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TMI Blog2013 (12) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... - W. P. (C) 7449/2012 - - - Dated:- 20-12-2013 - G. P. Mittal,JJ. For the Petitioner : Mr. Jagmohan Sabharwal, Senior Advocate with Ms. Shikha Sapra, Adv. For the Respondents : Mr. S. K. Dubey, Adv. with Ms. Anandi Mishra, Adv. Mr. Roshan Lal Goel, Adv. JUDGMENT G. P. Mittal, J. 1. By virtue of this writ petition under Article 226 of the Constitution of India, the Petitioner has approached this Court for de-freezing it s account held in Citibank, NA, 27 Central Market, Sector II, Western Avenue Road, Punjabi Bagh, New Delhi which has been frozen by Respondent No.2 (Directorate of Revenue Intelligence). 2. The Petitioner alleges that there were certain allegations of import of high value pesticides/insecticides in the guise of Sodium Bi-Carbonate against certain firms which led to some investigation by Respondent No.2. It is urged that the Petitioner has neither been indicted nor arraigned as a Noticee in the show cause notice purported to have been issued in pursuance of the investigation. In spite of this, the Petitioner s Bank Account bearing No.030874226 which has undergone major changes (in it s Constitution) has been frozen. It is urged that as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Vimal Kumar, proprietor of M/s. V.V.K. Traders, Bhagwan Dass Nagar, East Punjabi Bagh, New Delhi. Goods imported against these fake front firms namely, M/s. Mehta Overseas, M/s. Chopra Overseas and M/s. Umesh Impex and other firms were shown to be sold to individuals against fake cash bills. The imported chemicals with the correct description were shown to be supplied by another set of fake front firms to several firms located mainly at Samba, J K, controlled by the said Mr. Vimal Kumar through his brother Mr. Kamal Kumar. One such firm namely, M/s Ravi Crop Science, at Samba, was being used by the fraudsters to regularize the illegally imported material/chemicals. The said firm M/s. Ravi Crop Science is a pesticide manufacturing unit. 4. Goods have also been detained / seized at various warehouses belonging to the said importers. As many as seventy to eighty such consignments estimated to be valued at well over Rs. 40 crores have been imported by the said perons in the names of the fake front firms till date. At M/s/. Ravi Crop Science, Sambah, J K, stock including imported insecticides/pesticides of different varieties worth more than Rs. 2 crores was detained / seized for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt statement revealed huge transactions between M/s. Ravi Crop Science, M/s. VVK Traders, M/s. Classic International and M/s. Galaxy Marketing. An Analysis of the Account Statement also revealed that an amount of Rs. 4.09 crores had been received in the said account of M/s. Ravi Crop Science from M/s VVK Traders. Also, an amount of Rs. 5.60 Crores, Rs. 0.66 Crores and Rs. 1.75 Crores (total 8.00 Crores) had been transferred into the Bank Accounts of M/s. Classic International, M/s. Galaxy Marketing and M/s. VVK Traders Pvt. Ltd. Respectively. Investigation by the answering respondent has also revealed that both M/s. Classic International and M/s. Galaxy Marketing were non-existent entities and were floated for the purpose of paper transactions of trade goods. The same has been corroborated by the depositions made by Shri Amit Gupta, R/o C-30 1st Floor, Adarsh Nagar, Delhi, Shri Deepak Bansal Proprietor of M/s. Classic International and Shri Naveen Kumar Gupta, Proprietor of M/s Galaxy Marketing in their depositions made under Section 108 of the Customs Act, 1962. In view of the above, it may be seen that M/s Ravi Crop Science has indulged in transfer of huge amounts to non-existen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports. 11. The distinction and the scope of Section 110(2) and 124 were dealt with in great detail by the Hon ble Supreme Court of India in the judgment of Harbans Lal. The Supreme Court held that Sections 110 and 124 are independent, distinct and exclusive of each other and even if any seized goods are returnable in terms of Section 110 of the Act, the proceedings for confiscation of the goods under Section 124 may still continue. Paras 7 and 8 of the report in Harbans Lal are extracted hereunder:- 7. As said before Section 110 is in Chapter XIII covering the subject of search, seizure and arrest. The section operates during the stage of investigation. Section 124, hinted earlier, is in Chapter XIV which covers the topic: confiscation of goods and imposition of penalties. The subject of investigation and that of confiscations and imposition of penalties are ex facie exclusive of each other, the goal of each being different. A Constitution Bench of this Court in I.J. Rao, Asstt. Collector of Customs v. Bibhuti Bhushan Bagh (1989) 3 SCC 202 while interpreting Section 110(2) proviso of the Act has held that when wanting to extend period beyond six months in respect of seizure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (2) of Section 110 of the Act being vitiated. Learned counsel for the appellant would have us hold that in face of that vitiation, proceedings under Section 124 get lapsed for they could not be initiated without the aid of Section 110. This argument, however, militates against the ratio of Charan Das Malhotra s case and cannot be accepted. In the second half of paragraph 5 of the report of that case this Court observed:- Section 124 provides that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. The section does not lay down any period within which the notice required by it has to be given. The period laid down in Section 110(2) affects only the seizure of the goods and not the validity of the notice. (emphasis supplied) In clear terms, it has thus been held that the period angle causing affectation under Section 110(2), would only pertain to the seizure of goods. The validity of notice under Section 124, for which no period has been laid within which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 110(3) of the Act deals with seizure of the documents or things which in the opinion of the proper officer would be relevant to any proceedings under the Act. Freezing of the bank account, in my opinion, will not be seizure of any document or thing useful or relevant to any proceedings under the Act. Rather freezing of the account was only with a view to stop the Petitioner from withdrawing the proceeds of the alleged violations under the Act. 17. In Euroasia Global, relied upon by the learned counsel for the Respondents, it was held that the goods defined under Section 2(22) of the Act includes currency. There is no precedent to show that freezing of the bank account will amount to seizure of currency. Since the Respondents plea is that the bank account stand frozen with a view to recover the evaded customs duty, penalty, etc. etc., the freezing of the bank account may not amount to the seizure of any document, but at the same time it cannot also amount to seizure of any goods liable for confiscation as well. In Euroasia Global, even in case of seizure of the currency, the Supreme Court held that unconditional release of cash ought not to have been allowed. In para ..... X X X X Extracts X X X X X X X X Extracts X X X X
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