A case of afterthought based on favorable decision in criminal proceedings- no relief in respect of duty, penalty and fine paid and matter attained finality.

[C.A. DEV KUMAR KOTHARI]

 

Relevant case law:

Subhash Muljimal Gandhi Versus Union of India & Others [2011 -TMI – 202593- DELHI HIGH COURT].

Facts of the case:

The writ petitioner is a Non Resident Indian settled in Dubai since 1959.

When the petitioner  arrived from Dubai to IGI Airport, Delhi on 2nd October, 1997 ,125 pieces of gold biscuits weighing 14.575 kgs valued at 67,04,500/- and misc. goods valued at Rs. 37,200/- were recovered and seized from him. 

The petitioner had submitted his reply and after considering the reply and contentions raised by the petitioner, the adjudicating authority vide order No. 41/98 dated 11th January, 1998 ordered absolute confiscation of 125 gold biscuits weight 14.575 valued at 67,04,500/- under Section 111(d) and 111(l) of the Act.

The adjudicating authority had also ordered confiscation of misc. goods valued at Rs. 37,200/- but gave option to the petitioner to redeem the same on payment of redemption fine of Rs. 50,000/-.

Personal penalty of Rs. 5 lakhs was imposed on the petitioner under Section 112(a)(b) of the Act.

Thereafter the petitioner preferred an appeal which was dismissed by the Commissioner (Appeal) by the order dated 24th May, 2005.

On such dismissal of the appeal, the petitioner preferred a revision petition which was decided vide order No. 358/05 dated6th December, 2005 and the Central Government modified the order in original dated11th January, 1998and an provided further  option to the petitioner to redeem the seized gold on payment of redemption fine of Rs. 10.5 lacs. The personal penalty of Rs. 5 lacs was upheld. 

The petitioner for complying the order passed by the Central paid the redemption fine on 10th January, 2006 of Rs. 53,55,688/- @ 55% of the gold value. At that time he did not question and challenge the order of the Central Government dated 6th December, 2005. Thus the petitioner paid the custom duty, redemption fine and personal fine and redeemed the confiscated gold. In a way petitioner accepted the order of the Central Government. It is not a case made out that the petitioner made payment without prejudice and subject to his rights of appeal on any ground.

Criminal prosecution was also launched against the petitioner. However he was ‘acquitted’ in the criminal prosecution.  The reasons and grounds for such acquittal are not mentioned in the judgment. It may be that in view of penalty imposed and paid the petitioner was acquitted.

When the petitioner was acquitted in criminal proceedings, he made the present Writ petition before the High court of Delhi.

Case made out before the High Court in WP:

That he was monitored right from the aerobridge and intercepted at the baggage belt and thus prevented from approaching the Red Channel Counter to declare the goods and to pay the duty.

That the petitioner was not served with the show cause notice and the petitioner had not authorized Mr. A.K. Srivastava, Advocate to file reply.

That he has been ‘acquitted’ in the criminal prosecution.

Custom Departments case:

The case of the respondent, Department of Customs, is that the petitioner had not declared the said goods, and the same were confiscated as smuggled goods. 

Per author:

It is not case of the petitioner that he paid the amount demanded under protest or subject to further determination by appropriate authority.

Thus the petitioner has tried to make out a case that due to reasons beyond his control he was prevented from declaring goods and paying duty. That an unauthorized advocate had filed a reply.  However, he forgot the fact that he had paid the amount as demanded after the disposal of revision by the Central Government. An advocate may not be authorized for any particular manner but it cannot be case that the Advocate also paid money on behalf of client and that too unauthorized.  That he had taken the gold on payment of the amount. Therefore, it is a case of afterthought based on outcome in criminal proceedings.

Courts views:

 The contention of the petitioner that he was not served with the show cause notice dated 24th March, 1998 does not impress us.

One Mr. A.K. Srivastava, Advocate had filed a reply to the show cause notice.

 It is stated in the order/letter dated19th May, 2010 of the Joint Commissioner of Customs that personal hearing was given to the petitioner which was also attended by Mr. A.K. Srivastava, Advocate.  (per author: this means that the Advocate was authorized or in any case the matter was also represented personally by the petitioner)

In case the petitioner was not served with the show cause notice and the petitioner had not authorized Mr. A.K. Srivastava, Advocate to file reply, he would have raised the said contention in the appeal and the revision. (per author: Any objection was not raised at those stages or proceedings).

The petitioner has complied with the order passed by the Central Government dated 6th December, 2005 and paid the redemption fine on 10th January, 2006 of Rs. 53,55,688/- @ 55% of the gold value.

The petitioner did not question and challenge the order of the Central Government dated6th December, 2005 till the filing of the present writ petition in 2011.

What has prompted the petitioner to file the present petition is the fact that he has been ‘acquitted’ in the criminal prosecution.

The finding of the Court:

The criminal prosecution is a separate proceeding.

The standard of proof required is different in case of Criminal Proceedigns.

 Indian Evidence Act is applicable to criminal prosecution and Code of Criminal Procedure 1973 applies.

Copy of the order passed by the learned ACMM ‘acquitting’ the petitioner has not been placed on record. (per author: thus, the Court was not provided with the reasons and grounds for acquittal – in case there were some favorable findings, the petitioner should have filed the order of ACMM acquitting the petitioner of criminal charges)

Proceedings under Sections 111 and 112 of the Act have attained finality and the petitioner paid the penalty and redemption fine in 2006.

Gold was released thereafter. 

Court heard Mr. Subhash Mujlimal Gandhi, who has appeared in person and has raised various contentions as discussed in this article earlier.

The court held that “We do not find any merit in the present petition and the same is dismissed in limine.

Learning from this case:

The petitioner should have contested the case properly from the first stage itself. However, it may be that he was disparate to get the gold to meet his commitments. May be that he had fears from the parties for whom he brought the gold as well as from customs and police authorities  and to avoid delay in getting gold and also tortures, he surrendered and paid the money demanded.  However, if properly advised, perhaps he could have made a case of making the payments under protest and without prejudice and continued the proceedings to contest his case properly and timely.

Subhash Muljimal Gandhi Versus Union of India & Others [2011 -TMI - 202593 - DELHI HIGH COURT]