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TMI Blog2007 (8) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner were registered. 2.Facts in brief which emerge from the order of the Settlement Commission and from the averments made in the petition are that the petitioner obtained advance licences on 16-12-2002 under DEEC Scheme in the name of M/s. Bhoday International, 94, Ahluwalia Street, Miller Ganj, Ludhiana. The import licence for duty free import of 174.260 MT CRCA Sheet/Coil (Second/Defective 8-28-G) for a CIF value of US $ 41,823 (Rs. 20,49,300/-) with an export obligation to export the products for a FOB value of export worth US $ 53,350 (Rs. 26,14,150/-). The petitioner is the proprietor of the firm. The firm imported goods and sold them in the domestic market illegally. The petitioner submitted a bill dated 19-12-2002 alongwith original bank certificate of realization, invoice, packing list and statement of export claiming to have discharged his export obligation. He requested for waiver of condition concerning bank guarantee. Accordingly, condition concerning bank guarantee was waived on the basis of the documents submitted and the petitioner's firm was allowed to import goods worth US $ 41,160 (Rs. 20,16,869/-). Acordingly it imported the goods and availed custom dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ……….where prosecution for any offence..... has been instituted....." whereas on the other hand, the proviso (1) of Section 127H of the Act stipulates that "...no such immunity shall be granted.......where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under Section 127B". Thus the wordings are entirely different in the Finance Act, 1998 and emphasis is on institution of prosecution whereas in the said Customs Act, emphasis is on institution of proceeding for prosecution (Emphasis supplied). We further observe that the applicant has admitted entire duty liability as demanded vide the impugned Show Cause Notice and the applicant has made full and true disclosure of its duty liability and has co-operated in the proceedings before the Bench. Accordingly, the Bench passes the following order under Section 127C(7) of the Act for settlement of this case :- Customs duty xxx: xxx xxxxxx Interest xxx xxx: xxxxxx Fine and Penalty : xxx xxx xxxxxx Prosecution In: this case, FIRs were filed on 24-8-2004 and in May, 2004 and these dates should be taken as the dates on which pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be construed to mean as to when challan is presented as mere lodging of FIR cannot be treated as proceedings for prosecution. According to the learned counsel, an FIR is merely a First Information Report which may constitute basis for undertaking investigation by the competent officer. It is only after investigation and presentation of challan that the proceedings for prosecution could be deemed to have been initiated. Learned counsel has pointed out that in cases where on investigation no case is made out then the police has to file cancellation report under Section 169 Cr.P.C. In support of his submission, learned counsel has placed reliance on a judgment of Hon'ble the Supreme Court in the case of Ashirvad Enterprises v. State of Bihar, 2004 (168) E.L.T. 433 and a Single Bench judgment of Madras High Court in the case of M. Natarajan v. State, 2006 (197) E.L.T. 476 (Mad.) and argued that although the aforementioned two judgments have arisen from the provisions of Income-tax Act and the power of immunity given to Settlement Commission under Section 245H(1) of the Income-tax Act, 1961, yet the language used in the proviso to Section 245H(1A) being pari materia deserves to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions made by learned counsel for the parties, examined the record with their assistance and are of the view that this petition deserve to be allowed. It would be appropriate at the outset to first examine the provisions of Section 127H of the Act along with its proviso, which reads thus :- "127H. Power of Settlement Commission to grant immunity from prosecution and penalty. - (1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under Section 127B has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his duty liability, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also either wholly or in part from the imposition of any penalty, fine and interest under this Act, with respect to the case covered by the settlement : Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l empowered to issue process asking the accused to appear. In other words, the police do not enjoy the final word which has been left to be decided by the Magistrate. In that regard reliance may be placed on few judgments of Hon'ble the Supreme Court in the cases of Abhinandan Jha v. Dinesh Mishra, AIR 1968 SC 117; H.S. Bains v. U.T. Administration Chandigarh, (1980) 4 SCC 631; and State of Orissa v. Habibullah Khan, (2003) 12 SCC 129. These principles have been laid down by Hon'ble the Supreme Court on the basis of a cardinal principle that investigation and 'taking of cognisance' operate in two different areas and their water flows in two parallel channels but they never intermingle [See H.N. Rishbud v. State of Delhi, AIR 1955 SC 196]. It further emerges from a perusal of Section 321 of the Code that once the matter has travelled to the Magistrate by virtue of a report submitted under Section 173(2) of the Code then the consent of the court would be necessary. The aforementioned view is supported by a judgment of Hon'ble the Supreme Court in the case of Assistant Collector of Custom, Bombay v. L.R. Melwani, 1999 (110) E.L.T. 317 (S.C.) = AIR 1970 SC 962. In that regard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding for prosecution has commenced. It is only before that stage alone that the Settlement Commission would be competent to grant immunity within the meaning of proviso to Section 127H of the Act. The underlying principle adopted in the proviso to Section 127H of the Act is that once the proceedings for any such offence have been instituted in the sense that the Magistrate has taken cognisance then the Settlement Commission would not be competent to grant immunity. 11.On principle and the policy of criminal law as reflected in various provisions of the Code, we are inclined to accept the submission made by learned counsel for the petitioner that expression proceedings for the prosecution for an offence cannot be regarded to have commenced on the registration of FIR, which expression necessarily implies element of magisterial intervention. Therefore, it is only when a charge sheet is presented before the Magistrate that it could be said that proceedings for the prosecution for any offence have been instituted. The question posed in the first para is answered accordingly. 12.When the aforementioned principles are applied to the facts of the present case, it is clear that FIRs in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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