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TMI Blog2024 (10) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 (hereinafter referred to as "the Act of 1962") by declaring them unconstitutional and violative of the fundamental rights and other constitutional provisions. The petitioners also sought quashment of the proceedings initiated by respondents against them by invoking the powers of summoning/search and arrest as illegal & void; and also quashment of search & seizure carried out in their business premises on 14/15.05/2024 as well as the summons dated 15.05.2024. 3) The petitioners-Om Prakash and Deepak Soni are the Proprietors of M/s Sudarshan Jewellers and M/s New Sukirti Jewellers respectively. The business premises of the petitioners were searched by the DRI Officers on 14/15.05.2024. The various materials were seized in pursuance of seizure operations and the premises were sealed. Such search and seizure was done consequent to the information received from one A. Tripathi, who was arrested for alleged smuggling of gold weighing 1503 grams. That accused A. Tripathi in his statement claimed that the gold belongs to either Om Prakash Soni or Deepak Soni, the present petitioners. In pursuance of search & seizure proceedings, summons dated 15.05.2024 were issued to the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoke the criminal proceedings by way of filing the anticipatory bail application and this fact has been suppressed by them. The petitioners have invoked alternative proceedings for the same kind of relief by way of filing the present interim applications in the pending writ petitions. According to learned counsel for the respondents, on this ground of concealment of material fact, the stay applications are liable to be dismissed. 8) The prayer in Radhika Aggarwal's case, wherein Hon'ble Supreme Court heard the matter and reserved it for pronouncement of judgment by giving protection to the petitioner therein reads hereunder:- "i. Issue appropriate Writ, Order or Direction(s) holding the investigations into the non-cognizable Offence(s) under Customs Act without seeking order of the Magistrate as per Section 155 Cr.P.C. to be null and void ab initio; and in the alternative to the prayers supra in the event that the offence under the Customs Act are construed to be 'cognizable', it may be held that such offences without recording the FIR and without following the procedure prescribed under Sections 154, 156, 157, 172 Cr.P.C. etc. are illegal non-est, null and void ab initio; wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in a cognizable case. (4) Where a case relates to two or more offences of which at least one is cognizable, the case shall be deemed to be a cognizable case, notwithstanding that the other offences are non-cognizable." xxx xxx xxx SCHEDULE-I II - CLASSIFICATION OF OFFENCES AGAINST OTHER LAWS Offence Cognizable or non-cognizable Bailable or non-bailable By what court triable 1 2 3 4 If punishable with death, imprisonment for life, or imprisonment for more than 7 years. Cognizable Non-bailable Court of Session. If punishable with imprisonment for 3 years and upwards but not more than 7 years. Cognizable Non-bailable Magistrate of the first class. If punishable with imprisonment for less than 3 years or with fine only. Non-cognizable Bailable Any Magistrate. 10) A reading of the above provisions clearly show that all the offences, in other laws, punishable with imprisonment for less than 3 years or with fine, are made non-cognizable, bailable and triable by any Magistrate. Whereas, all the offences punishable with imprisonment for 3 years and more than 7 years are made into cognizable, non-bailable and triable either by Magistrate of the first class or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty exceeding fifty lakh rupees; or (b) prohibited goods notified under section 11 which are also notified under sub-clause (C) of clause (i) of sub-section (1) of section 135; or (c) import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds one crore rupees; or (d) fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds fifty lakh rupees, shall be non-bailable. (7) Save as otherwise provided in sub-section (6), all other offences under this Act shall be bailable.]" "108. Power to summon persons to give evidence and produce documents.- [(1) Any Gazetted Officer of customs *** shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.] (2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f drawback or any exemption from duty provided under this Act in connection with export of goods, he shall be punishable,- (i) in the case of an offence relating to,- (A) any goods the market price of which exceeds one crore of rupees; or (B) the evasion or attempted evasion of duty exceeding [fifty lakh] of rupees; or (C) such categories of prohibited goods as the Central Government may, by notification in the Official Gazette, specify; or (D) fraudulently availing of or attempting to avail of drawback or any exemption from duty referred to in clause (d), if the amount of drawback or exemption from duty exceeds [fifty lakh] of rupees, with imprisonment for a term which may extend to seven years and with fine: Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than one year; (ii) in any other case, with imprisonment for a term which may extend to three years, or with fine, or with both.] [(2) If any person convicted of an offence under this section or under sub-section (1) of section 136 is again convicted of an offence under this section, then, he sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny person without having reason to believe that he has been guilty of an offence punishable under section 135; or (c) searches or authorises any other officer of customs to search any place without having reason to believe that any goods, documents or things of the nature referred to in section 105 are secreted in that place, he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. (3) If any officer of customs, except in the discharge in good faith of his duty as such officer or in compliance with any requisition made under any law for the time being in force, discloses any particulars learnt by him in his official capacity in respect of any goods, he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both." 11.A.) Section 132 of the Act of 1962 prescribes maximum punishment of two years, or with fine, or with both. Section 133 prescribes maximum punishment of two years, or with fine, or with both. Section 135 prescribes maximum punishment of seven years and with fine and in some cases upto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition, it is clear that it has two parts. The first part is dealing with absolute prohibition with regard to import and export either under Customs Act or any other law for time being in force. The second part in positive terms say that if the goods are permitted to be imported or exported with certain conditions and if those conditions are complied with, then it would not amount to prohibited goods. Implicitly, the second part makes it clear that if the goods are permitted either to import or export with the certain conditions and if those conditions are not complied with it amounts to prohibited goods. Though these conclusions were not explicitly indicated in the definition but it is implicit in the second part of definition of "prohibited goods". 