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1 IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) No. _____ _ OF 2017

IN THE MATTER OF:

Dipak Bajaj S/o. Late Awat Ram Bajaj,

Permanent Resident of House No.12/6 – Flaxley Road,

Modern, SM46L.J., London (UK), Now Residing at

C/o. K.T.Dubey, ‘Giriraj’, 2nd Floor,

Dhal Road, Junagadh,

Gujrat-362001 ….Petitioner

Versus

1. Union of India Rep. by its Secretary, Ministry of External Affairs

E Block, Central Secretariat,

New Delhi 110001.

2. Commissioner of Customs, Hall No. 3, 5th & 11th floor,

Kendriya Bhawan, Sector – H, Aliganj,

Lucknow,

Uttar Pradesh 226024

3. Assistant Commissioner, Customs Duty,

P.O. Nautanwa, Maharajganj-273164

Uttar Pradesh. ….Respondents

CIVIL WRIT PETITION FILED UNDER ARTICLE 32 OF THE

CONSTITUTION OF INDIA READ WITH ORDER XXXVIII,

RULES 1-13 OF SUPREME COURT RULES, 2013 FOR THE

ISSUANCE OF A WRIT IN THE NATURE OF MANDAMUS FOR

THE ENFORCEMENT OF FUNDAMENTAL RIGHTS UNDER

ARTICLE 21 OF THE CONSTITUTION OF INDIA, 1950.

Bar & Bench (www.barandbench.com)

2 TO, THE HON’BLE CHIEF JUSTICE OF INDIA

AND HIS COMPANION JUSTICES OF THE SUPREME COURT OF INDIA

THE HUMBLE PETITION OF THE PETITIONER ABOVE NAMED.

MOST RESPECTFULLY SHOWETH

1. That the Petitioner in this Writ Petition seeks to challenge the

seizure and subsequent impounding of his passport by the

Customs Authority without the authority of law. It is the case

of the Petitioner before this Hon’ble Court that Petitioner’s

fundamental right under Article 21 of the Constitution of India

has been violated as his personal liberty has been restricted

by the seizure and subsequent impounding of his passport by

the Customs Authority without the authority of law.

Petitioner who is a British citizen and a holder of British

passport has been convicted for smuggling gold from Nepal to

India, by the Special Chief Judicial Magistrate in Criminal

complaint No. 765 of 2014 and he was sentenced to undergo

one year simple imprisonment and fine of Rs, 75,000/-. The

Petitioner has completed a sentence of 10 months. Presently,

the Petitioner has been granted bail by Court of Sessions

Judge, Varanasi vide its order dated 11.08.2017 in Criminal

Appeal No. 173 of 2017 wherein the Ld. Sessions Judge

stayed the operation of the order dated 20.07.2017 in Criminal

complaint No. 765 of 2014 upto the extent that the Petitioner

herein deposits half the amount of fine that was imposed on


3 the Petitioner. The Petitioner was released on bail vide this

order on furnishing a personal bond of Rs. 25,000/-. During

the course of proceedings, the Customs Authority has seized

the Petitioner’s foreign passport without following the

procedure under law and the same is under challenge before

this Hon’ble Court.

1A. The Petitioner has not approached any other Court raising

similar reliefs.

2. The following substantial questions of law of public importance

arise in the present writ petition:

(i) Whether the Petitioner’s right to personal liberty under

Article 21 of the Constitution of India has been violated?

(ii) Whether the Customs Authorities in India have the

power to seize and impound a British Passport, which is

effectively the property of the British Government?

(iii) Whether the Indian Government can seize the travel

documents as well as foreign passport without the

authority of Criminal Court in case the foreign passport

holder commits a crime on Indian soil?

(iv) Whether the Custom Authorities are empowered under

the Customs Act, 1962 to seize a foreign passport, given

that they cant seize an Indian passport even, and such

authority lies only with the Passport Authority under the


4 Passports Act, 1967 and that too with regard to an

Indian Passport only?

(v) Whether the Passport Authority under the Passports Act,

1967 has the power to seize a foreign passport because

as per Section 2(b) a ‘passport’ is defined as passports

issued or deemed to have been issued under the

Passports Act, 1967?

(vi) Whether the seizing of the Passport of a foreign national

thereby restricting his movement would violate Article

14, 19 and 21 of the Constitution of India?

3. The chronology of events that urged the petitioner to

approach this Hon’ble Court are as follows:

a) The Petitioner is a British Citizen. He runs his business in

United Kingdom and is a passport holder of the United

Kingdom. The Petitioner while coming from Nepal was

stopped by the Officers of SSB Sonauli (Nautwana District –

Maharajganj) for checking. During the course of checking

4320 grams of gold totally valued at Rs. 1,09,12,590/- was

found along with other goods and foreign currency. Performa

for arrest was drawn along with the recovery memo. A true

copy of the arrest memo of the petitioner dated 03.04.2014 is

annexed hereto and marked as ANNEXURE-P1[Pages 32-

34]. A true translated copy of the report of testing by Tanish

Jewellers dated 3.04.2014 is annexed hereto and marked as


5 ANNEXURE-P2[Pages 35-36]. A true translated copy of

Panchnama/Recovery Memo dated 03.04.2014 is annexed

hereto and marked as ANNEXURE-P3 [Pages_37-42].

b) Petitioner was handed over by SSB to the officers of Land

Customs Station Sonauli. Ajay Dixit, Commissioner, Customs

(P) Commissionerate, and Lucknow arrested petitioner under

Section 104 of the Customs Act, 1962 (“Customs Act”) on the

charge of smuggling of foreign origin gold weighing 4320

gram on 04.04.2014.

c) Performa of Seizure was drawn wherein a detailed account of

the items found on the Petitioner was recorded. Following

items were found on the Petitioner:-

1. “Golden Coins (Krugerrand FYN GOUD 10Z Fine Gold

South Africa)-Quantity-58 No. s, Weight-1.964 kg.

Cost Rs.40,21,290/-

2. Gold Best Value Cast Bar (Birmingham UK, Pure Fine)

(999.9)-01 kg, Cost Rs.29,25,000/-

3. Gold best value Cast Bar (Unicore Fine Gold

No.18046) (999.9)-500 Gram, Cost Rs.14,62,500/-

4. Small Golden Balls (Grilled)-856 Gram, Cost

Rs.25,03800/-

Total Weight of Gold-4.320 kg


6 Total Cost Rs.10,91,2590 (Rupees One Crore Nine Lakhs

Twelve Thousand Five Hundred Ninety Only)”

It is submitted before this Hon’ble court that at this stage, the

passport of the Petitioner was not seized. It is only at a later

stage that seizure of passport has taken place. A copy of the

Performa of Seizure memo of CHQ Sonauli dated 05.04.2014

is annexed hereto and marked as ANNEXURE-P4 [Pages 43-

48]

d) Petitioner was granted bail on furnishing personal bond and

two heavy sureties vide order dated 28.01.2015 in Criminal

Miscellaneous Bail Application No. 18322 of 2014. A copy of

the order of High Court of Allahabad dated 28.01.2015 in

Criminal Miscellaneous Bail Application No. 18322 of 2014 is

annexed hereto and marked as ANNEXURE-P5 [Pages 49-

50].

e) Office of Customs Commissioner, Aliganj, Lucknow passed the

following order against the Petitioner herein in accordance

with the proceedings relating to the Show cause Notice dated

27.08.2014:-

“(a) I order for absolute confiscation of the 4320

grams foreign origin Gold valued at

Rs.1,09,12,590/- (Rupees One Crore nine lakhs

twelve thousand five hundred and ninety only)

under Section 111 (d) of the customs Act, 1962.


7 (b) I order for absolute confiscation of 10 Currency

notes in the denomination of Rs.500/- with face

value of Rs.5000/- under section 111 (d) of the

Customs Act, 1962.

(c) I order for absolute confiscation of old white

cloth, one pair socks & shoes valued at Nil used for

conceding the said gold, under section 119 of the

Customs Act, 1962.

(d) I impose a penalty of Rs.25,00,000/- (Rupees

Twenty Five Lakhs only) upon Shri Dipak Bajaj

Section 112 of the Customs Act, 1962.”

A true copy of the order of Additional Commissioner Customs

Lucknow in C.No.VIII(10)68-Adj/ADC/NTW/2014 dated

02.03.2015 is annexed hereto and marked as ANNEXURE-P6

[Pages 51-69].

f) The Petitioner moved the Special Chief Judicial Magistrate,

Varanasi in vide Case No. 765 of 2014 wherein he prayed that

few articles recovered from him during his arrest have not

been seized and the same maybe released. The Petitioner had

filed an Application dated 13.03.2015 as well praying for the

release of the following items;- 1. Passport No. 511352051; 2.

Handset Blackberry Fcc No.L6ARCN70UW with battery & SIM.

3. Indian Currency 500x 10, 100x6, 20x1, 10x8; were the


8 personal articles of the Petitioner. Special Chief Judicial

Magistrate, Varanasi vide his order dated 05.05.2015 in Case

No. 765 of 2014 held:-

"Heard & perused file. Applicant/accused

Dipak Bajaj is on bail in the present case. File is

pending trial and statement of witnesses is being

recorded. 4 Kg 320 gms gold is stated to have been

recovered from the possession of acad. Subsequently,

passport, mobile handset with SIM & battery and

Indian currency has also been recovered from

applicant/accused. Learned counsel appeared on

behalf of prosecution has contended that accused has

been released on bail. If passport is given to him then

there are very rare probability that he would comeback

in India. Accused is a foreign citizen. In such situation,

once he goes out of India, his appearance could not be

possible and trial of court would affect adversely. In

the objection, no any objection has been stated about

releasing mobile handset with SIM & battery to

applicant. With regard to remaining case articles, it is

stated that application has been filed before the

competent authority for release.

As applicant/accused is a foreign citizen. In case

passport is provided to him, there is absolute


9 probability of fleeing away out of the country due to

which ensuring his appearance in the case would not be

possible. No any objection has been raised about

releasing remaining articles viz. Mobile handset with

SIM & battery. Therefore, releasing mobile handset

with SIM & battery would be justifiable. Application

is disposed of accordingly.”

A true translated copy of the Application preferred by the

petitioner before Special Chief Judicial Magistrate, Varanasi

dated 13.03.2015 is annexed hereto and marked as

ANNEXURE-P7[Pages_70-73]. A true translated copy of the

order of Special Chief Judicial Magistrate, Varanasi in Case No.

765 of 2014 dated 05.05.2015 is annexed hereto and marked

as ANNEXURE-P8 [Pages 74-76].

g) The Petitioner before the Additional Sessions Judge, Varanasi,

filed Criminal Revision No. 213 of 2015 dated 04.06.2015

against the order dated 05.05.2015 of the Special Chief

Judicial Magistrate, Varanasi in vide Case No. 765 of 2014.

Additional Sessions Judge, Varanasi in Criminal Revision No.

213 of 2015 filed against the order of the Special Chief Judicial

Magistrate, Varanasi in Case No. 765 of 2014 dated

05.05.2015 held:-

“On perusal of file of court below it is evident

that 4320 gms pure gold has been recovered


10 from the possession of revisionist/accused,

market price of which is stated Rs. One Crore

Nine Lakh Twelve thousand Five Hundred

Ninety. Recovery of gold in such huge quantity

from the possession of revisionist shows that he

has been engaged in business of gold. Learned

Magistrate did not release passport of revisionist

taking this ground in impugned order that

revisionist a foreign citizen and there is absolute

probability of fleeing away abroad and after

leaving, ensuring his appearance would not be

possible. I do fully coincide with said order of

the learned Magistrate that court below has

passed justifiable order keeping in view the facts

& circumstances of the case, which does not

require any kind of interference.

Order

Criminal Revision is dismissed. Order dated

05.05.2015 passed by the learned Magistrate is

confirmed.”

A true translated copy of Criminal Revision No. 213 of 2015

filed by the petitioner before Additional Sessions Judge,

Varanasi dated 04.06.2015 is annexed hereto and marked as

ANNEXURE-P9[Pages 77-81]. A true translated copy of order


11 of Additional Sessions Judge, Varanasi in Criminal Revision No.

