Duty evasion prosecution cannot be brought as value of goods is less than Rs.1 Crore: Delhi High Court

The Delhi High Court ruled that proceedings against the applicant cannot be brought under Section 135 (1) (a) of the Customs Act as the valuation of the goods is less than Rs.1 Crore.

The single judge bench of Judge Chandra Dhari Singh observed that the ministry did not question any witness to prove its case against the petitioner. The lower court, when adopting the summons order, gave no reason to summon the applicant.

The Director of Tax Intelligence (DRI) filed a criminal complaint under Section 132 and 135 (1) (a) of the Customs Act, before the Court of First Instance. The complaint stated that intelligence reports had been received indicating that M/s Elgin Electronics, owned by the petitioner.

It was alleged that Elgin Electronics imported sound systems, auditorium sound systems, etc., without payment of customs duties. On the basis of the information collected, a search was carried out on July 13, 2009 by the DRI in the premises of the firm. The goods imported by the company were detained and an investigation was conducted with the defendants on the value of the goods detained. The petitioner provided an approximate value of the goods but no document was given to the DRI. The detained goods were then seized based on the reasonable belief that the goods had been imported without payment of customs duties.

It was alleged that during the investigation, documents relating to retail invoices issued by the company were found to be false.

The court of first instance issued the petitioner with a summons to appear exempting him from questioning the complainant, who was a civil servant at the pre-summons stage. The applicants, aggrieved, challenged the order by filing a criminal review before the judge of the additional sessions. The criminal review was dismissed by the Court of Review. Therefore, the Miscellaneous Criminal Petition under Section 482 of the Cr.PC was preferred by the petitioners.

The petitioner argued that no action under Section 132 of the Customs Act had been established against the petitioners. The plaintiffs never made, signed, used any document, statement or statement in connection with the business knowingly or in the belief that the statement, document or statement was false. There was no violation as contemplated under section 111 of the Customs Act, as the petitioners are neither importers of the goods nor associated in any capacity with any unlawful importation of the goods. goods in question. According to Section 135 (1) (a) of the Customs Act, action can only be taken in respect of any goods whose market price exceeds Rs.1 Crore. However, the value of the goods assessed by the department was only Rs.77,16,228/- which is less than 1 Crore.

The petitioner argues that the CMM does not have territorial jurisdiction to hear the complaint. There has been a notification from the Registrar General that prosecution for breach of Customs Act shall be dealt with in the Criminal Courts at Patiala House, New Delhi. Therefore, the Court of CMM, District of New Delhi has been specifically conferred with jurisdiction to hear all suits under the said Delhi Act.

The Claimant stated that there was no evidence that he had made a false statement or prepared false documents and therefore was not liable to prosecution under Section 132 of the Customs Act. The complaint was prescribed by prescription in accordance with the provision of Article 132 of the law. The prescription in such a case as provided for in article 468 of the Cr.PC is only 1 year. However, the complaint was filed by the defendant on October 26, 2013, while the incident in this case relates to the year 2009 and, therefore, the complaint was time-barred.

The court held that there was no evidence that the claimants had made a false statement or prepared false documents and therefore he was not liable to prosecution under Section 132 of the Customs Act. Moreover, the complaint was time-barred in accordance with the provisions of Article 132 of the Customs Law.

The court noted that it was the department’s duty to prove its case against the plaintiffs and provide sufficient evidence on file. However, the department did not even examine panch witnesses to prove its case.

Case title: Suresh Chand Gupta vs. Government State. From NCT

Quote: CRL.MC 1416/2017 & CRL.MA 5836/2017

Date: 25.05.2022

Applicant’s lawyer: Lawyer Mukesh Anand

Counsel for the Respondent: APP Raghuvinder Varma

Click here to read/download the order

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