs.

2. Whether the registration of an FIR constitutes the commencement of prosecution proceedings:
The court delved into the procedural aspects outlined in the Code of Criminal Procedure (Cr.P.C.). It was highlighted that mere registration of an FIR does not necessarily result in the initiation of prosecution proceedings. The court noted that an FIR leads to an investigation, and it is only upon the presentation of a challan (charge sheet) under Section 173(2) Cr.P.C. that the Magistrate takes cognizance of the offence, thereby initiating prosecution proceedings. The court observed that the final decision to prosecute lies with the Magistrate, who may or may not accept the police report. This principle was supported by several judgments, including *Abhinandan Jha v. Dinesh Mishra*, *H.S. Bains v. U.T. Administration Chandigarh*, and *State of Orissa v. Habibullah Khan*.

3. The applicability of immunity from prosecution by the Settlement Commission:
The court examined Section 127H of the Customs Act, which empowers the Settlement Commission to grant immunity from prosecution if the applicant has cooperated and made a full and true disclosure of duty liability. However, the proviso to Section 127H states that no immunity shall be granted if proceedings for prosecution have been instituted before the date of receipt of the application under Section 127B. The court concluded that the expression "proceedings for prosecution" implies magisterial intervention and thus begins when a charge sheet is presented before the Magistrate. Since the challans in this case were presented after the application under Section 127B was filed, the court held that the Settlement Commission erred in refusing to grant immunity from prosecution.

Conclusion:
The court allowed the petition, quashing the Settlement Commission's order to the extent it refused to grant immunity from prosecution. It was held that the proceedings for prosecution commence with the presentation of the charge sheet before the Magistrate, not the registration of the FIR. Consequently, the petitioner was granted immunity from prosecution under Section 127H of the Customs Act, subject to other provisions of the Act.