213 of 2015 dated 22.08.2015 is annexed hereto and marked

as ANNEXURE-P10[Pages 82-86].

h) The aforesaid penalty of Rs, 25,00,000/- (Rupees Twenty Five

Lakhs only) levied by the Customs Commissioner levied by his

order dated 02.03.2015 has been paid by the Petitioner on

date 05.11.2015. A copy of the receipt dated 05.11.2015 of

the Payment of Penalty is annexed hereto and marked as

ANNEXURE-P11 [Pages_87-88].

i) Petitioner filed Application No. 35769 of 2015 under Section

482 of the Criminal Procedure Code before the High Court of

Allahabad seeking quashing of order dated 05.05.2015 passed

by Special Chief Judicial Magistrate, Varanasi in Case No. 765

of 2014 dated 05.05.2015. The present Application was

rejected without any pronouncement on the merits of the case

and the Hon’ble Court held:-

“Considering the facts of the case, without expressing

any opinion on the merits of the applicant’s case, this

application U/s 482 Cr.P.C. is finally disposed of with a

direction to the court below to decide Case No.1 of

2014, under section 104/135 Customs Act, P.S. Sima

Sulk Sonauli, District Maharajganj in accordance with

law without granting unnecessary adjournments to


12 either of the parties as expeditiously as possible

preferably within a period of six months from the date

of production of certified copy of this order, if there is

no legal impediment.”

A copy of the order dated 22.12.2015 in Application under

Section 482 of CrPC numbered as 35769 of 2015 passed by

the High Court of Allahabad is annexed hereto and marked as

ANNEXURE-P12 [Pages_89-90].

j) Petitioner filed an Application dated 25.01.2016 for of

Compounding of Offence under Customs (Compounding of

Offences) Rules, 2005 in view of the ongoing prosecution

against the Petitioner by the Customs Authority, Lucknow at

Varanasi for possession/recovery of 4320 grams of gold of

foreign origin brought to India from Nepal. The Petitioner

prayed before the Chief Commissioner of Customs, Patna on

humanitarian grounds as his family was in bad financial

condition, and he requested for compounding so that the go

back to United Kingdom. A copy of the Application dated

25.01.2016 preferred by the petitioner to the Chief

Commissioner of Customs, Patna is annexed hereto and

marked as ANNEXURE-P13[Pages 91-93].

k) The Chief Commissioner of Customs, Patna responded to the

Application for Compounding by issuing a Show Cause Notice


13 dated 04.10.2016 to the Petitioner to show cause as to why

his Application for Compounding should not be rejected. A

copy of the Show Cause Notice issued by the 2nd Respondent

to the petitioner dated 04.10.2016 is annexed hereto and

marked as ANNEXURE-P14[Pages 94-100].

l) Petitioner responded to the Show Cause notice dated

04.10.2016 vide his reply dated 06.10.2016 wherein he prayed

that his Application for compounding may not be rejected for

the reason:

“8.It is further submitted that the Notification No.

09/96- Cus dated 22.01.1996 as spelt out in the

Show Cause Notice for holding the goods as

"prohibited" for the purpose of sub-clause (ii) of

clause (c) of provisio to sub-section (3) of section

137 of the Customs Act, 1962, has been issued under

powers conferred under sub-section (1) of Section 11

of the Customs Act, 1962 and not under Section 5 of

the the Foreign Trade (Development and Regulation)

Act, 1992. Thus it may be appreciated that the case

of the applicant is not statutorily debarred from

compounding and hence should be allowed. It has

also been well settled by the Hon'ble Supreme Court

in the case of Pradip Nanjee Gala Vs. Sales Tax

Officer [2015-TIOL-95-SC-CT-LB], that in a taxing


14 statute one has to look merely at what is clearly said

and there is no room for any intendment. Nothing is

to be read in, nothing is to be implied. One can fairly

look at the language used. Applying the said

principle, it is submitted that prohibitions under

Customs Act, 1962 cannot be held to be debarred

under sub-clause (ii) of clause (c) of proviso to sub-

section (3) of section 137 of the Customs Act, 1962,

for debarring the prohibition must be under the

specified provision of the Act. Therefore, it may be

appreciated that the case of applicant is not covered

under the said provision and hence his application of

compounding of offences must be allowed.”

A copy of the Petitioner’s reply to the show cause notice send

by the 2nd Respondent dated 06.10.2016 is annexed hereto

and marked as ANNEXURE-P15 [Pages_101-115].

m) Petitioner herein filed Writ Petition (Criminal) No. 1209 of

2016 before the High Court of Patna praying for:-

“To issue a writ in the nature of Mandamus

commanding theauthorities to allow the application

dated 25.01.2016 for compounding of offence under

Customs (Compounding of Offences) Rules, 2005.


15 ii) To issue a writ in the nature of direction

commanding the authorities to release the Passport

of the petitioner.

iii) To grant any other relief or reliefs to which the

petitioner is entitled in the facts and circumstances

of the case.”

A copy of the Writ Petition (Criminal) No. 1209 of 2016 filed

by the petitioner before the High Court of Judicature at Patna

dated nil is annexed hereto and marked as ANNEXURE-P16

[Pages_116-144].

n) Chief Commissioner of Customs (Preventive) Zone, Patna

issued Order No. 01/Compounding/2017 dated 16.01.2017

wherein it was held that the Petitioner has failed to disclose all

the material facts in his application filed for compounding of

offence before the Compounding Authority. Disclosure was

found to be incomplete and inaccurate. Accordingly, the

Application for Compounding was rejected. A copy of the

Order No. 01/Compounding/2017 dated 16.01.2017 passed by

the 2nd Respondent is annexed hereto and marked as

ANNEXURE-P17[Pages_145-188].

o) Special Chief Judicial Magistrate, Varanasi vide his order dated

20.07.2017 has convicted the Petitioner herein under Section

135(1)(i) of Customs Act, 1962 in Criminal complaint No. 765

of 2014 and he was sentenced to undergo one year simple


16 imprisonment and fine of Rs, 75,000/-. The Ld. Magistrate

held:-

“In the opinion of the court, on the basis of

evidence adduced on behalf of prosecution, charge

of offence under section 135(1)(i) Custom Act

proves against accused Deepak Bajaj beyond

doubt, therefore, accused Deepak Bajaj is liable to

be convicted for the offence punishable under

section 135(1)(i) Custom Act.

Accordingly, accused Deepak Bajaj is convicted

for the charge of offence punishable under section

135(1)(i) Custom Act in Criminal Complaint Case

No. 765/2014. Accused is on bail, having cancelled

his personal bond and surety bond, sureties are

discharged from their liabilities. Today accused is

present in court he be taken in judicial custody.

And would be heard on the quantum of sentence.

On hearing on the quantum of sentence and

perusal of file keeping in mind the circumstance

that accused is Non-Indian British citizen, on

account of seizing his passport in this case, he has

not been able to meet is family for the last more

than three years. Pashas not revealed any other


17 criminal history or conviction of accused in any

case. Therefore, keeping in view the facts &

circumstances of the case, sentencing accused

Deepak Bajaj with simple imprisonment of one

year and fine of Rs. 75,000/- (Seventy five

thousand only) under section 135(1)(i) Custom Act

seems to be justifiable.”

A true translated copy of the order in Crl. Complaint Case No.

765/2014 of the Special Chief Judicial Magistrate, Varanasi


ANNEXURE-P18[Pages 189-210].

p) Hon’ble High Court of Patna vide its order dated 26.07.2017

rejected the prayer of the Petitioner in Writ Petition (Criminal)

No. 1209 of 2016 on the ground:-

“In my view, the referred case is not applicable in the

facts and circumstances of this case as no part of cause

of action arose within the territorial jurisdiction of this

Court and in the case of KUSUM (supra) also the

Hon’ble Apex Court had considered that cause of action

or part thereafter even a smallest part arisen within the

territorial jurisdiction of the High Court would be

sufficient to confer jurisdiction to entertain application

under Article 226 of the Constitution of India. In the


18 present case no part of cause of action is within the

territorial jurisdiction of the court. Hence, the case

(supra) is not helping the petitioner.”

A copy of the judgment dated 26.07.2017 passed by the High

Court of Judicature at Patna in Crl. Writ Jurisdiction Case No.

1209 of 2016 is annexed hereto and marked as ANNEXURE-

P19 [Pages_211-218].

q) Court of Sessions Judge, Varanasi vide its order dated

11.08.2017 in Criminal Appeal No. 173 of 2017 stayed the

operation of the order dated 20.07.2017 in Criminal complaint

No. 765 of 2014 upto the extent that the Petitioner herein

deposits half the amount of fine that was imposed on the

Petitioner. The Petitioner was further released on bail vide this

order on furnishing a personal bond of Rs 25,000/-.

A copy of the order passed by the Court of Sessions Judge,

Varanasi dated 11.08.2017 in Criminal Appeal No. 173 of 2017

is annexed hereto and marked as ANNEXURE-P20

[Pages_219-221].

r) Petitioner sent an application dated 11.08.2017 to the

Commissioner of Customs, Lucknow requesting for the release

of his passport. The Commissioner of Customs vide his reply

dated 30.08.2017 rejected the Petitioner’s request for release

of his passport, Lucknow in view of the order dated

05.05.2017 passed by the Special Chief Judicial Magistrate,


19 Varanasi in Criminal Complaint No. 765 of 2014. A Copy of the

Application preferred by the petitioner to the 2nd respondent


ANNEXURE-P21 [Pages_222-224_]. A true copy of the reply

of Commissioner of Customs, Lucknow to the petitioner dated

30.08.2017 is annexed hereto and marked as ANNEXURE-

P22 [Page 225].

s) The Petitioner is constrained to approach this Hon’ble Court

under Article 32 of the Constitution of India as his Rights

under Article 14, 19 and 21 of Constitution of India.

4. GROUNDS

A. It is submitted that Petitioner herein who is a British citizen,

consequently holds a British passport. The Special Chief

Judicial Magistrate, Varanasi for smuggling gold from Nepal to

India, has convicted him and sentenced him to undergo a

custody. Petitioner has served a custody of ten months as

well, however, the Petitioner has been deprived of his

passport on the ground that he will leave the country, which

will hamper the adjudication of the charges against him. It is

submitted that the Customs Authority at Varanasi has seized

the ‘foreign passport’ of the Petitioner without the authority of

law. It is the case of the Petitioner that in view of the passport

being seized without the authority of law, the same maybe


20 released. The Petitioner seeks to challenge the seizure of his

passport before this Hon’ble Court on the basis that he is a

foreign passport holder and the Indian authorities such as

Customs Authorities as well as the Passport Authority under

the Passport Act, 1967 are not entitled by law to seize or

impound a foreign passport.

B. It is submitted that the present Writ Petition raises a

substantial question of law before this Hon’ble Court in as

much as the treatment of a foreign passport is absent from

the Indian law at present, in case the foreign passport holder

commits a crime on Indian soil. Indian law is silent on the

treatment of foreign passport in case the foreign passport

holder commits a crime. Therefore, the seizure of Petitioner’s

foreign passport is without the authority of law and hence

Article 21 is violated.

C. It is submitted that the Passports Act, 1967 in our humble

submission applies to passports issued under the Act, i.e.

Indian Passports. As per Section 2(b) of the Passports Act,

1967 reads as:

“(b) ‘passport’ means a passport issued or deemed

to have been issued under this act”

From a perusal of the abovementioned section it can be seen

that ‘passport’ means a passport issued under the Passports

Act, 1967. Petitioner’s passport does not fall into this category


21 as it is a passport issued by the British Government.

Therefore, even the Passport Authority under the Passports

Act, 1967 cannot seize the foreign passport of the Petitioner.

Hence, at present there is no law governing the treatment of

foreign passports under Indian law. It is further submitted

that the only power available to Indian Authorities is only to

revoke the visa as per Passport Entry Into India Rules, 1950.

As per Rule 5A:

“5-A. Any diplomatic, consular or passport authority

referred to in Cl. (iv) or Cl. (iv-a) and Cl. (iv-b) of

Clause 5 may at any time and without assigning any

reason make an order that the endorsement by way of

visa made on a passport shall be of no effect and may

for this purpose require the production of the passport

before it and cancel the visa endorsement made

thereon.”

D. It is submitted that the de facto Petitioner’s passport has been

‘impounded’ by the Customs Authorities. Petitioner’s passport

has been lying in the custody of the Customs Authorities since

2014. As per the judgment of this Hon’ble Court in Suresh

Nanda v. CBI (2008) 3 SCC 674 it was held:

“7. Sub-section (3)(e) of Section 10 of the Act

provides for impounding of a passport if proceedings

in respect of an offence alleged to have been


22 committed by the holder of the passport or travel

document are pending before a criminal court in India.

Thus, the Passport Authority has the power to

impound the passport under the Act. Section 102 CrPC

gives powers to the police officer to seize any property

which may be alleged or suspected to have been

stolen or which may be found under circumstances

which create suspicion of the commission of any

offence.

