Draconian arrest powers under Customs Act - need for a controlled exercise
FEBRUARY 24, 2016
By Manish Jain
THERE is saying that power corrupts, and absolutely power corrupts absolutely. This implies that there has to be reasonable restrictions on the exercise of power, though existence of power itself is not questioned. One such instance is power of arrest under Section 104 of the Customs Actespecially in assessment cases i.e. where bill of entry is filed by the importer and goods are assessed by the customs officer. Section 104 of Customs Act reads as under:
SECTION 104. Power to arrest. - (1) If an officer of customs empowered in this behalf by general or special order of the Commissioner of Customs has reason to believe that any person in India or within the Indian customs waters has committed an offence punishable under Section 132 or Section 133 or Section 135 or Section 135A or Section 136, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.
(2) **
(3) ***
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(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence punishable under Section 135 relating to -
(a) evasion or attempted evasion of duty 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 the Act, if the amount of drawback or exemption from duty exceeds fifty lakh rupees, shall be non-bailable.
Thus, sub-section (6) of Section 104 of the Act provides that notwithstanding anything containing in the Code, offences punishable under Section 135 of the Act in the following circumstances shall be non-bailable i.e. bail has to be obtained by court.
(a) evasion or attempted evasion of duty exceeding fifty lakh rupees ; or
(b) prohibited goods
(c) mis-declaration of import or export of any goods having market price exceeding one crore rupees; or
(d) fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under the Act, If the amount of drawback or exemption from duty exceeds fifty lakh rupees.
Power to arrest a person by a Custom Officer is statutory in character thus the existence of power per se cannot be questioned. However, at the same time there is need for caution and reasonable restrictions on exercise of such power of arrest.
Thus, the power must be exercised on objective facts of commission of an offence enumerated and the custom officer has reason to believe that a person sought to be arrested has been guilty of commission of such offence. The power to arrest thus is circumscribed by objective considerations and cannot be exercised on whims, caprice or fancy of the officer.
CBEC circulars emphasizing arrest only in exceptional cases
CBEC has time to time issued various circulars emphasizing the fact that arrest should be effected only in exceptional situations. In this regard recent Circular No. 28/2015-Cus., dated 23-10-2015 may be referred to :
Arrest and Bail in relation to offences punishable under Customs Act, 1962 - Revised guidelines
F.No. 394/68/2013-Cus(AS)
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Accordingly, the para 2.3 of the existing guideline issued vide F. No. 394/68/2013-Cus (AS), dated 17-9-2013 shall read as under:-
"2.3 ….., it is clarified that arrest in respect of an offence, should be effected only in exceptional situations which may include :
(a) Cases involving unauthorised importation in baggage
(b) Cases of outright smuggling of high value goods such as precious metal, restricted items or prohibited items ;
(c) In a case related to importation of trade goods (i.e. appraising cases) involving wilfulmis-declaration in description of goods/concealment of goods. ;
(d) Fraudulent availment of drawback or attempt to avail of drawback or any exemption from duty provided under the Customs Act, 1962 , if the amount of drawback or exemption from duty is Rs. 1,00,00,000/- (Rupees One Crore.
(e) The above criteria of value mentioned in sub para 2.3 (a) to 2.3 (d) would not apply in cases involving offences relating to items i.e. FICN, arms, ammunitions and explosives, antiques, art treasures, wild life items and endangered species of flora and fauna.
It is often complained by the assessee that threat of arrest is the prime reasons for making confessional statements even thought the issue in subject cases pertains to the interpretation of the exemption notification, valuation of goods or classification issues.
It is not out of place to submit that due care has to be taken to ensure individual freedom and liberty by laying down norms and providing safeguards so that the power of arrest is not abused or misused by the authorities.
Suggestions: a way forward
• It is suggested that arrest should not be resorted in following assessment cases regardless of the customs duty involved :
• goods are presented before customs for assessment and assessments are finalized.
• Valuation/ classification/exemption
• For the purpose of arrest relevant threshold evasion ought to be the period of last one year not in last 5 years or more
• Regular importersshould not be arrested in assessment cases
• Quantum of imports made by the assesseehas to be a factor while exercising power of arrest
• Memo of arrest has to be prepared with admissible evidence. In other words there shall not be only allegations
• Arrest must be pre-approved with committee of commissioners;
• Option of furnishing bank guarantee covering full duties must be given to accused before arrest.
Thus it is desired that suitable instructions may be issued or amendment may be made in section 104 of the Customs Act,1962.
(The author is Principal Associate, Lakshmikumaran&Sridharan, Ahmedabad.)
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