By TIOL News Service

MUMBAI, MAR 16, 2018: FACTS in brief are that on 09.02.2001, pursuant to seizure of 200 gold bars of foreign origin valued at Rs.1,02,80,000/- from the possession of Abdul Sathar, a passenger who had arrived by Emirates flight No. EK-500 from Dubai and intercepted when he was about to leave the airport through the green channel, DRI initiated investigation. Abdul Sattar admitted to smuggling gold bars of foreign origin in complicity with several other persons including two officers of Customs.

Proceedings were initiated against various noticees and an order came to be passed by the adjudicating authority.

In appeal before the Tribunal, filed in the year 2002 , noticees John Barretto, Santosh Talpade (Customs officers), Abdul Sattar and others submitted that the impugned order has been passed ex-parte without giving opportunity of hearing; that the department has not supplied the relied upon documents despite repeated requests; that in view of the facts of the case, necessary stay may be granted and the matter may be remanded to the original authority for de novo adjudication after affording reasonable opportunity of being heard and after supplying the relied upon documents so that they can defend themselves effectively.

The Tribunal by its order Order No. 382-395/2003-WZB/C-III dated 05 March 2003 was satisfied that there was a clear cut case of violation of principles of natural justice. Therefore, after waiving the pre-deposit, the impugned order was set aside and the matter was remanded to the adjudicating authority for de novo adjudication after affording reasonable opportunity of being heard and after furnishing relied upon documents to the appellants and to pass a fresh speaking order.

In denovo proveedings, the Commissioner of Customs (Adj) Mumbai vide order CAO No. 85/2008/CAC/CC/KS dated 31.03.2008 confiscated the seized gold under Section 111 of the Customs Act, 1962 and imposed penalties on various persons found to have been involved in smuggling or abetting the smuggling under Section 112(a) & (b) of the Act. A penalty of Rs. 5.00 lakhs was imposed on Arif Shaikh. However, proposal to penalize Santosh Talpade was dropped.

Revenue went in appeal before the CESTAT challenging the dropping of penalty against Santosh Talpade and Arif Shaikh too filed an appeal against imposition of penalty.

The CESTAT by its order A/309-310/2010-WZB/C-II/CSTB dated 28 January 2010 while rejecting the appeal of the Revenue observed -

"…As regards the mahazar used as evidence against Shri Talapde, the allegations against the respondent stand established if this mahazar is accepted as evidence. We find that the mahazar is not a voluntary account of any transaction rendered by the respondent or the passenger. Mahazar is usually an account of a static scene or an inventory of things found on search in presence of witnesses, recorded by officers, to be used in a judicial or quasi judicial proceeding. It is not a legal device that can validate depositions as being voluntary. We conclude that the proceedings were conducted in such a manner that the respondent was under compulsion to testify whatever the investigating agency desired. We find that a statement obtained in a mahazar proceeding cannot be a voluntary one given on one's freewill. Especially if the same has been retracted. All the statements recorded from the respondent have to be seen in the light of the retraction and these have to be proved with further evidence.

13. We reject the statements as evidence being not voluntary and true. As held by the Apex Court in the Pavunny case, rule of prudence and practice requires that a Court seeks corroboration of the retracted confession from other evidence. In the instant case the passenger who incriminated the respondent did not appear before the authorities. Other major party to the transactions Shri. John Baretto did not also participate in the proceedings. No corroboratory evidence of the respondent's involvement was gathered by the revenue. In the circumstances, we find no reason to interfere with the impugned order. Accordingly, the appeal filed by the Revenue is rejected."

The appeal of Arif Shaikh was allowed on the ground that there is no finding of involvement of the appellant in the offending transactions in the impugned order.

Be that as it may, against this order,in the matter of Santosh Talpade, the Revenue filed an appeal (Customs Appeal No. 6 of 2011) before the Bombay High Court.

Incidentally, in view of the litigation policy, Revenue withdrew the appeal against the present petitioner on 10/04/2017 and as a consequence there are no departmental proceedings under the Customs Act against the petitioner as on date.

Nonetheless, the parallel criminal proceedings, initiated against the petitioner seeking his prosecution based on the departmental proceedings,continued.

In the aforesaid background, the petitioner Santosh Talpade would urge before the High Court that in absence of any departmental proceedings, prosecution of the present petitioner cannot be continued. Support is drawn from the Judgment of the Apex Court in the matter of Radheshyam Kejriwala Vs. State of W.B. - 2011-TIOL-19-SC-FEMA , particularly findings recorded in paragraph nos. 25, 26, 29 to 31, 39 & 47.Inasmuch as it is submitted that criminal prosecution against the petitioner cannot be continued.

The counsel for the Revenue submitted that the Customs Appeal was withdrawn by the Revenue only because there was a policy of the Union of India not to proceed ahead with such appeals; that independent of the departmental proceedings, prosecution can be justified.

The High Court inter alia observed -

+ Fact remains that criminal prosecution of the petitioner is based on some departmental proceedings which were formed to be basis for taking out Customs Appeal before the Division Bench of this Court which already stood withdrawn upon the request of the Revenue as is apparent from the order dated 10/04/2017.

+ Once the basis for such prosecution being departmental proceedings have already come to an end in favour of the petitioner and against Revenue, the issue, in my opinion is squarely governed by the Judgment of the Apex Court in the case of Radheshyam Kejriwal [Cited supra].

+ I hardly notice any substance in the submissions made by the counsel for the respondent Revenue that inspite of the departmental proceedings having come to an end finally against the petitioner, still criminal prosecution against him under the Customs Act will continue.

In fine, the prosecution initiated against the petitioner in Criminal Complaint no. 43/S/2013 pending on the file of Chief Metropolitan Magistrate, Esplanade, Mumbai was quashed and set aside with consequential reliefs.

(See 2018-TIOL-459-HC-MUM-CUS)