8. Sub-section (5) of Section 165 CrPC provides that

the copies of record made under sub-section (1) or

sub-section (3) shall forthwith be sent to the nearest

Magistrate empowered to take cognizance of the

offence whereas Section 104 CrPC authorises the court

to impound any document or thing produced before it

under the Code. Section 165 CrPC does not speak

about the passport which has been searched and

seized as in the present case. It does not speak about

the documents found in search, but copies of the

records prepared under sub-section (1) and sub-

section (3).

9. “Impound” means to keep in custody of the law.

There must be some distinct action which will show

that documents or things have been impounded.


23 According to Oxford Dictionary “impound” means to

take legal or formal possession. In the present case,

the passport of the appellant is in possession of CBI

right from the date it has been seized by CBI. When

we read Section 104 CrPC and Section 10 of the Act

together, under CrPC, the court is empowered to

impound any document or thing produced before it

whereas the Act speaks specifically of impounding of

the passport.

10. Thus, the Act is a special Act relating to a matter

of passport, whereas Section 104 CrPC authorises the

court to impound document or thing produced before

it.

Where there is a special Act dealing with specific

subject, resort should be had to that Act instead of

general Act providing for the matter connected with

the specific Act. As the Passports Act is a special Act,

the rule that general provision should yield to the

specific provision is to be applied. (See Damji Valji

Shah v. LIC of India , Gobind Sugar Mills Ltd. v. State

of Bihar and Belsund Sugar Co. Ltd. v. State of Bihar).

11. The Act being a specific Act whereas Section 104

CrPC is a general provision for impounding any

document or thing, it shall prevail over that section in


24 CrPC as regards the passport. Thus, by necessary

implication, the power of court to impound any

document or thing produced before it would exclude

passport.”

Further, Section 10(3) of the Passports Act, 1967 reads as;-

“10. Variation, impounding and revocation of

passport and travel documents.

(3) The passport authority may impound or cause to

be impounded or revoke a passport or travel

document,—

(a) If the passport authority is satisfied that the

holder of the passport or travel document is in

wrongful possession thereof;

(b) If the passport or travel document was obtained

by the suppression of material information or on the

basis of wrong information provided by the holder of

the passport or travel document or any other person

on his behalf:

Provided that if the holder of such passport obtains

another passport, the passport authority shall also

impound or cause to be impounded or revoke such

other passport.

Provided that if the holder of such passport obtains

another passport, the passport authority shall also


25 impound or cause to be impounded or revoke such

other passport.]

(c) If the passport authority deems it necessary so to

do in the interests of the sovereignty and integrity of

India, the security of India, friendly relations of India

with any foreign country, or in the interests of the

general public;

(d) If the holder of the passport or travel document

has, at any time after the issue of the passport or

travel document, been convicted by a court in India

for any offence involving moral turpitude and

sentenced in respect thereof to imprisonment for not

less than two years;

(e) If proceedings in respect of an offence alleged to

have been committed by the holder of the passport

or travel document are pending before a criminal

court in India;

(f) If any of the conditions of the passport or travel

document has been contravened;

(g) If the holder of the passport or travel document

has failed to comply with a notice under sub-section

(1) requiring him to deliver up the same;

(h) If it is brought to the notice of the passport

authority that a warrant or summons for the


26 appearance, or a warrant for the arrest, of the holder

of the passport or travel document has been issued

by a court under any law for the time being in force

or if an order prohibiting the departure from India of

the holder of the passport or other travel document

has been made by any such court and the passport

authority is satisfied that a warrant or summons has

been so issued or an order has been so made.”

From a perusal of the above, it is concluded that the

Petitioner’s passport has been impounded by the Customs

Authority without the authority of law. Further, only the

Passports Authority under the Passports Act, 1967 can

impound a passport. Consequently, the Customs Authority

does not have the right to impound an Indian Passport even.

In the present matter the Petitioner possesses a foreign

passport, by corollary the same cannot be impounded either.

The only authority as per the laws of this country that can

impound a passport is the Passport Authority that too those

which have been issued by them.

E. From a perusal of the abovementioned submissions, it can be

concluded that the Customs Authority and the Court lack the

power to impound a passport. Only the Passport Authority

established under the Passports Act, 1967 could impound a

passport. However, after a reading of Section 2(b) of the


27 Passports Act, 1967 along with Section 10(3) it can be

concluded that even the Passport Authority can impound only

an Indian Passport. In our humble submission, the Passport

Authority also lacks the jurisdiction to impound a foreign

passport. In view of this predicament, it is submitted before

this Hon’ble Court that the question relating to impounding or

seizing of a foreign passport has not been dealt with under

Indian law. It is further submitted that Petitioner’s passport

has been seized without following the due process of law. It is

submitted that by corollary, in the absence of a law governing

the seizure and impounding of foreign passports, the

Petitioner’s passport has been seized without the authority of

law, amounting to violation of the rights of natural justice of

the Petitioner.

F. It is further submitted that the Petitioner’s right to personal

liberty under Article 21 of Constitution of India has been

violated, as his right to free movement has been restricted

without a procedure of law depriving him of such right. It has

been held by this Hon’ble court in Maneka Gandhi v. Union of

India (1978) 1 SCC 248 that:-

“The expression ‘Personal liberty’ in Article 21 is of

the widest amplitude and it covers a variety of rights

which go to constitute the personal liberty of man

and some of item have been raised to the status of


28 distinct fundamental rights and given additional

protection under Article19. Now, it has been held by

this Court in Satwant Singh’s case (supra) that

‘Personal liberty’ and consequently no person can be

deprived of this right except according to procedure

prescribed by law. Prior to the enactment of the

Passport Act, 1967, there was no law regulating the

right of a person to go abroad and that was the

reason why the order of the Passport Officer refusing

to issue passport to the petitioner in Satwant Singh’s

case (supra) was struck down as invalid. It will be

seen at once from the language of Article 21 that the

protection it secures is a limited one. It safeguards

the right to go abroad against executive interference

which is not supported by law; and law here means

‘enacted law’ or ‘State law’ (vide A.K.Gopalan’s case).

Thus, no person can be deprived of his right to go

abroad unless there is a law made by the State

prescribing the procedure for so depriving him and

the deprivation is effected strictly in accordance with

such procedure. It was for this reason, in order to

comply with the requirement of Article 21”

G. It is further submitted that in the absence of a law governing

the seizure and impounding of foreign passport in India, the


29 Petitioner’s right to present his case before the appropriate

Court has been taken away. Petitioner’s passport was seized

summarily as he was no opportunity to present his case as to

why his passport should not be seized.

PRAYER

In view of the aforesaid, it is most respectfully prayed that this

Hon’ble Court may be pleased to:-

(i) Issue appropriate writ in the nature of mandamus to the

respondents to release the passport of the Petitioner

(ii) Issue a writ in the nature of mandamus or any such

other writ direction or orders declaring that the Union of

India or the Customs authority has no authority to hold

back the passport of any foreign citizen and such seizure

would be violation of Article 14, 19 and 21 of the

Constitution of India , 1950 ,

(iii) to grant such other reliefs as may be prayed for and to

which this Hon’ble Court may deem just and necessary

in the facts and circumstances of the case.

AND FOR THIS ACT OF KINDNESS, THE PETITIONER AS IN DUTY

BOUND SHALL EVER PRAY.

DRAWN BY: Adv. Renjith B. Marar & Adv.Vasudha Gupta for M/s. Marar&Iyer FILED BY:

DRAWN ON: 05.09.2017 FILED ON: 22.09.2017

LAKSHMI N. KAIMAL ADVOCATE FOR THE PETITIONER


30


31


32 ANNEXURE-P1

GOVERNMENT OF INDIA

MINISTRY OF FINANCE, DEPARTMENT OF REVENUE OFFICE OF THE ASSISTANT COMMISSIONER OF CUSTOMS

LAND CUSTOMS STATION, SONAULI, MAHARAJGANI

ARREST MEMO

1. NAME OF THE OFFENDER : Dipak Bajaj

2. FATHER’S NAME : Late Awat Ram Bajaj 3. CASTE : Hindu (Sindhi)

4. ADDRESS : H.No. 12,6-Flaxley Road, Modern, SM4 6 LJ, London (U.K)

5. OCCUPATION : Business at London 6. Nationality : British

7. PERSONAL DESCRIPTION : AGE :43 Years (Date of Birth- 04.06.1970 HEIGHT : 5-6”

BUILT : Robust COLOUR OF HAIR : Black

COLOR OF EYES : Black

COMPLEXION : Wheatish

INDETIFICATION MARK : Mole on the right forearm

8. NAME OF THE AREA WHERE :Land Customs Station, Sonauli

OFFENCE COMMITTED

9. NATURE OF OFFENCE : Smuggling of Foreign Origin Gold Weighing 4320 gm.

10. LEGAL PROVISION FOR: Section 104 of the Customs Act,

ARREST 1962.

11. NAME & DESIGNATION OF: Ajay Dixit, Commissioner,

THE OFFICER ORDERING : Customs (P) Commissionerate, ARREST : Lucknow

PLACE:: Land Customs Station, Sonauli, District-Maharajganj. DATE:: 03.04.2014

TIME:: 23.30 hrs.

(Kalpnath Ram)

INSPECTOR LCS, SONAULI

(ARRESTING OFFICER)


33 PERFORMA FOR ARREST

SL POINTS BE COVERED DETAILS

01 Name of BOP/PS/Dist. CHQ Sonauli/

Sonauli/Maharajganj(UP)

02 Date and Time of seizure 02.04.2014 at 2030 hrs

03 Border Pillar No./Pipe

Where apprehended

At Main Gate Sonauli adjacent t

Border Pillai No.517/2

04 The planning part, on

whose intelligence input the

seizure has taken place.

On the intelligence of Sh.Mitul

Kumar, D/o Commandant, 1st

Bn Maharajganj (UP).

05 Was Co-Cooperation of any

other Police Force/Govt.

agencies sought in whole

process?

N/A

06 How exactly the process

was implemented i.e.

raid/Naka/Patrolling etc.

By Special Checking

07 No. of apprehended person

Brief background history of

apprehended person(s)

Dipak Bajaj, S/o. Lt. Awat Ram

Bajaj, age 43 Years, Address:-

6-Flaxely Road, Morden,

SM46LJ, London (UK)

08 To whom the seized items

have been handed over to.

Land Custom Office Sonauli,

Maharajganj (UP)

09 Whether any criminal case

had been registered, if yes

by which agency and under

what section.

Not yet.

10 Interrogation details Enclosed with Seizure Memo

11 The name of SSB personal

involved in the process

Sl/GD Raja Murad Ali

HC/GD Vijay Kumar

HC/GD Vijay Singh

CT/GD Uttam Gogoi

CT/GD Md. Waliur Rehman

CT/GD Adll Hussain


34 CT/GD(F) Jyoti Giri

CT/GD(F) Anuradha Singh

12 Whether Commandant,

SHQ and FIR have given

any reward, is the unit in

charge recommending

rewards, to be given from

FHQ.

Not yet

Handed over by Taken over by

Sd/-

03.04.2017

//True copy//


35 ANNEXURE-P2

Tel. No.9839633795

ESTIMATE

Tanish Jewelers

Opposite P.W.D., Thuthi Chowraha, Nautanwa

Dated: 03.04.2014

S.S.B. Sanauli.

Rate Rs.29250/-

1. Today dated 03.04.2014 at Border Site, Sanauli, S.S.B. Officer

tested & weighted Gold on electronic weighing machine on which

its purity established at 70%, weight came at 1964 gms, price Rs.

40,21,290/-(Rs. Forty lakh Twenty one thousand Two Hundred

Ninety) only.

2. Today dated 03.04.2014 at Border Site, Sanauli, S.S.B. Officer

tested & weighted Gold on electronic weighing machine on which

its purity established at 99.850%, weight came at 856 gms, price

Rs. 25,03,800/-/-(Rs. Twenty five lakh three thousand Eight

Hundred) only.

3. Today dated 03.04.2014 at Border Site, Sanauli, on calling by

S.S.B. Officer for testing & weighting Gold, Vinod Kumar Verma,

weighed & tested on electronic weighing machine:

(1) Pure Fine (2) Umicore


36 1Kg 9999 Feingold

Birmingham 999.9, Weight 500 gms.

(U.K.) 18046

29,25,000/- 14,62,500/-

Total Rs. 43,87,500/-

(Rs. Forty three lakh Eighty seven thousand Five Hundred only).

Sd/-

//True Translated Copy//


37 ANNEXURE-P3

Panchnama/Recovery Memo dated 03.04.2014

Names, address and other particulars of Panch:

1. Shri Vijay Madheshiya son of Shri Nandu Ram Madheshiya,

aged 24 years, occupation-service, resident of Village

Chhapwa, Post Nautanwa, District Mahrajganj.

