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TMI Blog2023 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... be proper, legal and justified and the compounding amount so finalized under the order of compounding dated 12.09.2023 is liable to be limited to 5% in terms of the Circular No.27 of 2015. To that extent the compounding amount deserves to be and accordingly stands modified. - THE HON BLE SRI JUSTICE P.SAM KOSHY AND THE HON BLE SRI JUSTICE N.TUKARAMJI ORDER ( Per Hon ble Sri Justice P. SAM KOSHY ) The present writ petition is filed seeking the following relief: to issue a writ, order or direction especially one in the nature of Writ of Mandamus, 1. Declaring the action of the respondent No.3 in issuing C.No.I/10/29/2020-Pors, Dated 07.2023 and the action of the respondent no. 4 in passing order in compounding order no.4 of 2023 dated 12.09.2023 in furtherance of the action of the respondent no. 3 in issuing C.No.I/10/29/2020-Pros, Dated 07.2023 as illegal, arbitrary, unconstitutional and infringing art 14, 19, 20, 21 of Constitution of India. 2. To set aside C.No.I/10/29/2020-Pros, Dated 07.2023 issued by respondent no. 3 along with compounding order no.4 of 2023 dated 12.09.2023 passed by respondent no. 4 and all other proceedings 2. Heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inh City 19 times since January, 2016; that each time he carried Prescription drugs for 1 Hepatitis C; that Haeal Pharma is in the business of trading in drugs and is owned by Shri K. Raghavendra Reddy, who also owns Hira Enterprises. Shri Raghavendra Reddy (the Applicant herein) deals in Hepatitis C drugs of various leading companies. That they purchase the Hepatitis C Drugs (Ledipasvir and Sofosbuvir Tablets 90 ing+ 400 mg. Sofosbuvir tablets, Daclatasvir Dihydrochloride, etc.) from various distributors and sell these drugs in Russia, Hong Kong, China, Ukraine, which are dispatched by speed post (EMS). That they prepare fake prescriptions in the name of Dr. Chaitanya Rao of Sanjeevani for this reason and no doctor exists by that name. That the mobile number 9618653653 belongs to wife of Shri. K. Raghavendra Reddy (the Applicant herein). That they use the letter head of Dr. Chaitanya Rao (mentioned as Chaitanya Rao) so that their postal consignments are not stopped by Customs, Drug Administration and at the destination country. 6. In the light of the statement of Sri Ambala Sreedhar Reddy, the petitioner herein was also subjected to enquiry and he had also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,45,000 detained under panchanama dated 05/06.10.2016 and seized vide memorandum dated 24.11.2016, are absolutely confiscated in terms of Sections Sections 113(d) of the Customs Act, 1962. ii) The suitcase, having no commercial value used for carrying the medicines for Hepatitis-C by the notices is hereby confiscated under Section 118(b) of the Customs Act, 1962. iii) I impose penalty of Rs. 2,50,000 (Rupess Two Lakhs Fifty Thousand only) under Section 114(i) of the Customs Act, 1962, on Shri Ambala Sreedhar Reddy for the above said offences. iv) I impose penalty of Rs. 2,50,000 (Rupees Two Lakhs Fifty Thousand only) under Section 114(i) of the Customs Act, 1962. on Shri Konudula Raghavendra Reddy for the above said offences. The said order was subjected to challenge before the first Appellate Authority i.e., the respondent No.5. The respondent No.5 confirming the order of the respondent No.6 had dismissed the appeal vide order dated 28.02.2018. 8. Subsequent to the finalization of the Order-in-Original, the respondent No.3 issued notice in July, 2022 (date not given) and ordered for initiation of prosecution proceedings under Section 135(1)(b) read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hundred only). (ii) The Applicant is required to pay the compounding amount as ordered at (i) above, within thirty days of receipt of this order and furnish the proof of such payment to the Compounding Authority, in terms of Rule 4(5) of the Customs (Compounding of Offences) Rules, 2005; and (iii) Immunity is granted to the Applicant from prosecution under Customs Act, 1962 with respect to this case, under Rule 6 of the Customs (Compounding of Offences) Rules, 2005 subject to the following conditions that are imposed in accordance with Rule 7 of the said Rules; (a) The immunity shall stand withdrawn if the applicant fails to pay the compounding amount as ordered at (i) above, within the time specified at (ii) above, and thereupon the provisions of the Customs Act, 1962 shall apply as if no such immunity has been granted to him. (b) The immunity may at any time be withdrawn, if it is found that the applicant has in the course of these proceedings concealed any material particulars or had given false evidence, and thereupon the provisions of the Customs Act, 1962 shall apply as if no such immunity has been granted to him. 11. Immediately, after the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of prosecution under Section 135(1)(b) where it was specially mentioned that if the petitioner wants, he may seek for compounding of the offence. The said objection was voluntarily with no element of compulsion, coercion or pressure on the part of the respondent No.3. It was this notice of prosecution which was of July, 2022, which was accepted by the petitioner by availing the option of compounding of the offence. 16. According to the learned counsel for the respondent-Department, the impugned order (Annexure P2) dated 12.09.2023 passed by the respondent No.4 was only at the behest of the option availed by the present petitioner. Having availed the option of compounding of the offence once and the authorities having acceded to the request of the petitioner and the impugned order thereafter having been passed, the petitioner is estopped from now turning around and challenging the entire proceedings passed on the compounding application and also challenging the initiation of prosecution. According to the learned counsel for the respondent-Department, this being the factual backdrop, the writ petition itself should not be entertained at this juncture, as petitioner is bound by h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-. In addition, the penalty that was imposed upon the petitioner of Rs.2,50,000/- was reduced to Rs.50,000/-. Surprisingly, even after the decision of the Tribunal partly allowing the appeal on 06.09.2023, the petitioner herein entered appearance before the authorities concerned and pursued his application for compounding of offence which stood finally accepted vide the impugned order dated 12.09.2023. 21. In the teeth of such developments that have transpired, it would not be appropriate to exercise the extraordinary Writ jurisdiction of this Court under Article 226 of the Constitution of India interdicting the impugned order. The writ petition to the aforesaid extent for the aforesaid reasons would not be maintainable. However, taking into consideration the fact that the initial show cause notice for prosecution that was initiated under Section 135(1)(b) read with Section 135 (1)(ii) of the Act, the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise Customs (Anti-Smuggling Unit) had issued a Circular No.27 of 2015 dated 23.10.2015. The said Circular laid down the compounding amount in the course of compounding of the various offences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner having voluntarily agreed and undertaken to the department to pay the compounding charges and to withdraw his appeal, ought to be directed to be bound down by the same. It is a settlement process voluntarily invoked by the petitioner in order to escape criminal prosecution under the Act. Since an accused may have to suffer severe consequences for non-payment of tax, if he is held to be guilty, it is not open to him to challenge the reasonableness of the same. The petitioner had consciously undertaken to abide by the decision of the Committee constituted for compounding the offences. 24. Accordingly, we are of the considered opinion that the rate at which the compounding amount has been finalized by the authorities concerned does not seem to be proper, legal and justified and the compounding amount so finalized under the order of compounding dated 12.09.2023 is liable to be limited to 5% in terms of the Circular No.27 of 2015. To that extent the compounding amount deserves to be and accordingly stands modified. 25. In view of the same, we do not find any strong case made out by the petitioner calling for an interference with the impugned notice initiating prosecution a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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