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2018 (6) TMI 206 - HC - CustomsBail Application - Evasion of duty - Detention of CHA - fraud involving the scrips - Section 3(1) of the COFEPOSA Act - the allegation against the Detenue is that he was engaged in utilizing the tampered, fictitious, non-existent licenses/scripts by hatching a scheme with Mr Vinod Kumar Pathror. He was alleged to have fraudulently entered wrong details in the Customs EDI System after illegally gaining access to the system. Held that - It is not a simple case where the Detenue could have just hacked into the EDI System of Customs and tampered with the details the licenses, as is alleged. Unless the officers of the Customs Department were themselves involved, which angle is still under investigation, it is difficult to accept that the Detenue was the one who was involved in the racket of tampering with the licenses. Further, co-accused Mr Vinod Kumar Pathror is still said to be a PO. Absence of live link with the alleged tampering of the licenses - there does not appear to have been any prejudicial activity undertaken by the Detenue which has been referred to in the grounds of detention. The non-considering of vital facts which have a bearing on whether the Detenue should continue to be detained would vitiate the entire detention order. There is merit in the contention that the sponsoring authority erred in not referring to the various circulars issued by the Commissionerate which demonstrates how the verification of the genuineness of the scripts was to be done. Without the participation of various customs officers, it would have not been possible to hack the system and tamper with the details concerning the scripts/licenses. There being a two-layer verification process by means of a secret password allotted to the Superintendent, it would have been impossible for an individual to tamper with or hack into the system. The exact manner of tampering with the system has not been explained. Since no past antecedents of the Detenue have been pointed in the grounds of detention, there was no material to support the conclusion that the Detenue possesses the propensity or potentiality to indulge in smuggling activities in the future. The detention order is held to be bad in law and is hereby quashed - petition allowed.
Issues Involved:
1. Validity of the detention order under Section 3(1) of the COFEPOSA Act. 2. Alleged fraudulent activities by the Detenue. 3. Delay in issuing the detention order. 4. Non-consideration of relevant factors by the Detaining Authority. 5. Potential for continued prejudicial activities by the Detenue. Detailed Analysis: 1. Validity of the Detention Order: The petition challenged the detention order No. F. No. PD/12002/01/2017-COFEPOSA dated 2nd January 2018, issued under Section 3(1) of the COFEPOSA Act, which ordered the detention of the Detenue in Tihar Jail. The Court found that the detention order lacked a live link with the alleged activities, which were discovered on 15th September 2015, and there was no prejudicial activity by the Detenue between then and the issuance of the detention order on 2nd January 2018. 2. Alleged Fraudulent Activities by the Detenue: The Detenue, a Customs House Agent, was accused of engaging in fraudulent activities involving tampered, fictitious, and non-existent licenses/scripts. The grounds of detention alleged that the Detenue, in collusion with Mr. Vinod Kumar Pathror, fraudulently accessed the Customs EDI System to register and misuse these licenses/scripts. However, the Court noted that the Customs EDI System is highly secure, requiring multiple layers of verification and passwords, making it implausible for the Detenue to hack the system without internal collusion from customs officers, which was still under investigation. 3. Delay in Issuing the Detention Order: The Court highlighted the significant delay between the discovery of the alleged fraudulent activities on 15th September 2015 and the issuance of the detention order on 2nd January 2018. Citing the Supreme Court's decision in T.A. Abdul Rehman v State of Kerala, the Court emphasized that the delay lacked a satisfactory explanation, breaking the causal connection required for justifying preventive detention. 4. Non-Consideration of Relevant Factors by the Detaining Authority: Several vital factors were not considered by the Detaining Authority: - The payment of ?2.59 crores by the Detenue under protest in September 2015. - The revocation of the suspension of the Customs Broker License of M/s Kirti Cargo, which noted that the G-Card holder involved in the transaction was Mr. Diwakar Sharma, not the Detenue. - The proceedings before the learned CMM, which showed that the Detenue was not deliberately avoiding summons. - The SCN dated 20th December 2017, which indicated that the licenses/scripts were used by Mr. Diwakar Sharma, not the Detenue. 5. Potential for Continued Prejudicial Activities: The Court found no convincing evidence to support the claim that the Detenue had the potential to continue committing fraudulent acts. The secure nature of the Customs EDI System and the absence of valid scripts beyond 2nd January 2018 undermined the argument that the Detenue could engage in similar activities if released. The Court noted the lack of past antecedents indicating a propensity for future smuggling activities. Conclusion: The Court concluded that there was no legal justification for the Detaining Authority to pass the impugned detention order against the Detenue. Consequently, the detention order dated 2nd January 2018 was quashed, and the Detenue was ordered to be released forthwith. The writ petition was allowed with no order as to costs, and a copy of the judgment was directed to be given to the parties.
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