2. Shri Randhir Singh son of late Parshuram Singh, aged 39

years, occupation –Service, resident of Ward No. 4,

Vishunpuri, Post Nautanwa, District Mahrajganj.

Today dated 03.04.2014 at about 15.30 Hrs. On calling by

officers of Customs Duty, Sonauli, we above-said Panch appeared at

the office of Customs Duty Post Sonauli. Officer gave us

understand that officers of Board Security Force have handed over

them foreign gold (Biscuit, coins & small granuals and Indian &

foreign currency) and one person through their Memo dated

03.04.2014. we panch are required as witnesses to the necessary

legal/departmental proceedings to be initiated by officers about it.

Therefore, officers requested to remain present as witness in the

above-said whole proceedings, which was accepted by we people

keeping in view the national interest. Therefore, officers called Shri

Vinod Kumar Verma M/s. Tanish Jewelers, Nautanwa, Mahrajganj by

making phone call for weighing & testing of gold handed over by

officers, who appeared in the Office of Custom Duty Post - Sonauli


38 with is electronic weighing machine and other equipments.

Officers asked to carry out weighing and testing of foreign gold

handed over to them by S.S.B. On checking gold handed over by

officers Shri Vinod Kumar revealed that on calling by S.S.B. Officer

for testing on 03.04.2014 he had tested & weighted this gold. He

had issued weight and test receipt to S.S.B. Offices on 03.04.2014,

the particulars of which were as under:-

Sr.

No.

Particulars Quantity Weight Value

1 One gold Biscuit of

foreign oaring Purefine

1 Kg 999.9 Birmingham

(UK)

01

Biscuit

1000

gms

Rs.29,25,000/-

2 One gold Biscuit of

foreign origin UMICOE

999.9, 500gms 18046

01

Biscuit

500g,s Rs.14,62,500/-

3 Gold coins of foreign

origin (Krugerrand Fyn

Goud 10Z South Africa

(Purity 70%

58 (in

which

one coin

lying

cut)

1964

gms

Rs.40,21,290/-

4 Small gold granual

Purity8 99.850%

--- 856 gms Rs.25,03,800/-

Total 4320

gms.

Rs.109,12,590/-


39

Thus, the weight & particulars of gold of foreign origin

handed over by S.S.B. was according to the particulars shown in

their memo. On asking by Officers whether the weighing machine

is correct, Shri Vinod Kumar Verma had said that on weighing gold

in this manner, there may be difference of half to one gram in each

time. On showing weight & test receipt available in papers

submitted by S.S.B. Officers, on asking about purity of recovered

gold, as to whether these are the test & weighing receipt, then he

said that these are the weight & test receipts which had been

issued to S.S.B. Offices on 03.04.2014.

In addition to above-said gold, SSB Officers handed over the

following-mentioned articles:-

1. Passport No. 511352051.

2. Handset Blackberry FCC No. L6RCN50UW with Battery and

one Nepali SIM.

3. Foreign Currency, Nepali & Indian Currency recovered,

particulars of which are as under :-

UK Pond 50x2=100, 20x18=360, 5x3=15 Total 475 Ponds,

equal to Indian Rs.47,951/-.

Nepali Currency 100x 3=300, 50x1=50,10x6=60 total 410 NC,

equal to Indian Rs. 256/-.

Indian Currency 500x 10=5000, 100x6=600, 20x1=20,

10x8=8-, Total 5700 IC.


40 4. White color old cloth which was used in keeping gold biscuit

wrapped.

Thereafter officer inquired person handed over abut is name &

address, then he revealed his name Deepak Bajaj son of late

Awatram Bajaj, resident of 6, Flaxy Road, Modern S.M. 46, L.J.

London, U.K. officers carried out Jamatalashi of person handed

over Shri Deepak Bajaj and his belongings in the presence we

panch, in which three bills were recovered from the possession of

Deepak Bajaj, the details of which are as under:-

1. Bill concerning with purchase of gold Bar 500gms of Bullion

By Post – Order No.0214312 dated 31.03.2014.

2. Bill concerning with purchase of 1 Kg gold bar of Bullion By

Post- Order No.0208064 dated 25.02.2014.

3. Bill concerning with purchase of 1 Kg Fine of the Gold Purse

– Nol.0010727 dated 31.03.2014.

On interrogation by officers Shri Deepak Bajaj revealed that

he happens to be a British citizen, he has been running business in

U.K., name of his firm is Om Fashion Jewelry, which has been

engaged in the business of Fashion Jewelry, Bindi, Tattoo and

Purse. He had purchased gold recovered from his possession from

London (U.K.). Shri Bajaj expressed his satisfaction & consent with

the method of weighing gold recovered. He further revealed that

on 02.04.2014 when he was coming India from Nepal, then officers


41 of S.S.B. stopped him at the Border and on checking, the above-said

gold recovered from his possession. On inquiring by officers Shri

Deepak Bajaj revealed that on reaching at Kathmandu Airport he

had not given declaration of above-said gold to Nepal Customs.

Shri Bajaj revealed that the above-said gold has been recovered

out of his jeans, coat and pockets of waist. He had hidden few coins

in his shoes.

Thereafter, on the basis of this reasonable belief that foreign

gold was being brought in India from London via Nepal through

smuggling in violation of provisions of notification No. 9/96-

CU(N.T.) dad 22.01.1996 issued under section 11, Customs Act,

1962, therefore, it is liable to acquisition under the provision of

section 11 of the Customs Act, 1962 and his old clothes and shoes

used in hiding the said gold are liable to be seized under the

provisions of Section 119 of the Customs Act, were seized by

Officers of Customs Post Sonauli at the Boarder under the

provisions of section 110 of the Customs Act. The above-mentioned

10 Indian currency notes of Rs. 500 denominations recovered from

the possession of Shri Bajaj, were seized by officers under

section 110 brining those in India amounts to violation of

provisions of guidelines issued by Reserve Bank of India. In

addition to this, all the Indian & Foreign Currency were returned to

him. Subsequently, passport, mobile phone etc. recovered from the

possession of Shri Bajaj were seized through a List Annexure “A”


42 which is a part of this Panchnama and took in their possession for

further proceeding and investigation. Recovered gold was sale-

packed having kept in a packet and white cloth and shoes used in

hiding gold biscuits and coins were also seal-packed kept in an

another packet and 10 India currency notes of Rs. 500

denominations were seal-packed in an another place and took in

their possession which signatures of Shri Deepak Bajaj and officers

& we panch people put signatures. In addition to articles seized,

officers did not took any other article in their possession.

The above-said whole proceedings was completed peacefully

on 03.04.2015 at about 21.30 Hrs. During this proceeding officers

did not ill-treat Shri Deepak Bajaj in any manner whatsoever and

having been fully satisfied with the whole proceedings, we panch

are putting our signatures on it.

Signatures of party Sd/-

03.04.14

Signatures of officers

Sd/- Inspector

LCS Sonauli

Signatures of panch

Sd/

Sd/-

Annexure ”A”

List of articles of Shri Deepak Baja- 1. Passport No. 511352051

2. Handset Blackberry FCC No. L6ARCN70UW WIH Battery and one Nepali SIM.

Signatures of party Sd/-

03.04.14

Signatures of officers

Sd/-

Inspector LCS Sonauli

Signatures of panch

Sd/

Sd/-

//True Translated copy//


43 ANNEXURE-P4

PERFORMA OF SEIZURE MEMO

SL POINTS BE COVERED DETAILS

01 Name of BOP/PS/Dist. CHQ

Sonauli/Sonauli/Maharajganj(UP)

02 Date and Time of seizure 02.04.2014 at 2030 hrs

03 Place of seizure including

Latitude and Longitude

At Main Gate Sonauli N-

27,28,26.1, E-83,28,28.5

04 Border Pillar No Adjecent to BP No.517/2

05 From where the items

were being smuggled and

whether from Nepal to

India or India to Nepal

Nepal of India

06 Distance of Border Pillar

from place of Seizure

Appx. 10 Meters from place of

seizure

07 Name and Distance of

Nearest Custom station

Land Custom office sonauli at a

distance of appx. 250 meters

from place of seizure.

08 The planning part, on

whose intelligence input

the seizure has taken

place.

On the intelligence of Sh.Mitul

Kumar, D/o Commandant, 1st 3n

Maharajganj (UP).

09 Was Co-Cooperation of any

other Police Force/Govt.

agencies sought in whole

process?

N/A

10 How exactly the process

was implemented i.e.

raid/Naka/Patrolling etc.

By Special Checking

11 Nature, description quality

and worth of the material

seized, whether it has

already been identified or

1. Golden Coins (Krugerrand FYN

GOUD 10Z Fine Gold South Africa)-Quantity-58 No.S. Weight-1.964 kg, Cost

Rs.40,22,290/-=


44 waiting for test report 2. Gold Best Value Cast Bar

(Birmingham UK, Pure Fine)

(999.9)-01 kg, Cost Rs.29,25,000/-

3. Gold Best Value Cast Bar (Unicore Fine Gold No.18046)

(999.9)-500 Gram, Cost Rs.14,62,500/-

4. Small Golden Balls (Grilled)-

856 Gram, Cost Rs.25,03800/- Total Weight of Gold-4.320 Kg

(Total Cost Rs.10,91,2590

(Rupees One Crore Nine Lakhs

Twelve Thousand Five Hundred

Ninety Only)

12 To whom the seized items

have been handed over to.

Land Custom Office Sonauli

13 Whether any criminal case

had been registered, if yes

by which agency and

under what section.

Yes By Custom Authority.

14 Any people

arrested/interrogated

regarding the seizure

culprits, escaped, if any,

how information received

in preliminary

interrogation.

Dipak Bajaj S/o Lt.Awat Ram

Bajaj, Age-43 Years, Address:-

H.No.12,6-Flaxley Road,

Morden, SM46LJ, London

(United Kingdom).

15 The name of SSB

personnel involved in the

process

Sl/GD Raja Murad Ali

HC/GD Vijay Kumar

HC/GD Vijay Singh

CT/GD Uttam Gogoi

CT/GD Md. Waliur Rehman

CT/GD Adll Hussain

CT/GD(F) Jyoti Giri

CT/GD(F) Anuradha Singh

16 Whether Commandant,

SHQ and FIR have given

any reward, is the unit in

Not yet


45 charge recommending

rewards, to be given from

FHQ.

17 Brief Note:- On dated 02.04.2014, special checking has

been conducted at Main Gate Sonauli by the personnel of

‘G’ Coy SSB Sonauli on the intelligence of Sh. Mitul Kumar,

Dy. Commandant 1st Bn Maharajganj (UP). During the

Checking a person was coming from: Nepal side on foot

and reached at Main Gate Sonauli where he has been

stopped by the checking party of 'G' Coy Sonauli 1st Bn

Maharajganj (UP) for checking purpose. During the

checking of person it has been found that some golden

coins were kept hidden in his right pent pocket. After that

he has been brought inside the campus of Main Gate

Sonauli for further checking where his body and belongings

has been searched and found that one Golden Bar was kept

hidden inside the pocket of his jacket wrapped in a white

cloth, another Golden Bar was kept hidden inside the back

Docket of his pent. After thoroughly checking of his body, it

has found that some small golden balls (grilled) packed in

transparent polythene, which were kept hidden inside his

under wear and some more golden coins were also found in

his socks. After that accused persons has been brought to

the Campus of 'G' Coy SSB Sonauli for preliminary


46 investigation and total weight of Gold has been measured

as 4.320 Kg through Standard Electronic Weight Machine of

Tanish Jewellers of Nautanwa Market and purity of Gold has

also been recorded as 999.9 of Golden Bars by the Tanish

Jewellers. During investigation accused person identified

himself as Dipak Bajaj S/O Lt. Awat Ram Bajaj, Age- 43

Years, Address:- 6-Flaxley Road, Morden,SM46U, London

(UK). He revealed that on dated 25th February-2014, he

visited to the Showroom of "Bullion By post", Jewellery

Quarter Bullion Ltd., Floor-16, Centre City, 7 Hill Street,

Birmingham, B544A, London (UK), Tel. 01216348060, Fax-

8456436497, email. Sales @bullionbypost.co.uk, and

purchased 01 kg Gold Best Value Cast Bar 999.9 at the rate

of 26227 UK Ponds and paid online through his bank

account maintained at Barkley Bank London (UK) for the

purpose of his daughters marriage. On dated 31st March-

2014 he once again visited to the Showroom of Bullion By

Post and purchased 500 gram Gold Best Value Cast Bar

999.9 at the rate of 12724 Ponds. On the same day he

went to the Showroom or The Golden Purse, 39-

Northampton Street Hockley Birmingham, B186DU (United

Kingdom), Ph.+44(0)1212360072, +44(0)1212120184,

[email protected] and purchased the Golden


http://co.uk/

mailto:[email protected]

