2024 (10) TMI 847 - HC - Customs

Grant of regular bail - smuggling - gold of foreign origin - material brought on record by the DRI to indicate that the gold jewellery was made from gold of foreign origin or not - burden of proof - applicability of Section 135 of the Customs Act - HELD THAT - It could not be disputed at this stage by the DRI that the documents which have been submitted by the applicant are not genuine. The applicant has his own residence, his firm is duly registered and its business relates to dealing with gold jewellery. Bank statements, GST returns, Income-tax Returns, all reflect that the applicant is not at flight risk. The family of the applicant comprising of his wife and children are also residing in Thane, Maharashtra and it shows that the applicant has roots in the society - It is also not disputed that the applicant does not have any other criminal history except for the case at hand. The applicant has been in jail since more than 3 months and apparently the DRI has not demonstrated any reason or purpose for which the custody of the applicant is required any more. It is also not disputed that the maximum sentence as prescribed under Section 135 of the Customs Act is upto 7 years and is triable by Magistrate and the complaint has already been filed. Considering the nature of allegations and accusation against the applicant, the severity of the punishment if convicted including the fact that the applicant is not at flight risk nor it has been apprehended by the DRI that the applicant is in a position to tamper with evidence or influence any witness and that the charge under Section 135 of the Customs Act is yet to be established in trial also noticing the period of incarceration as well as the fact that the personal liberty of the applicant is a precious fundamental right which has to be balanced in the context with the punishment which may finally be awarded upon conclusion of trial, hence, at this stage, without expressing any opinion on the merits of the case, this Court is of the view that the applicant is entitled to be released on bail. Let the applicant Ramkrishna Jaladhar Parai involved in Complaint Case/DRI Case No.6/2024 under Section 135 of the Customs Act, 1962, Police Station DRI, District Lucknow be released on bail on his furnishing a personal bond with two reliable sureties each in the like amount to the satisfaction of the court concerned, subject to fulfilment of conditions imposed - bail application allowed.

Issues Involved:

1. Whether the applicant is entitled to regular bail under Section 439 Cr.P.C. in a case under Section 135 of the Customs Act, 1962.
2. Whether the seized gold and cash were of foreign origin and if the provisions of Section 135 of the Customs Act are applicable.
3. The relevance of the statements made by co-accused and the burden of proof under Section 123 of the Customs Act.
4. Consideration of applicant's business legitimacy and compliance with tax regulations.
5. Applicant's risk of absconding or tampering with evidence.

Issue-wise Detailed Analysis:

1. Entitlement to Bail:

The applicant filed a regular bail application under Section 439 Cr.P.C. after being in judicial custody since 29.06.2024. The Court considered several factors, including the applicant's incarceration period, the non-severity of the punishment under Section 135 of the Customs Act, and the absence of any criminal history. The Court emphasized the presumption of innocence and the fundamental right to personal liberty, as highlighted by the Apex Court in Dataram Singh v. State of U.P. & Another and Sanjay Chandra v. Central Bureau of Investigation. The Court concluded that the applicant is entitled to bail, provided certain conditions are met, ensuring the applicant's presence during trial and preventing any misuse of bail.

2. Origin of Seized Gold and Applicability of Section 135:

The prosecution alleged that the gold was of foreign origin, invoking Section 135 of the Customs Act. However, the Court noted the absence of clear evidence indicating the foreign origin of the gold, except for the statements of the co-accused. The Court found that the seized gold was not recovered from a location typically associated with smuggling, such as an airport or border town. The applicability of Section 135, which deals with the evasion of duty or prohibitions, was questioned due to insufficient evidence of the gold's foreign origin.

3. Statements of Co-accused and Burden of Proof:

The statements of co-accused Lalmohan Panja and Harekrishna Parai indicated the gold's foreign origin. However, the Court considered these statements insufficient to establish the applicant's culpability under Section 135. The burden of proof under Section 123 of the Customs Act, which places the onus on the accused to prove the non-smuggled nature of goods, was deemed irrelevant at the bail stage. The Court suggested that this issue should be addressed during the trial.

4. Business Legitimacy and Tax Compliance:

The applicant claimed to be a legitimate businessman dealing in gold and jewellery, supported by documentation such as GST returns, income tax returns, and business registration. The Court acknowledged these documents, noting that they prima facie indicated the applicant's legitimate business operations. The prosecution did not dispute the authenticity of these documents, which bolstered the applicant's claim of being falsely implicated.

5. Risk of Absconding or Tampering with Evidence:

The Court assessed the applicant's risk of absconding or tampering with evidence. It found no substantial risk, given the applicant's roots in society, family ties, and lack of criminal history. The Court also noted that the applicant had been cooperative during the investigation and that the DRI had not demonstrated any need for further custody. Consequently, the applicant was granted bail with conditions to ensure compliance and prevent any interference with the judicial process.

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