13) It is also relevant to refer to Section 11 of the Act of 1962, which deals with the prohibitions of import and export of goods, which is hereunder:- "11. Power to prohibit importation or exportation of goods.-(1) If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any order or notification issued thereunder, shall be executed under the provisions of that Act only if such prohibition or restriction or obligation is notified under the provisions of this Act, subject to such exceptions, modifications or adaptations as the Central Government deems fit.]" Sub-Section (1) of Section 11 of the Act of 1962 clearly shows that prohibition can be either absolute or subject to certain conditions (to be fulfilled before or after clearance). It means the prohibition can be either absolute or with certain conditions to be fulfilled. Sub-Section (3) of Section 11, which was inserted by Finance Act, 13 of 2018, would operate from the date of Notification, has not yet been notified. A reading of sub-Section (3) of Section 11 of the Act of 1962 indicates that any prohibition or restriction or obligation relating to import or export of any goods or class of goods or clearance thereof provided in any other law for the time being in force, or any rule or regulation made or any order or notification issued thereunder, shall be executed under the provisions of that Act only if such prohibition or restriction or obligation is notified under the provisions of this A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d DGFT (for other agencies). 71069290 Other Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 71081100 Powder Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 71081200 Other unwrought forms Free Restricted Subject to RBI Regulations. However, import policy of Gold Dore is "Restricted" Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). Gold dore can be imported by refineries against a licence with AU condition. 71081300 Other semi-manufactured forms Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 71189000 Other Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 2. Import of gold under Advance Authorisation and supply of gold directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange in existing Policy Condition 71081200 Other unwrought forms Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). Gold dore can be imported by refineries against a license with AU condition. Import is allowed only through nominated agencies as notified by RBI (in case of banks), DGFT (for other agencies) and IFSCA (for qualified jewellers through India International Bullion Exchange). Gold Dore can be imported by refineries against a license with AU condition. 71081300 Other semi-manufactured forms Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). No change in existing Policy Condition 71189000 Other Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). Import is allowed only through nominated agencies as notified by RBI (in case of banks), DGFT (for other agencies) and IFSCA (for qualified jewellers through India International Bullion Exchange). 2. Import of gold/silver under Advance Authorisation and supply of gold/ silver di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with section 11 (1) of the FEMA, provided for import of gold for the purposes of exports or to import of gold by units in SEZ exclusively for the purposes of exports providing, inter alia, also providing that the nominated banks/nominated agencies shall ensure that at least one fifth of every lot of import of gold (in any form/purity including import of gold coins/dore) is exclusively made available for the purposes of export. (v) Circular No. 25 issued by RBI 2013-14/187 dated August 14, 2013 referred to the earlier Circular No. 15, dated July, 22, 2013 and specifically prohibited import of gold in forms the coins and medallions providing for other stringent conditions in terms of 20/80 principle and quantifying the amounts of gold to be imported by the nominated agencies as also the banks. (vi) Circular No. 82 RBI/2013-14/423, dated December 31, 2013 referred to the earlier Circulars allowing refineries to import gold dore up to 15 per cent. of their gross average viable quantity based on their licence entitlement in the first two months for making the same available to the exporters on first in first out basis. Further, providing not more than 80% would be allowed to be so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, summons were issued in pursuance of enabling provisions under Section 108 of the Act of 1962, which made to file the present criminal writ petitions. The challenge was made to the Constitutional validity of Sections 104, 105 and 108 of the Act of 1962, which is yet to be decided by this Court in the main writ petitions. It is needless to say that initial presumption is that all the provisions of the Act are presumed to be constitutionally valid unless it is otherwise declared to be unconstitutional. Such a situation would arise when this Court deals with the Constitutional validity of such provisions. Prima facie, this Court is not impressed by the submission with regard to Constitutional validity, which is yet required to be decided in the writ petitions. The judgment in the case of Radhika Aggarwal (cited supra) was not dealing with the Constitutional validity of the provisions. The said writ petition was filed mainly on the premises that the offences, for which the petitioner-therein was to be charged, were relating to non-cognizable offences. Though alternative prayer was made regarding cognizable offence but it is not clear from the order of Hon'ble Supreme Court whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion therefore in case of goods, import of which is conditional, would fall within the definition of prohibited goods if such conditions are not complied with." 20) The above decision clearly shows that the gold comes under the prohibited goods when it is smuggled. In the present case also, there is allegation of smuggling, which made to arrest A. Tripathi from whose possession the gold was seized and his statement was foundation to make search and seizure in the premises owned by the petitioners herein. Prima facie, we feel that the alleged acts or omissions against the petitioners constitute within the parameters of prohibited goods. Such offence is cognizable and punishment is upto 7 years and therefore, the provisions of Section 155 of Cr.P.C. has no application in the present case whereas the Radhika Aggarwal's case was mainly based on Section 155 of Cr.P.C. In these circumstances, this Court, prima facie, feels that it is not a fit case to grant stay at this stage. 21) Accordingly, the stay applications stand dismissed. However, any observations made in the present case are only for the limited extent of disposal of these stay applications. All the other contentions will be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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