47 Coins and he got small Golden Balls (Grilled) in exchange of

his old Jewellery. On dated 01.04.2014 he arranged air

tickets and boarded the flight or Qatar Airways from Hithro

Airport London at about 1600 hrs and reached at Doha

Airport on dated 02.04.2014 at about 0300 hrs. On the

same day he boarded the flight of Qatar Airway from Doha

Airport and reached at Kathmandu (Nepal) on the same day

at about 1100 hrs. After reaching at Kathmandu he hired a

private taxi up to Belahiya and paid him Rs.4000 in Nepali

Currency and in the way he visited pashupati Nath Temple

Kathmandu and finally reached at Belahiya at about 2000

hrs. After Belaniya he crossed international border at

Sonauli, but has been detained by the personnel of SSB

during checking along with gold. He further told that he is

working as an interpreter for British Government since last

13 years at London to translate Indian languages and earn

weekly 250 Ponds. He is associated with CIU as an

interpreter (Central Interpreter Unit) located at Loner

House Main Road High Street Crandon London (UK). He is

running Om Fashion Jewellery Shop, deaWng in Importers

and Wholesalers of Jewellery, Purses, Bindis, Bangles,

Tattoos and Hair Accessories Iocated at 54-Park Royal

Business Centre, 9-17 Park Royal Road, Acton, NW107LQ


/ocated

48 London (UK), [email protected],

www.omfashionjewellery.com, ph.No.02036387593,

07912622943. After successful introduce of gold into India

he had planned to visit Jhaweri Bazaar, New Delhi adjacent

to Gurdawara for making Jewellery for his daughters

marriage and to devote some Jewellery to his goddess

(Kuldevi) Khoriya Devi. After completion of all requisite

formalities the accused persons along with Gold has been

handed over to the Land Custom Office Sonauli for further

course of action.

Handed over by Taken over By

Sd/- Sd/-

Date: 05.04.2014

//True Copy//



http://www.omfashionjewellery.com/

49 ANNEXURE-P5

Court No.-49

Case :- CRIMINAL MISC. BAIL APPLICATION No.-18322 of 2014

Application:- Deepak Bajaj

Opposite Party:- Union of India

Counsel for Applicant:- Ashutosh Tripathi,R R singh

Counsel for Opposite Party:- D.K.S. Raghuvanshi,A.G.A.

Hon’ble Pankaj Naqvi.J.

Supplementary affidavit filed today, is taken on record.

Heard Sri Ashutosh Tripathi, learned counsel for applicant Deepak

Bajaj, Shri B.K.S. Raghuvanshi, Advocate appearing on behalf of

Union of India (Customs), learned A.G.A. for the State and perused

the records.

It is submitted that applicant is innocent and has been falsely

implicated in this case by the customs officials due to the reason

that custom officials get reward in form of 20% value of goods

seized. It is further submitted that the applicant had bought the

gold in question in London, United Kingdom and was on way back

to Rajkot, Gujarat, where the marriage of his daughter was to take

place. It is further submitted that the maximum punishment

provided for the offence, allegedly committed by the applicant, is 7

years imprisonment and it is triable by the Magistrate. It is finally

contended that applicant does not have my previous criminal history

and is in jail since 3.4.2014.


50 Learned counsel appearing on behalf of Customs has opposed the

prayer for bail on the ground that applicant has been caught red-

handed with the gold amounting to Rs. One Crore & Nine lacs.

Having regard to the facts and circumstances of the case, and

without expressing any opinion on the merits of the case, I am of

the opinion that the applicant- Deepak Bajaj may be enlarged on

bail.

Let the applicant:- Deepak Bajaj involved in Case no.1 of 2014,

under Sections 104/135 Customs Act, P.S..Sima Sulk, Sonauli,

District Maharajganj be enlarged on bail on his furnishing a personal

bond and two heavy sureties each in the like amount to the

satisfaction of the court concerned subject to the following

conditions:-

(i) The applicant will not misuse the liberty of bail and will

not repeat any such offence in near future.

(ii) The applicant shall not directly or indirectly make any

inducement or threat to any witness.

(iii) The applicant will not tamper with the evidence.

(iv) The applicant shall remain present in the court during

trial and shall cooperate in trial on each date fixed.

Order Date:- 28.1.2015

Chandra

AUTHENDTICATED COPY

SECTION OFFICER COMPUTERISED COPYING SECTION

HIGH COURT ALLAHABAD

//True copy//


51 ANNEXURE-P6

02.03.2015

BRIEF FACTS OF THE CASE:-

On 03.04.2014 at about 15.10 hrs, the officials of SSB Sonauli vide

their recovery memo dated 03.04.2014 handed over one person

along with 4320 gram gold in the form of biscuits / coins / grilled

(granules), a British passport No. 511352051, Mobile handset

Blackberry FCC No. L6ARCN70UW with Battery and a Nepalese sim,

UK Pond 50x2=100, 20x18-360, 5x3=15, 10x6=60 Total 475 ponds

equivalent to Indian Rs.47951/-, Nepali Currency 100x3=300,

50x1=50, 10x6=60 Total 410 NC, equal into Indian Rs.256/- and

Indian Currency 500x10=5000, 100x6=600, 20x1=20, 10x8=80

Total Rs.5700

IC. As per SSB Memo, while conducting checking on 02.04.2014, the

SSB officials stopped a person coming from Nepal on foot. On

personal search of the person, namely, Shri Dipak Bajaj, one Gold

Bar [(PUREFINE 1KG 999.9 BIRMINGHAM (UK)] wrapped in a white

cloth hidden inside the pocket of his jacket/Coat, another Gold Bar

(UMICORE 999.9, 500gm. 18046) Kept hidden inside the back

pocket of his pant, gold granules (grilled) packed in transparent

polythene and kept in his vest(underwear) and 58 golden coins

(Krugerrand TYN GOUD 10z South Africa) Kept in his shoes and

right pocket of his pant were recovered. The recovered gold was got


52 weighed and tested by the SSB officials from a local goldsmith M/s

Tanish Jewellers, Nautanwa Market, Nautanwa and total wight of

the aforesaid recovered gold was found as 4320 gram on standard

Electronic Weighing Machine. The purity of the gold bars was found

at 999.9% whereas the purity of gold coins was ascertained at 70%

and that of gold granules (grilled) at 99.850% by the said jeweler. A

certificate was also given by the said jeweler to this effect. The

value of the aforesaid recovered gold was ascertained at

Rs.1,09,12,590/- @ Rs.29,500/- per 10 grams by the jewelers as

per prevailing rate.

2. The Customs officers of Land Customs Station, Sonauli called

upon two independent witnesses, to witness the proceedings. In

presence of the said witnesses, the officers of Land Customs

Station, Sonauli called a local goldsmith, Shri Vinod Kumar of M/s

Tanish Jewellers, Nautanwa Market, Nautanwa to confirm the

weight and purity of the recovered gold bullion/coin/grilled items as

mentioned in SSB’s recovery memo dated 03.04.2014. On

weighment, one gold bar was found 1000 gms. while another was

of 500gms. The weight at 58 gold coins was found to be of 1964

gms. and that of gold granules (grilled) to be 856 gms. The purity of

the gold bars was found at 999.9% while purity of gold coins and

small golden balls (grilled) at 70% and 99.850% respectively. The

value of the said recovered gold was estimated at Rs.1,09,12,590/-


53 by the said goldsmith at prevailing market price of gold

([email protected],500/-per 10 gms).

3. During interrogation, the accused confirmed his identify as Dipak

Bajaj, S/o Late Awat Ram Bajaj, Age 43 yrs. Address- 6 Flaxley

Road, Morden, SM46LJ, London (U.K.). During personal search of

Shri Dipak Bajaj by the afficials of L.C.S. Sonauli, three bills were

recovered from his possession relating to purchase of 500 grams

gold bar from M/s Bullion By Post vide bill order No. 0214312 dated

31.03.2014, 1kg gold bar form M/s Bullion By Post vide bill order no.

0208064 dated 25.02.2014 and 1kg Fine from M/s The Golden Purse

vide bill No.0010727 dated 31.03.2014.

4. Shri Dipak Bajaj in his statement recorded under section 107 of

the Customs Act, 1962 admitted that the aforesaid recovered gold

belonged to him which he had brought into India from UK via

Kathmandu (Nepal) to make jewellery for his family. He also

admitted that he had a bit knowledge that carrying foreign origin

gold from abroad into India via Nepal by a non resident India was

not allowed.

5. Therefore, on reasonable belief that the aforesaid recovered 4320

grams foreign origin gold (TCO) in the from UK via Nepal

contravening the provisions of the Notification No. 09/1996-Cus

dated 22.01.1996 issued under section 11 of the Customs Act, 1962

and thus liable to confiscation under Section 111 of the Customs


mailto:[email protected],500/-per

54 Act, 1962 was seized under Section 110 of the Act ibid under

panchnama dated 03.04.2014 drawn on the spot. Further, the

aforesaid recovered 10 Indian Currency notes in the denomination

of Rs.500/- (total Indian Rs.5000/-) were also seized under section

110 of the Customs Act, 1962 under the same panchnama as the

same was smuggled into India contravening the provisions of

Notification No.FEMA 6/ RB-2000 dated 3.5.2000 issued under

Foreign Exchange Management (Export and import of Currency)

Regulations, 2000 by the Reserve Bank of India and were liable to

confiscation under section 111 of the Act ibid. Also, the goods used

for concealing of the aforesaid seized foreign origin gold etc, i.e.,

old cloth, shoes and socks were also seized under Section 110 of

the Customs Act 1962 under the same panchnama as the same

were liable to confiscation under section 119 of the customs Act,

1962. All aforesaid seized goods were sealed by the officers of LCS

in three packets and the accused and the independent witnesses

put their signatures in taken of their satisfaction over the manner of

the seizure. The rest of the Nepalese, U.K. and Indian currency

were returned to Shri Dipak Bajaj being not relevant to case.

6. Shri Dipak Bajaj in his statement dated 04.04.2014 recorded

under section 108 of the Customs Act, 1962 confirmed his version

recorded in his statement dated 03.04.2014 before the Customs

officer and admitted that the aforesaid seized gold was recovered

from the pocket of his jeans, coat/Jacket and vest(underwear) and


55 that same of the said seized coins were kept in his shoes. He further

accepted that he had purchased the seized gold from UK and he

passessed the invoices for purchase of the same. He also informed

that he was a British national and was going to Gorakhpur via

Sonauli border to catch a train to New Delhi (India). He also

accepted that he had a bit knowledge that bringing gold from

abroad into India by a non resident is not allowed. On being asked

about the awareness of the land route from sonauli to Delhi, he

replied that a taxi driver guided him about the land route to New

Delhi. Shri Bajaj disclosed his educational qualification as “A Level”

in law equivalent to a law graduate in India and further stated that

he dealt in fashion jewelery, bindi, purse & tattoo in London with his

firm, M/s Fashion Jewellery, Shri Bajaj also stated that the aforesaid

seized foreign origin gold was recovered from his possession by the

SSB officers seized foreign origin gold was recovered from his also

stated that the aforesaid seized foreign origin gold was recovered

from his possession by the SSB officers of sonauli on 02.04.2014;

that he had not declared the aforesaid gold on his arrival at

Kathmandu Air Port; that he was going to Delhi with the aforesaid

seized foreign origin gold; that he had made payment for purchase

of the aforesaid foreign origin gold.

7. To verify the genuineness of the identify of Shri Bajaj, the

consulate office, British High Commission, New Delhi was requested

vide this office letter C. No.VIII(10)01/Seiz/SNL/2014-15/332 dated


56 06.04.2014 for verification of the genuineness of the passport No.

511352051 issued to Shri Dipak Bajaj by the British Embassy. The

Consulate Officer, British High Commission, vide his letter reference

No. REF/CON14- IND865853 dated 25.04.2014 informed that there

was a record of the passport issued matching the details.

8. As evident from above, Shri Dipak Bajaj was indulged in

smuggling of the aforesaid seized foreign origin gold. Since the

offence committed by him was punishable under Section 135 of the

Customs Act, 1962 after he was arrested on 04.04.2014 under

section 104 of the Customs Act, 1962 after due permission of the

Commissioner, Customs Act, 1962 after due permission of the

Commissioner Customs (Preventive) Commissionerate, Lucknow

vide Arrest Memo dated 04.04.2014. A prosecution case was also

launched against him before the Hon’ble Court of Chief Judicial

Magistrate (Economic Offences) at Varanasi.

