2017 (1) TMI 1271 - HC - Customs

Jurisdiction - Evasion of duty - smuggling - Section 104(4) of the Customs Act - Held that - Section 104(4) of Customs Act, 1962 clarifies that the offence relating to prohibited goods or evasion or attempted evasion of duty exceeding fifty lakh rupees shall be cognizable - The offence in question comes within the provisions of Section 104(4) of the Customs Act. If it is so, the officer of Customs empowered by general or special order of the Principal Commissioner of Customs may arrest such person and shall, as soon as may be inform him of the grounds for such arrest. In view of the aforementioned legal position, it is not open for Mr.Shajahan Thayyil to contend that he may not be arrested before completion of investigation. The law empowers the investigating officer to arrest such person and thereafter inform him of the grounds for such arrest - appeal allowed - decided in favor of Revenue.

Summary

Issues:
1. Interpretation of Section 104(4) of the Customs Act, 1962 regarding the arrest of a person in relation to evasion of duty exceeding a specified amount.
2. Validity of the direction given by the learned Single Judge for the arrest of the accused only after issuing notice.

Analysis:
The judgment in question pertains to two appeals filed before the High Court of Kerala. The first appeal, W.A No.1668 of 2016, was filed by the Inspector of Customs, while the second appeal, W.A No.2227 of 2016, was filed by Mr. Shajahan Thayyil, the accused in a case registered by the Customs Preventive Commissionerate. The case involved the recovery of foreign-origin cigarettes concealed inside sofa sets, with a total market value of 1.585 Crores. The investigation revealed that Mr. Shajahan Thayyil and another individual aided and abetted the main offender in the smuggling operation. Despite repeated summonses, Mr. Shajahan Thayyil failed to appear before the investigating officer, leading to the issuance of a lookout notice.

Regarding the interpretation of Section 104(4) of the Customs Act, 1962, the court emphasized that the offense in question, involving evasion of duty exceeding &8377;50 lakhs, falls under the category of cognizable offenses as per the said provision. The law empowers the customs officer to arrest such a person and inform them of the grounds for the arrest. Therefore, the contention raised by Mr. Shajahan Thayyil that he should not be arrested before the completion of the investigation was deemed untenable. The court held that the investigating officer had the authority to arrest the accused based on the legal provisions.

In the context of the direction given by the learned Single Judge for the arrest of Mr. Shajahan Thayyil only after issuing notice, the High Court set aside this direction. The court ruled that the investigating officer had the power to arrest the accused as per the provisions of the Customs Act, and therefore, the earlier direction restricting the arrest was overturned. Consequently, the appeal filed by the Inspector of Customs was allowed, and the appeal filed by Mr. Shajahan Thayyil was dismissed.

In conclusion, the judgment clarified the legal position regarding the arrest of individuals in cases of duty evasion exceeding a specified amount under the Customs Act, emphasizing the authority of customs officers to make arrests in such situations.