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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 ..... (Development and Regulation) Act, 1992 or Customs Act. The same can be imported with certain restrictions/conditions. If the conditions are complied with then it is not a prohibited goods. If the conditions are not complied with then it amounts to prohibited goods as it is clear from the definition under Section 2 (33) and Section 11 of the Act of 1962 also. In the present case, 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. In the present case, there is allegation of smuggli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 petitioners under Section 108 of the Act of 1962 fixing the date of appearance as 20.05.2024. The petitioners submitted their representation on 20.05.2024 without making themselves physically present before the authorities. 4) In the meantime, the petitioners filed Civil Writ Petitions before this Court challenging the validity of Section 104 108 of the Act of 1962 on the lines of the case of Radhika Aggarwal Vs. Union of India Ors. [Writ Petition (Crl.) No.336/2018]. Thereafter, on certain objections, the aforesaid writ petitions were converted into the Criminal Writ petitions, which were dismissed by coordinate Bench of this Court as withdrawn with liberty to file fresh writ petitions, if occasion so arises. Meanwhile, the petitioners also filed separate Writ Petitions (Criminal) bearing Nos. 242/2024 and 268/2024 before the Hon ble Supreme Court and the Hon ble Supreme Court dismissed the said writ petitions on 07.06.2024 and 25.06.2024 respectively with liberty to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble , 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; without jurisdiction; unconstitutional, arbitrary, violative of Article 14 and 21 of the Constitution of India; ii. Issue appropriate Writ, Order or Direction(s) to quash the investigations under Customs Act, 1962 conducted by the Respondent No.2 DRI in F. No. DRI/KZU/AS/ENQ-28/2018 and all consequential proceedings arising therefrom being violative of the procedure established by law ; iii. Issue appropriate Writ, Order or Direction(s) to quash the investigations under Customs Act, 1962 conducted by the Respondent No.3 DRI in F. No. DRI/HZU/26(B)/ENQ-2A/(INT-21)/2017 and all consequential proceedings arising therefrom being violative of the procedure established by law ; iv. Pass any other or further orders which Your Lordships may deem fit and proper in the interest of justice. 9) The prayer in the present writ petitions is the challenge to the Constitutional validity of provisions under Sections 104, 105 108 of the Act of 1962. From a comparative reading of above two prayers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 court of Session depending upon gravity of punishment. Section 155 of the Cr.P.C. is a kind of restriction on the exercise of power by the Officer-incharge of Police Station with regard to offences of non-cognizable nature. The Officer-incharge of Police Station shall enter into the book as prescribed by the State Government with regard to substance of information relating to non-cognizable offence and refer the informant to the Magistrate. The Police Officers have no power to investigate the non-cognizable case without the order of the Magistrate. Once the order has been obtained from the Magistrate, he has all the powers of investigation like offences of cognizable nature except power of arrest without warrant. This means the arrest cannot be made without a warrant from the Magistrate. 11) It is also relevant to refer to Section 104, 108 and Sections 132, 133, 135, 135-A 136 of the Act of 1962, which read hereunder:- 104. Power to arrest. [(1) If an officer of customs empowered in this behalf by general or special order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned. (3) All persons so summoned shall be bound to attend either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents and other things as may be required: Provided that the exemption under section 132 of the Code of Civil Procedure, 1908 (5 of 1908), shall be applicable to any requisition for attendance under this section. (4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860). xxx xxx xxx 132. False declaration, false documents, etc. Whoever makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document in the transaction of any business relating to the customs, knowing or having reason to believe that such declaration, statement or document is false in any material particular, shall be punishable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence 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]. (3) For the purposes of sub-sections (1) and (2), the following shall not be considered as special and adequate reasons for awarding a sentence of imprisonment for a term of less than [one year], namely: (i) the fact that the accused has been convicted for the first time for an offence under this Act; (ii) the fact that in any proceeding under this Act, other than a prosecution, the accused has been ordered to pay a penalty or the goods which are the subject matter of such proceedings have been ordered to be confiscated or any other action has been taken against him for the same act which constitutes the offence; (iii) the fact that the accused was not the principal offender and was acting merely as a carrier of goods or otherwise was a secondary party to the commission of the offence; (iv) the age of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with fine and in some cases upto 3 years, or with fine, or with both. Section 135-A carves out maximum punishment of three years, or with fine, or with both. Section 136 carves out maximum punishment of three years, or with fine, or with both and in some cases upto six months, or fine or with both. 11.B.) Sub-Section (1) of Section 104 of the Act of 1962 empowers the Custom Officer when he has reason to believe that any person in India or within Indian Customs Waters has committed an offence punishable under Section 132 or Section 133 or Section 135 or Section 135-A or Section 136, he may arrest such person by furnishing grounds for arrest. 