9. In view of the facts and circumstances as narrated above and as

evident from the records, it appears that the accused, Shri Dipak

Bajaj was knowingly and actively involved in the act smuggling of

the aforesaid seized 4320 grams foreign origin gold in the form of

bars, coins & balls (grilled) valued at Rs.1,09,12,590/- contravening

the provisions of the Notification No.09/1996 – Cus dated

22.01.1996 issued under section 11 of the Customs Act, 1962

rendering the same liable to confiscation under section 123 of the


57 customs Act, 1962 and Shri Dipak Bajaj caught with the aforesaid

seized Foreign Origin Gold failed to prove the bonafide nature of the

goods and its legal import into India. In view of clear admission of

Shri Dipak Bajaj that he was actively involved in the act of

smuggling of gold in huge quantitiy, it appears, that the

commissions and omissions on the part of the said accused render

him liable for penal action section 112(i) of the Customs Act, 1962.

10. Accordingly, a notice to show cause was issued under

C.No.VIII(10)01-seiz/SNL/14-15 Dtd.27-08-2014 to Shri Dipak Bajaj

requiring therein to show cause to the Commissioner of Customs,

Customs (Preventive) Commissionerate, Lucknow, as to why:-

(i) The aforesaid 4320 grams seized foreign gold

biscuits/coins/grilled (granules) total valued at Rs.1,09,12,590/-

(Rupees One Crore, Nine lakhs, Twelve thousand, Five Hundred

Ninety only) Should not be confiscated under section 111(d) of the

Customs Act, 1962;

(ii) The aforesaid seized Indian currency of Rs.5000/- in the

denomination of Rs. 500/- each should not be confiscated under

sanction 11(d) of the Customs Act, 1962;

(iii) The aforesaid seized old white cloth, one pair of socks & shoes

valued at Nil Setting use in concealing the aforesaid seized gold


58 should not be confiscated under Section 119 of the customs Act,

1962 and;

(iv) A penalty should not be imposed upon Shri Dipak Bajaj under

Section 112 of he Customs Act, 1962.

11. Further, vide corrigendum dated 09.12.2014 issued under C. No.

C.No.VIII(10)01-Seiz/SNL/14-15/1212 Dtd. 09.12.14 show cause

notice was made answerable to the Additional Commissioner of

Customs, Customs (Preventive Commissionerate Lucknow.

DEFENCE REPLY:

12. Shri Avneesh Pratap Singh, Advocate vide letter dtd. 27.9.2014

submitted that he is appointed counsel by the notice to defend his

case and wishes to be heard. Superintendent LCS Sonauli vide letter

C. No. VIII(10)01-Seiz/SNL/14-15/1990 Dtd.30.09.2014 furnished

the acknowledgement dtd. 02.09.2014 of service of show cause

notice upon the notice through the jailor, Dist.Jail Varansi.

To ensure Natural Justice in the case dates for personal

hearing were fixed for 08.01.15, 15.01.15 and 22.01.2015 and

communicated to the notice through the Jailor, Distt. Jail Varansi

and his counsel hearing. Shri Avneesh Pratap Singh, but none

appeared on the dates fixed for personal hearing. Shri Avneesh

Pratap Singh, Advocate vide letter dated 22.01.15 on behalf of the

notice requested adjournment for one month. Accordingly, personal


59 hearing was fixed for 23.02.2015, but again neither notice nor the

counsel appeared to attend the personal hearing.

Shri Avneesh Pratap Sing, Advocate vide letter dated

22.02.2015, inter-alia submitted following reply to the show cause

notice-

i. That notice is British Citizen and owns Multiplex VISA. He

intended to visit India to get the jewelry prepared out of

some gold coins saved for his daughter’s marriage and gold

bought instantly. He visited Pashupati Nath Temple

Kathmandu and was arriving India by road but was

detained by the Border security officers before crossing the

border and implicated him in the case for getting

department reward.

ii. That he agrees to the facts regarding his address and the

bills for purchasing the gold are genuine.

iii. That he was not aware of the fact that bringing Gold from

Nepal into India is an offence and he was willing to pay the

duty leviable on the import of Gold.

iv. That he was not intended to smuggle the recovered Gold.

He nowhere mentioned that he wished to get profit by

selling the Gold.

v. That he used to travel India frequently and was never

indulged in the smuggling.


60 vi. That there was no cavity in his shoes and in the interest of

justice seized Gold may be released on Redemption Fine.

vii. That he has no criminal record either in India or in Britain.

viii. That he is lodged in jail for 9-10 months and because of

this his family is going through financial hardship.

ix. Finally, it is prayed that he was not intended to smuggle

the gold. He wishes to compound the offences and will

soon file an application to this effect before the competent

authority. He is willing to pay Redemption fine, the show

cause notice may be withdrawn and the gold may be

released.

DISCUSSION AND FINDINGS:

13. I have carefully gone through the show cause notice, its relied

upon documents and other material facts available on record.

Following issues arise for decision by me:-

(i) Whether aforesaid 4320 grams seized foreign gold

biscuits/coins/grilled (granules) total valued at Rs.1,09,12,590/- is

liable to confiscation under section 111(d) of the Customs Act,

1962;

(ii) Whether aforesaid seized Indian currency of Rs.5000/- in the

denomination of Rs.500/- each is liable to confiscation under

sanction 111(d) of the Customs Act, 1962;


61 (iii) Whether, aforesaid, seized old white cloth, one pair of socks &

shoes valued at Nil being used to conceal the aforesaid seized goods

is liable to confiscation under section 119 of the customs Act, 1962

and;

(iv) Whether penalty should be imposed upon Shri Dipak Bajaj

under Section 112 of the Customs Act, 1962.

14. Now, I proceed wise as under-

14.1 Confiscation of 4320 grams seized foreign gold

biscuits/coins/grilled (granules) total valued at Rs.1,09,12,590/-

From perusal of records I observe that while conducting checking on

02.04.2014, the SSB Officials stopped Shri Dipak Bajaj coming from

Nepal on foot and recovered one Gold Bar [(PUREFINE 1KG 999.9

BIRMINGHAM UK)] wrapped in a white cloth hidden inside the

pocket of his jacket/coat, another Gold Bar (UMICORE 999.9, 500

gm. 18046) Kept hidden inside the back pocket of his pant, gold

granules (grilled) packed in transparent polythene and kept in his

vest(underwear) and 58 golden coins (Krugerrand FYN GOUD 10z

South Africa) Kept in his shoes and right pocket of his pant. Shri

Dipak Bajaj in his statement dated 04.04.2014 recorded under

Section 108 of the Customs Act, 1962 admitted that the aforesaid

seized gold was recovered from the pocket of his jeans, jacket/coat

and vest (underwear) and that some of the said seized coins were


62 kept in his shoes. He further accepted that he had purchased the

seized gold from UK and he possessed the invoices for purchase of

the same. Shri Bajaj disclosed his educational qualification as “A

Level” in law equivalent to a law graduate in India. He also accepted

that he had a bit knowledge that bringing gold from abroad into

India by a non resident is not allowed. Here, I would like to place

reliance on the judgment of Hon’ble supreme court pronounced in

the case of Commissioner of Central Excise Madras Vs. Systems and

components (P) Ltd. reported in 2004 (165)ELT 136 {SC}, wherein

it was held that ‘What is admitted need not to be proved.’

Since the notice has admitted that he was aware that import of gold

from Nepal into India by a non-resident is prohibited thus it

emerges that he was willingly attempting to import the gold

contrary to the provisions of the Customs Act, 1962. Ratio of above

judgment is squarely applicable in the instant case. His intention to

smuggle the gold is also corroborated from the fact that he had not

declared the aforesaid gold on his arrival at Kathmandu Air Port.

Further, recovery of Gold in the form of Coin/bar/granules

concealed in his shoes, Trousers, Jacket/Coat, vest(underwear)

itself indicates his lone intention to smuggle the Gold.

I further observe that the notice in his written defense has

submitted that he was willing to declare the gold but he was

detained by the officers of Border security before crossing the


63 border and for sake of departmental reward he was falsely

implicated in the case. I however, find no gravity in this argument

as no such incident was reported by him in his statement recorded

under 107 and 108 of the customs, Act, 1962. Apart from it, I

observe that he never narrated this version earlier, either before the

departmental officers or at the time of investigation of the case,

thus I find it baseless and an afterthought.

I also find that Seciton 2(33) of the Customs Act, 1962 defines

prohibited goods’. It reads as follows:

“(33)” prohibited goods means any goods the import or export of

which is subject to any prohibition under this Act or any other law

for the time being in force but does not include any such goods in

respect of which the conditions subject to which the goods are

permitted to be imported or exported have been complied with”

Further Section 11 of the Customs, Act, 1962 empowers the Central

Government to prohibit either absolutely or subject to such

conditions to be fulfilled before or after clearance the import or

export of the goods of any specified direction by issuing a

notification in this behalf. The effect of interpretation of the words

“prohibited goods” was considered by the Hon’ble Apex Court in the

matter of OM Prakash Bhatia Vs. Commissioner of Customs

[2003(155)E.L.T 423] and the court held as follows:


64 “10. From the aforesaid definition, it can be stated that (a) if there

is any prohibition of import or export of goods under the Act or any

other law for the time being in force, it would be considered to be

prohibited goods; and (b) this would not include any such goods in

respect of which the conditions, subject to which the goods are

imported or exported have been complied with. This would mean

that if the conditions prescribed for import or export of goods are

not complied with, it would be considered to be prohibited goods.

This would also be clear from section 11 which empowers the

Central Government to prohibit either absolutely or ‘subject’ to such

conditions to be fulfilled before or after clearance, as may be

specified in the notification, the import or export of the goods of any

specified description. The notification can be issued for the purposes

specified in sub-section [2] Hence, prohibition of importation or

exportation could be subject to certain prescribed conditions to be

fulfilled before or after clearance of goods. If clear by this court in

Sheikh Mohd. Omer Vs. CC (AIR 1971 SC 293] wherein it was

contended that the expression ‘prohibition’ used in section 111(d)

must be considered as a total prohibition and that the expression

does not bring within its fold the restrictions imposed by clause (3)

of the import Control Order, 1955. The court negatived the said

contention and held thus:-

“….What clause (d) of section 111 days is that any goods which are

imported or attempted to be imported contrary to Any prohibition


65 imposed by any law for the time being in force in this country is

liable to be confiscated. “Any prohibition” referred to in that section

applies to every type of “prohibition”. That prohibition may be

complete or partial: Any restriction on import or export is to an

extent a prohibition. The expression “any prohibition” In section

111(d) of the Customs Act, 1962 includes restrictions. Merely

because section 3 of the Imports and Export (control) Act, 1947

uses three different expressions “prohibiting”, “restricting” or

“otherwise controlling”, we cannot cut down the amplitude of the

word “any prohibition” in section 111(d) of the Act. “Any

prohibition” means every prohibition. In other words all types of

prohibitions. Restriction is one type of probation”

On applying aforesaid judgment to the aforesaid notification

No.9/96-Customs dated 22.01.1996 import of TCO gold from Nepal

to India is prohibited and in view of meaning of the word

“prohibition” as construed / laid down by the Hon’ble Apex court in

the case cited supra, I hold that the seized gold is prohibited goods

and thus liable for confiscation under section 111(d) of the customs

Act, 1962.

As regards submission of the counsel for notice to release the seized

gold on deposit of redemption fine, I find that commissioner of

customs (AIR) Chennai-l has (through Civil Miscellaneous Appeal


66 filed before Hon’ble court of Judicature at Madras) raised following

question of law:

“Whether in the facts and circumstance of the case, the Tribunal

was right in remanding the matter with a direction to the

commissioner to invoke the power under section 125 of the

Customs Act for redemption of the goods on payment of fine”

The Hon’ble Court vide its order dated 27.04.2009 [2009(247) E.L.T

21] held that goods were prohibited as the assessee did not belong

to category of persons who could bring gold at concessional rate of

duty and such goods had been imported in violation of import

(Control)order, 1955 read with section 3(i) of import and Export

Control Act, 1947. Therefore, Commissioner’s order or absolute

confiscation of goods was correct.

Hon’ble Supreme Court dismissing the petition filed by samynathan

Murugesan against aforesaid order, passed following order

[2010(254) E.L.T. A15]:

“Applying the ratio of judgment in the case of Om Prakash Bhatia V.

CC, Delhi reported in 2003 (155)E.L.T 423 (S.C), to the facts of the

case, we find that, in present case, the assessee i.e. the notices did

not fulfill the basic eligbility criteria, which makes the imported item

a prohibited goods; hence, we see no reason to interfere with

impugned order.”


