2021 (5) TMI 405 - HC - Customs

Discharge of the accused under the prevention of corruption of act - officers of Central Excise Department - allegation of fraudulent availing the benefit of DEPB (Duty Entitlement Pass Book) Scheme - mis-declaration of export goods - pieces of cloths irregular in shape declared as ladies nightwear - criminal misconduct - offence under Section 13(1)(d) of Prevention of Corruption Act, 1988 - HELD THAT - In the case in hand, in the adjudication proceedings, it is not proved that the Accused were in any way guilty of the act of omission/dereliction of duty or acting in an illegal manner. Consequently, the Accused nos. 1 and 2 were exonerated on the same set of allegations as has been made in the present case in the adjudication proceedings that too by an order of Appellate Tribunal. In that view of the matter, the determination in the adjudication proceedings are very much relevant and germane in the matter of prosecution of the Accused nos.1 and 2 on the same set of material in the criminal trial. What can be noticed from the observations made by the Commissioner and thereafter the Appellate Tribunal is the Accused nos. 1 and 2 were exonerated in the adjudication proceedings on merits as the allegations against them of dereliction of duty or acting in an illegal manner were not established. It could be noticed that once the contravention of the provisions of the act by the Accused nos. 1 and 2 in the adjudication proceedings was not established, it has to be inferred that the prosecution of the Accused nos.1 and 2 under the provisions of the Prevention of Corruption Act particularly having regard to the non-satisfaction of necessary ingredients of Section 13(1)(d) of the Act cannot be held to be satisfied. The claim of the Applicant that there is a miscarriage of justice and as the offence under the Prevention of Corruption Act and the adjudication by the competent authority are parallel and cannot go hand in hand, is liable to be rejected - Once the order passed in the adjudication proceedings is not questioned by the Applicants, the Applicants are bound by the same and, that being so, it is not open for the Applicants to open the question for illegality of the orders passed in the adjudication proceedings. No case of exercise of excessive jurisdiction could be made out - Application dismissed.

Summary

Issues Involved:
1. Whether the discharge of Accused Nos. 1 and 2 under Section 13(1)(d) read with Section 15 of the Prevention of Corruption Act, 1988, by the Special Judge, CBI Court, was justified.
2. Impact of the adjudication proceedings and exoneration by the Customs Excise and Service Tax Appellate Tribunal on the criminal prosecution under the Prevention of Corruption Act.

Issue-wise Detailed Analysis:

1. Discharge of Accused Nos. 1 and 2 under the Prevention of Corruption Act:

The Central Bureau of Investigations (CBI) invoked the revisional jurisdiction of the High Court to challenge the order passed by the Special Judge, CBI Court, at Mapusa, Goa, which discharged Accused Nos. 1 and 2 from offenses punishable under Section 13(1)(d) read with Section 15 of the Prevention of Corruption Act, 1988. The case against the Accused involved allegations of abuse of official position by public servants (Accused Nos. 1 and 2) in connivance with other accused to facilitate the export of substandard materials, thus obtaining pecuniary advantages illegally.

The Applicant argued that the prescribed legal procedures for exporting goods and certification by Accused Nos. 1 and 2 were not adhered to, leading to intentional latitude shown to the exporter. This resulted in the export of rags instead of the materials for which the license was obtained. The Applicant contended that the discharge order caused a miscarriage of justice and overlooked serious defaults by the Accused.

The High Court noted that the Commissioner of Customs, in adjudication proceedings, had found dereliction of duty by Accused Nos. 1 and 2 but did not prove any extraneous considerations for their actions. The Appellate Tribunal set aside the penalties against Accused Nos. 1 and 2, stating that there was no evidence of abetment or collusion with exporters.

2. Impact of Adjudication Proceedings on Criminal Prosecution:

The High Court emphasized the relevance of the observations made by the Commissioner of Customs and the Appellate Tribunal. The Commissioner noted that the Accused did not strictly follow procedures but did not prove extraneous considerations. The Appellate Tribunal found no act of omission or abetment by Accused Nos. 1 and 2 that would render goods liable to confiscation.

The High Court referred to the Supreme Court's judgment in Radheshyam Kejriwal vs. State of West Bengal, which held that if exoneration in adjudication proceedings is on merits, continuation of prosecution would be an abuse of the court's process. The standard of proof in criminal cases is higher than in adjudication proceedings.

In this case, the exoneration of Accused Nos. 1 and 2 in adjudication proceedings on the same set of allegations indicated that the prosecution under the Prevention of Corruption Act could not be sustained. The High Court concluded that the Special Judge rightly discharged Accused Nos. 1 and 2, considering the identical material and facts in both adjudication and criminal proceedings.

Conclusion:

The High Court rejected the CBI's revision application, upholding the discharge of Accused Nos. 1 and 2. The court found no exercise of excessive jurisdiction by the Special Judge and emphasized that the exoneration in adjudication proceedings on merits precluded the continuation of criminal prosecution. The application lacked merit and was thus rejected.