Prosecution For Customs Duty Evasion Can't Be Initiated As The Valuation Of The Goods Is Less Than Rs.1 Crore: Delhi High Court

The single judge bench of Justice Chandra Dhari Singh has observed that the department has not examined any witness to prove its case against the petitioner. The Court below while passing the summoning order has not assigned any reason for summoning the petitioner.

The Director of Revenue Intelligence (DRI) filed a criminal complaint under Section 132 and 135 (1)(a) of the Customs Act, before the Trial Court. The complaint stated that intelligence reports have been received that M/s Elgin Electronics, of which petitioner was the Proprietor.

It was alleged that the Elgin Electronics is in the business of importing public address systems, sound systems for auditorium etc. without payment of customs duty. On the basis of the inputs, a search was conducted on 13th July 2009 by the DRI at the premises of the firm. Goods imported by the firm were detained and inquiry was made from the accused persons about the value of the detained goods. The petitioner furnished an approximate value of the goods but no document was given to the DRI. The goods detained were then seized on the reasonable belief that the goods were imported without payment of customs duty.

It was alleged that during the course of investigation, documents pertaining to retail Invoices raised by the firm were found to be fake.

The Trial Court issued summons to the petitioner dispensing with the examination of the complainant, who was a public servant at the pre- summoning stage. The petitioners being aggrieved, challenged the order by way of filing Criminal Revision before Additional Sessions Judge. The criminal revision was dismissed by the Revisional Court. Hence, the Criminal Misc Petition under Section 482 of Cr.P.C. was preferred by the petitioners.

The petitioner submitted that no case under Section 132 of the Customs Act was made out against the petitioners. The petitioners never made, signed, used any document, declaration or statement in the course of the business knowingly or under a belief that the declaration, document or statement was false. There was no violation as contemplated under Section 111 of the Customs Act as the petitioners are neither importer of goods nor associated in any capacity with any illegal import of the subject goods. As per Section 135(1)(a) of the Customs Act, action can only be taken in respect of any goods, where market price of which exceeds Rs.1 Crore. However, the value of the goods assessed by the department was only Rs.77,16,228/-, which was less than 1 Crore.

The petitioner contended that the CMM did not have the territorial jurisdiction to entertain the complaint. There was a notification of the Registrar General, as per which prosecutions for violation of the Customs Act are to be dealt with by the Criminal Courts at Patiala House, New Delhi. Therefore the Court of the CMM, New Delhi District has been specifically conferred with the jurisdiction to entertain all prosecutions under the said Act pertaining to Delhi.

The petitioner stated that there was nothing to show that the petitioners made any false declaration or prepared false documents and therefore, they are not liable to be prosecuted under Section 132 of the Customs Act. The complaint was barred by limitation as per the provision of Section 132 of the Act. Limitation in such a case as provided under Section 468 of the Cr.P.C. is only 1 year. However, the complaint was filed by the respondent on 26th October 2013, whereas the incident in this case pertains to the year 2009 and, therefore, the complaint was barred by limitation.

The court held that there was nothing to show that the petitioners made any false declaration or prepared false documents and, therefore, he is not liable to be prosecuted under Section 132 of the Customs Act. Moreover the complaint was barred by limitation as per the provisions of Section 132 of the Customs Act.

The court noted that it was the duty of the department to prove its case against the petitioners and show sufficient evidence on record. However, the department did not examine even the panch witnesses to prove its case.

Case Title: Suresh Chand Gupta Versus State of Govt. Of NCT

Citation: 2022 LiveLaw (Del) 508

Dated: 25.05.2022

Counsel For Petitioner: Advocate Mukesh Anand

Counsel For Respondent: APP Raghuvinder Varma

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