67 Aforesaid judgment are squarely applicable in the instant case as

Noticee has violated the provisions of Notification No.9/96-Customs

dated 22.01.1996 and gold was secreted by him in the form of

Bar/Coin/Gold grilled granules, thus, seized 4320 grams foreign

origin Gold totally valued at Rs.1,09,12,590/- is liable for absolute

confiscation.

14.2 Confiscation of Indian currency of Rs.5000/- in the

denomination of Rs.500/- I observed that sub section (ii) of Section

8 of the Notification No.FEMA 6/ RB- 2000 dated 03.05.2000 issued

under Foreign Exchange Management (Export and Import of

Currency) Regulations, 2000 imposes prohibition on export and

import to or from Nepal and Bhutan of Indian Currency into India

other than notes of denominations of above Rs.100/- In the instant

case, Indian currency amounting to Rs.5,000/- in the denomination

of Rs.500/- were imported by the notice from Nepal into India in

violation of the aforesaid Notification, I, therefore, hold the same

liable for confiscation.

14.3 Confiscation of old white cloth, one pair of socks & shoes

valued at Nil used in concealing the recovered Foreign Origin Gold-

I observe that as per Section 119 of the Customs Act, 1962- “ Any

goods used for concealing smuggled goods shall also be liable to

confiscation. In present case Foreign Origin Gold was concealed by

the notice in white cloth, one pair of Socks & Shoes valued at Nil


68 used in concealing the recovered Foreign Origin Gold are liable to

confiscation under section 119 of the Customs Act, 1962.

14.4 Penalty upon Shri Dipak Bajaj under section 112 of the

Customs Act, 1962- His acts of Commission and omission have

already been discussed in para 14.1 above. His deliberate

indulgence in the smuggling of huge quantity of foreign origin gold

from Nepal into India to the tune of 4320 grams in the form of

Bar/Coin/Grilled Granules, totally valued at Rs.1,09,12,590/- is well

established. I am, therefore, inclined to impose penalty upon the

notice under section 112 of the customs Act, 1962.

15. Accordingly, I pass following order-

ORDER

i. I order for absolute confiscation of the 4320 grams foreign

origin Gold valued at Rs.1,09,12,590/- (Rupees One Crore

nine lakhs twelve thousand five hundred and ninety only)

under Section 111 (d) of the customs Act, 1962.

ii. I order for absolute confiscation of 10 Currency notes in the

denomination of Rs.500/- with face value of Rs.5000/-

under section 111 (d) of the Customs Act, 1962.

iii. I order for absolute confiscation of old white cloth, one pair

socks & shoes valued at Nil used for conceding the said

gold, under section 119 of the Customs Act, 1962.


69 iv. I impose a penalty of Rs.25,00,000/- (Rupees Twenty Five

Lakhs only) upon Shri Dipak Bajaj Section 112 of the

Customs Act, 1962.

(K.P.SING)

ADDITIONAL COMMISSIONER

CUSTOMS LUCKNOW

To,

(1) Mr.Dipak Bajaj S/o Late Awat Ram Bajaj,

H.No.12, 6-Flaxley Road, Morden, SM46LJ, London (U.K)

(2) Guard File.

C. No. VIII(10)68-Adj/ADC/NTW/2014 Dated:

02.03.2015

Copy forwarded for information and necessary action to:-

1. The commissioner, Customs (P), Lucknow along with copy of

show cause Notice.

2. The Deputy Commissioner Customs (P) Division Nautanwa

3. The Superintendent (TRC) Customs (P) Commissionerate,

Lucknow.

4. Shri Avaneesh Pratab Singh, Advocate 94 Vindhyavansini

Colony Ardali Bazar, Varanasi

SUPERINTENDENT (ADJ.) CUSTOMS (P.) HDQRS,

LUCKNOW

//True Copy//


70 ANNEXURE-P7

Before the Hon’ble Court of Special Chief Judicial Magistrate,

Varanasi

Union of India Vs. Deepak Bajaj etc.

U/s : 135, Customs Act.

Police Station -Customs Sonauli,

Mahrajganj

Application on behalf of Deepak Bajaj son of late Avatram

Bajaj, resident of House No. 12, 6, Flaxy Road, Modern S.M. 4, L.R.

London (U.K.) is submitted as under:-

1. That the applicant is on bail in the above-said case and

comply with the orders of the Hon’ble local court

scrupulously.

2. That Four Kg 300gms gold was seized from applicant in the

above-said case, which he had purchased through his Bank

and the said gold was his personal property, applicant is

initiating appropriate proceedings before the competent

officer for release of the same.

3. That after investigation in the above-said case, complaint has

been filed against applicant.

4. That after arrest, few personal articles were recovered from

the possession of applicant which have not been seized.

(a) Passport No. 511352051


71 (b) Handset Blackberry Fcc No.L6ARCN70UW with

battery & SIM.

© Indian Currency 500x 10, 100x6, 20x1, 10x8

personal articles.

5. That above-said articles are personal belongings of applicant

and Department has nothing to do with the above-said

articles & goods and nor the same have any concern with the

above-said case.

6. That in such situation, releasing the above-said articles of

applicant is necessary & justifiable.

7. That as & when court would call for the above-said articles,

applicant would produce in court.

8. That applicant is ready to file indemnity bond for superdgi of

the above-said articles.

9. That in such situation, releasing the said articles in favour of


Prayer

Therefore, it is humbly prayed before the Hon’ble Court hat

keeping in view the above-stated facts, the above-said articles may

kindly be released in favour of applicant, in the interest of justice.

Dated: 13.03.15 Sd/-

Applicant


72 Before the Hon’ble Court of Special Chief Judicial Magistrate,

Varanasi

Case No. Of

Union of India Vs. Deepak Bajaj etc.

U/s : 135, Customs Act.

Police Station -Customs Sonauli,

Mahrajganj

Affidavit

I, Deepak Bajaj son of late Avatram Bajaj, resident of House

No. 12, 6, Flaxy Road, Modern S.M. 4, L.R. London (U.K.) do hereby

solemnly affirm & state as under:-

1. That deponent is resident of above-stated address and is well

conversant with all the facts mentioned in the affidavit.

2. That the applicant is on bail in the above-said case and

comply with the orders of the Hon’ble local court scrupulously.

3. That Four Kg 300gms gold was seized from applicant in the

above-said case, which he had purchased through his Bank

and the said gold was his personal property, applicant is

initiating appropriate proceedings before the competent

officer for release of the same.

4. That after investigation in the above-said case, complaint has

been filed against applicant.

5. That after arrest, few personal articles were recovered from

the possession of applicant which have not been seized.

(a) Passport No. 511352051


73 (b) Handset Blackberry Fcc No.L6ARCN70UW with

battery & SIM.

(c) Indian Currency 500x 10, 100x6, 20x1, 10x8 personal

articles.

6. That above-said articles are personal belongings of applicant

and Department has nothing to do with the above-said articles

& goods and nor the same have any concern with the above-

said case.

7. That in such situation, releasing the above-said articles of


8. That as & when court would call for the above-said articles,

applicant would produce in court.

9. That applicant is ready to file indemnity bond for superdgi of

the above-said articles.

10. That in such situation, releasing the said articles in favour of


Sd/-

Deponent

Verification

I, the deponent, do hereby verify that all the contents of paras

No.1 to10 of the above-affidavit are true & correct to my personal

knowledge. Neither any false fact has been stated nor any fact has

been concealed therein. Verified in the Civil court Complex,

Varanasi.

Dated: 13.03.15 Sd/-

Deponent

//True Translated//


74 ANNEXURE-P8

Court of Special Chief Judicial Magistrate, Varanasi

Case No. 765/14

Union of India Vs. Deepak Bajaj

Section 135, Customs Act

Police Station Sonauli

Copy of order dated 05.05.2015

Dated: 05.05.2015

File put up. Appeared learned counsels for both parties.

Heard learned counsels for both parties on the applicator moved

by accused/applicant.

On behalf of applicant/accused Deepak Bajaj application duly

supported with affidavit has been moved to the effect that Four

Kilogram Three Hundred Twenty gram gold seized from him is his

personal gold which he had purchased. He has been initiating

proceedings before he competent officer about release of the same.

After consideration, complaint has been filed against him. after

arrest, few personal articles were recovered from the possession of

applicant which have not been seized viz. 1. Passport No.

511352051; 2. Handset Blackberry Fcc No.L6ARCN70UW with

battery & SIM. 3. Indian Currency 500x 10, 100x6, 20x1, 10x8

personal articles. The above-said articles are personal belongings of

applicant and Department has nothing to do with the above-said


75 articles & goods and nor the same have any concern with the

above-said case. Prayed for release of all the above-said articles in

his favour.

Heard & perused file. Applicant/accused Deepak Bajaj is on

bail in the present case. File is pending trial and statement of

witnesses is being recorded. 4 Kg 320 gms gold is stated to have

been recovered from the possession of acad. Subsequently,

passport, mobile handset with SIM & battery and Indian currency

has also been recovered from applicant/accused. Learned counsel

appeared on behalf of prosecution has contended that accused has

been released on bail. If passport is given to him then there are

very rare probability that he would comeback in India. Accused is a

foreign citizen. In such situation, once he goes out of India, his

appearance could not be possible and trial of court would affect

adversely. In the objection, no any objection has been stated

about releasing mobile handset with SIM & battery to applicant.

With regard to remaining case articles, it is stated that application

has been filed before the competent authority for release.

As applicant/accused is a foreign citizen. In case passport is

provided to him, there is absolute probability of fleeing away out of

the country due to which ensuring his appearance in the case

would not be possible. No any objection has been raised about

releasing remaining articles viz. Mobile handset with SIM & battery.


76 Therefore, releasing mobile handset with SIM & battery would be

justifiable. Application is disposed of accordingly.

Order

While allowing application dtd 13.03.15 filed by

applicant/accused Deepak Bajaj partly it is disposed of in the form

that Mobile handset Blackberry Fcc No. L6ARCN70UW with battery

& SIM be released in his favour on filing a surety in the sum of

Rs. 15,000/- and P.B. in the likewise amount and Undertaking to the

effect that on calling for mobile by court he would produce before

the court. Application about remaining case articled is rejected.

Application stands disposed of accordingly file be put up on

08.06.2015 for evidence.

Sd/-

(Mahender Srivastava)

Special Chief Judicial Magistrate Varanasi.



77 ANNEXURE-P9

Before the Hon’ble Court of District & Sessions Judge, Varanasi

Crl. Revision No. 213 of 2015

Deepak Bajaj son of late Avatram Bajaj, resident of House No. 12, 6, Flaxy Road, Modern S.M. 4, L.R. London (U.K.).

… Revisionist

Versus

1. Union of India

2. Shri Brijender Chaudhary, Assistant Commissioner, Customs

Duty, Nautanwa, Mahrajganj.

… Respondents

Revision against the order dated 15.05.2015 passed by Shri

Mahender Srivastava, Special Chief Judicial Magistrate, Varanasi in

Case No. 765/2014 Union of India versus Deepak Bajaj, under

section 135, Customs Act vide which having allowed application

partly, application for passport was rejected.

--------------------

Grounds of Revision

1. That order dated 15.05.2015 (05.05.15) passed by the court

below is contrary to the facts, evidence and bail orders, which

is liable to be set-aside.

2. That according to prosecution case, in brief, on 03.04.2014

officers of Customs Department called Panch and told that

officers of the Border Security Force handed over them

foreign gold biscuits, coins and small granuals, Indian and

foreign currency and one person vide their Memo dated


78 03.04.2014. thereafter, officers inquired name address of the

person handed over, who revealed his name as Deepak Bajaj.

Three bills relating to purchase of gold were recovered from

the possession of Deepak Bajaj. On inquiring by officers,

Deepak revealed that he happens to be a British citizen, he

has been running business in U.K. and name of his firm is Om

Fashion Jewelry. He had brought having purchased the gold

recovered from him from London, thereafter, officers of the

Customs Department, Sanauli took him under arrest under

Section 104, Customs Act on the basis of this reasonable

belief that gold handed over is foreign gold and Jeans, Coat &

Waist and few coins hidden in shoes were recovered from the

possession of Deepak Bajaj.

