2020 (3) TMI 205 - HC - Customs

Smuggling - Gold Bars - Bailable offence or not - Section 135 of the Customs Act, 1962 - HELD THAT - The fact is not disputed that the market price of the goods seized does not exceed one crore of rupees. Nowhere in the counter affidavit has it been stated that the gold that was seized from the applicant belongs to the category of prohibited goods duly notified by the Central Government, nor has it been stated that evasion or attempted evasion of duty exceeds fifty lakh rupees. Further, no fraud has been alleged as referred in clause (d) of sub-section (6) of Section 104 - there is a merit in the contention of the learned counsel for the applicant that the offence is a bailable offence as provided in sub-section (7) of Section 104 of the Customs Act. It is no longer res integra that the right to claim bail as provided under Section 436 Cr.P.C. in a bailable offence is an absolute and indefeasible right and in such offences there is no question of discretion in granting bail as the words of Section 436 are imperative - Application allowed.

Summary

Issues:
Bail application for release in a case under Section 135 of the Customs Act.

Analysis:

1. Bail Eligibility Criteria:
The applicant filed a bail application under Section 135 of the Customs Act, seeking release in a case involving the recovery of gold bars. The value of the gold recovered was below ?1,00,00,000, and the proceedings did not indicate coverage under sub-section (6) of Section 104 of the Customs Act. The defense argued that based on the recovery memo, the offense was bailable under sub-section (7) of Section 104, citing a previous judgment supporting a similar case.

2. Prosecution's Argument:
The Customs & Central Excise counsel opposed the bail application, referring to a previous order where bail was denied in a similar matter. However, it was acknowledged that the present case fell under Section 104(7) of the Customs Act.

3. Interpretation of Section 104:
Section 104 of the Customs Act delineates the arrest powers and bailability of offenses. Sub-sections (4) to (7) specify the cognizability and bailability criteria for different offenses under the Act. To establish cognizability, the prosecution must show the involvement of prohibited goods or evasion of duty exceeding fifty lakh rupees. For non-bailability, the offense must align with the criteria listed under sub-section (6).

4. Burden of Proof and Smuggling Allegations:
The counter affidavit highlighted that the recovered gold was smuggled from Bangkok, emphasizing the burden of proof on the accused to demonstrate the legality of the gold's possession. The prosecution failed to establish that the seized gold was either prohibited goods or involved evasion exceeding fifty lakh rupees, as required under Section 104(6).

5. Bail Granting Criteria:
The court emphasized that in bailable offenses, like the one in question, the right to claim bail is absolute and non-discretionary. While concerns were raised about ongoing investigations, the Supreme Court's precedent outlined conditions for bail cancellation. The court also considered a previous judgment supporting the grant of bail in similar circumstances.

6. Decision and Conditions:
After evaluating the arguments and legal provisions, the court granted bail to the applicant, Chaman Kumar Shah, in the case under Section 135 of the Customs Act. The release was subject to furnishing a personal bond with two sureties of the same amount, with verification of identity and residence proofs for all parties involved.

7. Final Clarification:
The court clarified that the bail order was specific to the current application and should not be misconstrued as reflecting the case's ultimate merits. The decision solely pertained to the bail application's disposal without prejudicing the case's final outcome.