2024 (8) TMI 484 - HC - Customs

Smuggling - gold bars of foreign origin - Section 135(1)(a) (1)(b) of the Customs Act - conversation retrieved through mobile data disclose the active participation of V.Girinath in transporting gold bar illegally - exoneration in the adjudication proceedings - legal impediment for parallel proceedings of adjudication and prosecution or not - HELD THAT - The Law as well the judicial pronouncements is well settled and had made clear that the adjudicating proceedings under the Customs Act and the criminal prosecution under the Customs Act are not in alternate but independent to each other. They can be launched simultaneously. There is no legal impediment for parallel proceedings of adjudication and prosecution. Only in case the adjudication ends in exoneration, the continuation of criminal prosecution will be on the touch stone whether the prosecution is on the same set of facts and for the same act or omission. Otherwise, even the outcome of one will not have bearing on the other. As far the case in hand, the adjudicating authority had held the petitioner liable for penalty. That order is under challenge before High Court, bye-passing the remedy available under the statute (i.e.,) Appeal before the Commissioner (Appeals). Courts can never fail to note the difference between the adjudication proceeding before the Authority of the Department and the prosecution before the Court of Law. Adjudication under Section 112 of the Customs Act is with regard to the property/article smuggled into India. It is an action in personam. Whereas criminal prosecution under Section 135 of the Customs Act is for the offence affecting the economy of the Country. This is an action in rem. One action cannot be a substitute for the other action. This Court holds that the petition to quash the C.C.No.446/2023 on the file of Chief Judicial Magistrate, Coimbatore is devoid of merit. Petition dismissed.

Issues Involved:
1. Smuggling of gold bars by passengers.
2. Validity of the statements and digital evidence.
3. Procedural errors in the criminal prosecution.
4. Relationship between adjudication proceedings and criminal prosecution under the Customs Act.
5. Exoneration in adjudication and its impact on criminal prosecution.

Issue-wise Detailed Analysis:

1. Smuggling of Gold Bars by Passengers:
On 29/04/2022, based on intelligence from the Directorate of Revenue Intelligence, four passengers from Singapore to Coimbatore were intercepted at Coimbatore International Airport. From the baggage of two passengers, 4200 grams of 24-carat pure gold bars of foreign origin were recovered. The passengers, identified as Shri. Tangkesvaran and Smt. Nandhini, did not possess valid documents for carrying the gold into India. During interrogation, they disclosed that they were instructed by V.Girinath, who arranged their travel and provided dummy invoices via WhatsApp.

2. Validity of the Statements and Digital Evidence:
The digital analysis of Tangkesvaran's mobile revealed further information about V.Girinath, leading to a search of his premises. V.Girinath admitted to booking travel tickets but denied instructing Tangkesvaran to collect and distribute the gold bars. However, the retrieved conversation between Tangkesvaran and V.Girinath indicated Girinath's active participation in the smuggling operation. Despite the retraction of statements by Tangkesvaran and Nandhini, the voluntary statement of V.Girinath and the digital evidence were deemed significant.

3. Procedural Errors in the Criminal Prosecution:
The Chief Judicial Magistrate took cognizance of the offence under Section 135 (1)(a) & (1)(b) of the Customs Act. However, there was a procedural error as the Magistrate did not follow the procedure under Section 244 of Cr.P.C. This error was later rectified by the Judicial Magistrate, who issued summons for pre-charge evidence.

4. Relationship Between Adjudication Proceedings and Criminal Prosecution:
The petitioner argued that the criminal prosecution should be quashed as it was based on the same facts as the adjudication proceedings, which were under challenge. However, it was held that the adjudication proceedings and criminal prosecution are independent of each other. The criminal prosecution can proceed simultaneously with the adjudication proceedings. Even if the adjudication ends in exoneration, the continuation of criminal prosecution depends on whether the exoneration was on merits or technical grounds.

5. Exoneration in Adjudication and Its Impact on Criminal Prosecution:
The court referred to several judgments, including Radheshyam Kejriwal vs. State of West Bengal, which established that exoneration in adjudication on technical grounds does not preclude criminal prosecution. Only if the exoneration is on merits and the person is found innocent, the criminal prosecution on the same facts cannot continue. In this case, the adjudicating authority held the petitioner liable for a penalty, and the order was under challenge. The court emphasized the difference between adjudication proceedings (action in personam) and criminal prosecution (action in rem).

Conclusion:
The petition to quash the criminal proceedings was dismissed. The court held that the criminal prosecution under Section 135 of the Customs Act could proceed independently of the adjudication proceedings. The procedural error in taking cognizance was rectified, and the digital evidence and voluntary statements provided sufficient grounds to continue the prosecution. The stay on the adjudication order did not impede the criminal trial, and the petitioner's arguments were found to be without merit.

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