11.C.) Sub-Section (4) of Section 104 of the Act of 1962 recognized two categories of offences as a cognizable offence i.e. (a) prohibited goods; or (b) evasion or attempted evasion of duty exceeding fifty lakh rupees. Sub-Section (5) makes all other offences under this Act as non-cognizable. A combined reading of sub-Section (1), sub-Section (4) and sub-Section (5) and Classification of Schedule II of Cr.P.C., prima facie, reveals that the only two categories of offences i.e. prohibited goods; or evasion or attempted evasion of duty exceeding f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description. (2) The purposes referred to in sub-section (1) are the following:- (a) the maintenance of the security of India; (b) the maintenance of public order and standards of decency or morality; (c) the prevention of smuggling; (d) the prevention of shortage of goods of any description; (e) the conservation of foreign exchange and the safeguarding of balance of payments; (f) the prevention of injury to the economy of the country by the uncontrolled import or export of gold or silver; (g) the prevention of surplus of any agricultural product or the product of fisheries; (h) the maintenance of standards for the classification, grading or marketing of goods in international trade; (i) the establishment of any industry; (j) the prevention of serious injury to domestic production of goods of any description; (k) the protection of human, animal or plant life or health; (l) the protection of national treasures of artistic, historic or archaeological value; (m) the conservation of exhaustible natural resources; (n) the protec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difications or adaptations. In simplicitor if the prohibition is not under Section 11 of the Act of 1962 or any other provisions of the Act of 1962 but prohibition is under any other law, those prohibitions will operate when they are notified under the present Act. However, this provision is not in operational. 14) It is an admitted case of both the parties that there is no Notification under Section 11 of the Act of 1962 with regard to control on importation and exportation of gold. However, this can be found in various notifications issued under the Foreign Trade (Development and Regulation) Act, 1992 and certain circulars issued by RBI. It is inappropriate to refer all the notifications issued under the Foreign Trade (Development and Regulation) Act, 1992. However, it is relevant to refer to recent Notifications i.e. (1) Notification No.36/2015-2020 dated December 18, 2019 and (2) Notification No. 49/2015-2020 dated January 5, 2022. The relevant parts of the notifications are extracted hereunder: Notification No. 36/2015-2020 New Delhi Dated December 18, 2019 Subject: Amendment in import policy conditions of gold and silver under Chapter 71 of the ITC (HS), 2017, Schedule I (Imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Effect of the Notification: Import of gold in any form, other than monetary gold and silver in any form, is amended from Free to Restricted ; import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). However, Import under Advance Authorisation and supply of gold directly by foreign buyers to exporters under para 4.45 of FTP against export orders are exempted. This issues with the approval of Minister of Commerce Industry. xxx xxx xxx Notification No. 49/2015-2020 New Delhi, Dated January 5, 2022. Subject: Amendment in import policy conditions of gold under Chapter 71 of Schedule I (Import Policy) of ITC (HS), 2017 S.O. (E): In exercise of powers conferred by Section 3 read with Section 5 of FT (D R) Act, 1992 read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby amends the import policy conditions for gold in any form, other than monetary gold and silver in any form under Chapter 71 of the ITC (HS), 2017, Schedule-I (Import Policy) as under: ITC (HS) Code Item Description Policy Existing Policy Condition Revised Policy Condition 71061000 Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any form about 22 carats under Chapter-71 of ITC (HS), 2017, Schedule-I (Import Policy). Effect of the Notification: In addition to nominated agencies as notified by RBI (in case of banks) and nominated agencies notified by DGFT, qualified jewellers as notified by International Financial Services Centres Authority (IFSCA) will be permitted to import gold under specific ITC (HS) Codes through India International Bullion Exchange IFSC Ltd. (IIBX). However, Import of gold/silver under Advance Authorisation and supply of gold/silver directly by foreign buyers to exporters under para 4.45 of FTP against export orders would continue to be governed by the relevant FTP provisions. This issues with the approval of Minister of Commerce Industry. 15) It is also relevant to refer certain circulars issued by the RBI:- (i) Circular No. 107, dated June 4, 2013 issued by the Government of India, Ministry of Finance (Department of Revenue), CBEC permitting import of gold on consignment basis by banks for genuine needs of the exporters of gold jewellery simultaneously extended the benefit to all nominated agencies/premier/star trading houses who have been permitted by the Government of India to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly routed through Customs bounded warehouses only by nominated agencies and export houses or individuals. (viii) Further, Guidelines were given vide Circular No. 79 RBI/ 2014-45/474, dated February 18, 2015 under section 10 (4) read with section 11 (1) of FEMA vide which import of gold coin and medallions were no longer prohibited but restrictions on banks in selling gold coins and medallions were not removed. (ix) Circular No. 04 RBI/2022-2023/57, dated May 25, 2022 issued under section 3 read with section 5 of FTDR Act read with paragraphs 1.02 and 2.01 of Foreign Trade Policy 2015-2020, allowed import of gold by qualified jewellers as notified by the International Financial Services Centres Authority (IFSCA). It provided detailed mechanism by the resident qualified jeweller to import gold through IIBX, i.e., India International Bullion Exchange IFSC Ltd. or in terms of any other regulations issued by IFSCA and DGFT. 16) A reading of aforesaid two Notifications issued by Directorate General of Foreign Trade (DGFT) under Foreign Trade (Development and Regulation) Act, 1992 makes it crystal clear that the importation of gold is restrictive and it was allowed to be imported subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the eyes of the law since Section 155 of Cr.P.C. imposes requirement of warrant from the concerned Magistrate for arrest as the offences are non-cognizable. However, we do not find any prima facie case relating to the offences for the acts or omissions for which summons are issued in the present case since those allegations fall within the prohibited goods which is cognizable offence and the petitioners can be arrested without warrant from Magistrate. 19) The learned counsel for the petitioners also relied upon the decision rendered by Coordinate Bench of this Court in the case of Manoj Kumar Sharma Vs. Union of india Ors., [D.B. Civil Writ Petition No.12001/2020], decided on 17.02.2022 to contend that the acts or omissions in the present case do not fall with the purview of prohibited goods. A closure scrutiny of the said decision, more particularly paragraph 13 clearly shows that this Court has relied upon the decision of Gujarat High Court in the case of Bhargavraj Rameshkumar Metha Vs. Union of India Ors., reported in 2018 (361) ELT 260 (Guj.), which reads hereunder:- 15. Term 'prohibited goods' as defined under section 2 (33) means any goods, the import or export of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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