3. That the fact is that revisionist happens to be a British citizen

and applicant has got Multiplex Visa. Revisionist was coming

in India with coins gathered earlier for marriage of his

daughter and few coins purchased recently through bank for

getting manufactured ornaments because marriage of

daughter of revisionist had scheduled to have been

solemnized and he visited Mandir of Pashupati Nath in

Kathmandu for Darshan for this auspicious work and he

offered two small coins in Pashupati Nath Mandir in

Kanthmandu and he was coming from Kathmandu by taxi to

see the hilly beauty that before entering in the limits of


79 India, he was taken under arrest by the Border Security

Force. He kept on saying that he is to go to Immigration

Office and has to deposit his goods and to satiate requisite

custom duty, but applicant was not allowed to go back by not

believing on the averments of applicant. Border Security

Force handed over applicant/revisionist to Custom Officers

and revisionist revealed all the true facts before officers which

have been mentioned in Panchnama, but officers made him

accused with the intentions that they would get departmental

incentive & prize.

4. That applicant/revisionist has been enlarged bail and

revisionist has been complying with all the conditions of bail

and the very purpose behind bail is that applicant would not

terrorize witnesses in any manner and would not tamper

with evidence and would keep on representing his case.

Revisionist kept on complying with all the orders scrupulously.

5. That there is one more purpose behind enlarging bail that

revisionist/applicant may go to his family and because he

happens to be the head of the family and all the financial

sources depend on him only and business of applicant is

suffering loss and family is suffering huge loss on account of

not getting money family and applicant/ revisionist is under

mental depression due to not meeting with family for the last

about 14-15 months.


80 6. That court below had restrained him from going to England

by making observations that he is foreigner and his return is

not certain, while he has got business and his family, he has

been deprived of meeting is family for the last about 15

months, while has not got any place to stay in India, he is

becoming more & more indebted day by day8. Neither has got

any work and he was deprived of meeting is family members

which is violation of bail orders.

7. That revisionist was coming India legally and he was coming

by road and not through any passage hiding himself, he

wanted to pay custom duty and formalities, but before

reaching in the Immigration Officer, Border Security Force

took him under arrest.

8. That revisionist/applicant kept on appearing in court and

complying with orders of the Hon’ble Court scrupulously.

9. That revisionist is a foreigner and his business is established

abroad, is business is ruining and his family is starving and he

could not meet with his children for about 14 months.

10. That revisionists is foreigner and appeal about release of

above-said gold is pending before the Commissioner and any

person who was coming India in legal manner, purchased gold

legally then why would he leave his gold.

11. That above-said gold belongs to revisionist which has been

purchased by him leally.


81 12. That Hon’ble court below did not release passport of

revisionist because his appearance in court is not possible

which is contrary to rules because if applicant/revisionist is

foreigner, then naturally, he would go to his home and court

has released on bail for it and revisionist has been complying

and in future also, he would comply with conditions

stipulated by the Hon’ble High Court scrupulously.

13. That in such situation setting-aside order passed by the

Hon’ble court below is necessary & justifiable and order of the

court below is contrary to the principle of natural justice,

which is unconstitutional.

14. That in the interest of justice, having called for file of the

court below, peruse the same and while setting-aside the

judgment of the court below, allowing revision of revisionist is

necessary & justifiable.

PRAYER

Therefore, it is prayed before the Hon’ble Court that in the

interest of justice, having called for file of the court below, peruse

the same and while setting-aside the judgment of the court below,

revision of revisionist may kindly be allowed, in the interest of

justice.

Dated: 04.06.2015 Sd/- Revisionist

Through : Sd/-

Counsel

///True Translated Copy//


82 ANNEXURE-P10

Court of Additional Session Judge, Court No.9, Varanasi

Presiding Office –Shri Vikas Saxena, H.J.S

Criminal Revision No. 213 of 2015

Deepak Bajaj son of late Avatram Bajaj, resident of House No. 12,

6, Flaxy Road, Modern S.M. 4, L.R. London (U.K.).

… Revisionist

Versus

1. Union of India

2. Shri Brijender Chaudhary, Assistant Commissioner, Customs

Duty, Nautanwa, Mahrajganj.

… Respondents

Judgment

This Criminal Revision has been made on behalf of revisionist

Deepak Bajaj against the order dated 15.05.2015 passed by Shri

Mahender Srivastava, Special Chief Judicial Magistrate, Varanasi in

Case No. 765/2014 Union of India versus Deepak Bajaj, under

section 135, Customs Act vide which having allowed application

partly, application for passport was rejected.

The submissions of the revisionist, in brief, are that the order

dated 15.05.2015 (05.05.15) passed by the court below is contrary

to the facts, evidence and bail orders. The prosecution case, in

brief, is that on 03.04.2014 officers of Customs Department called

Panch and told that officers of the Border Security Force handed


83 over them foreign gold biscuits, coins and small granuals, Indian

and foreign currency and one person vide their Memo dated

03.04.2014. thereafter, officers inquired name address of the

person handed over, who revealed his name as Deepak Bajaj.

Three bills relating to purchase of gold were recovered from the

possession of Deepak Bajaj. On inquiring by officers, Deepak

revealed that he happens to be a British citizen, he has been

running business in U.K. and name of his firm is Om Fashion

Jewelry. He further revealed that he has brought gold having

purchased from him from London, thereafter, officers of the

Customs Department, Sanauli took him under arrest under Section

104, Customs Act and during is Jamatalashi, coins were recovered

hidden in Jeans, Coat & shoes.

Learned counsel for revisionist has submitted that he

happens to be a British citizen and he has got Multiplex Visa.

Revisionist was coming in India with coins gathered earlier for

marriage of his daughter and few coins purchased recently

through bank for getting manufactured ornaments because

marriage of daughter of revisionist had scheduled to have been

solemnized and he visited Mandir of Pashupati Nath in Kathmandu

for Darshan for this auspicious work and he offered two small

coins in Pashupati Nath Mandir in Kanthmandu and he was coming

from Kathmandu by taxi to see the hilly beauty that before entering


84 in the limits of India, he was taken under arrest by the Border

Security Force. He kept on saying that he is to go to Immigration

Office and has to deposit his goods and to satiate requisite custom

duty, but instead of believing on the averments of revisionist he

was handed over to Custom Officers and was made accused.

Revisionist has further submitted that he is on sanctioned bail

and he has been complying with all the conditions of bail and he

has become victim of depression due staying away from his family

for the last about 14-15 months & business of revisionist has also

been incurring losses. Court below has restrained him from going

to England by making observations that he is foreigner and his

return is not certain, while he has got business and his family, he

has been deprived of meeting his family for the last about 15

months. Revisionist has further submitted that he was coming

India legally and he was coming by road and not through any

hidden passage. He would keep on appearing on the orders of the

court and would abide by orders. It has also been submitted that

is business sis establish abroad, on account of this reason, his whole

business is going to ruin and is family is starving. Revisionist was

coming India in lawful manner and he had purchased gold in legal

manner. On the above-stated ground, prayed for allowing revision

and to set-aside the order of the court below.

Heard learned counsel for revisionist and perused the file of

court below.


85 Learned counsel for revisionist contended that incident

occurred on 03.04.2014 and despite allowing bail to revisionist, he is

unable to go to England to meet his family in the absence of

passport, resultantly he has become victim of depression and his

business etc. is also suffering heavily.

Learned counsel for respondent contended that file is

pending before court below in evidence that if revisionist renders

cooperation having appeared before the court below himself, then

case may be disposed of quickly. Learned counsel for respondent

has further contended that in case accused goes to his home in

England, he would not return and disposal of the case would get

delayed unnecessarily.

Learned counsel for revisionist contended that more than 4

Kg gold is seized by respondents from the possession of revisionist,

the value of which is more than One Crore. The said gold

exclusively belong to revisionist, how can he flee away leaving the

said gold.

Perused the file of the court below.

On perusal of file of court below it is evident that 4320 gms

pure gold has been recovered from the possession of

revisionist/accused, market price of which is stated Rs. One Crore

Nine Lakh Twelve thousand Five Hundred Ninety. Recovery of gold


86 in such huge quantity from the possession of revisionist shows that

he has been engaged in business of gold. Learned Magistrate did

not release passport of revisionist taking this ground in impugned

order that revisionist a foreign citizen and there is absolute

probability of fleeing away abroad and after leaving, ensuring his

appearance would not be possible. I do fully coincide with said

order of the learned Magistrate that court below has passed

justifiable order keeping in view the facts & circumstances of the

case, which does not require any kind of interference.

Order

Criminal Revision is dismissed. Order dated 05.05.2015 passed

by the learned Magistrate is confirmed.

File be returned to learned court below without delay where

revisionist is to appear on 26.08.2015.

Dated: 22.08.2015 Sd/-

(Vikas Saxena) Additional Session Judge

Court No. 9, Varanasi

Judgment has been pronounced today in open court duly

signed & dated.

Dated: 22.08.2015 Sd/- (Vikas Saxena)

Additional Session Judge Court No. 9, Varanasi



87 ANNEXURE-P11

6/TR6 (037) No. 2

[Treasury Rule 92] Challan No. 40166946

Accounting Commissionerate/Office

STATE BANK OF INDIA SONAULI BRANCH

Challan of Account Paid into the A/c. No. 11103238391 PAO Customs & Central Excise

Commissionerate State Bank of India at Sonauli Branch (6364)

Lucknow

Focal Point Bank-SBI M.G. Narg 24 Halwasia Count [LC 05]

Hazratganj: Lucknow BSR Coad No. 00649 Division-Nautanwa

Name and address of the Assessee/Remitter:

Shri Dipak Bajaj S/o. Late Awat Ram Bajaj

R/o. H.No. 12, 6-Flaxley Road, Morden, SM46LJ, London U.K.

Code No. LC - 0605

By/Whom tendred: Inspector, Customs (Preventive) Div. Nautanwa

Full particulars of the

remittance and authority

if any

HEAD OF ACCOUNT/ Major

Head 037-CUSTOMS

(indicate below

the appropriate Head from the

list on the reverse

Amount tendered Counter Signature

of the Depart-mental

Officer (where

required)

By cassh By

Cheque/ Draft

Pay order etc

Rs. Ps Rs. Ps

Personal Penalty

imposed vide O.I.O. No.

23/2015 dated

02.03.2015 passed by

Shir.K.P.Singh,

1.Redemption Fine (iv)

2500000 Seal Sd/-

5.11.15 2.Personal Penalty (iv)

0

3. Cash Security

(iv)

0

4. Sale proceed

(ii)

0


88 ADC Customs

(P)

Commissioner Luncknow

0

0

0

0

Total 2500000

Date: 05.11.2015 (Rupees Twenty five lakh Only) Signature of the

Sd/-

Signature of the authorized Officer of the Bank Name of the Branch

//True Copy//


89 ANNEXURE-P12

Court No.-53

Case:-APPLICATION U/S 482 No.-35769 of 2015

Applicant :- Deepak Bajaj

Opposite Party :- Union of India Thuru Asstt.Commissioner of

Customs Mahrajganj

Counsel for Applicant:- Rajiv Ratn Singh

Counsel for Opposite Party:- Bijendra Kumar Singh

Hon’ble Ramesh Sinha.J.

Supplementary affidavit has been filed by learned counsel for the

applicant and compliance affidavit has been filed by opposite party

which are taken on record.

Heard Sri. R.R.Singh, learned counsel for the applicant, Sri Sanjay

Kumar Singh, learned counsel for Union of India and Sri.R.K.Maurya,

learned A.G.A. for the state.

This application under Section 482 Cr.P.C. has been filed for

quashing the order dated 5.5.2015 passed by Special C.J.M.,

Varanasi in Case No.765 of 2014 and order dated 22.8.2015 passed

by Special Session Judge, Varanasi in Criminal Revision No.213 of

2015.


90 Learned counsel for the applicant submits that the applicant is

citizen of England and he had come to India to attend the marriage

of his relative but he was falsely implicated under the Customs Act.

Learned counsel for the applicant also undertakes to cooperate with

the trial. He further submitted that the applicant may allow to go

abroad and his Passport may be handed over to him.

Learned counsel for Union of India pointed out that discharge

application has been filed by the applicant which is pending and the

applicant is taking adjournment continuously. He submitted that if

the applicant is allow to go abroad then the trial would be delayed

and hampered.

Considering the facts of the case, without expressing any opinion on

the merits of the applicant’s case, this application U/s 482 Cr.P.C. is

finally disposed of with a direction to the court below to decide Case

No.1 of 2014, under section 104/135 Customs Act, P.S. Sima Sulk

Sonauli, District Maharajganj in accordance with law without

granting unnecessary adjournments to either of the parties as

expeditiously as possible preferably within a period of six months

from the date of production of certified copy of this order, if there is

no legal impediment.

Order Dated: 22.12.2015

Manoj

//True Copy//


91 ANNEXURE-P13

25.01.16

To,

The Chief Commissioner of Customs

Patna Zone Central Revenue Building B.C. Patel Path ,

Patna – 800001

Respect Sir,

Subject :- Submission of application of compounding of offence by

Dipak Bajaj R/o H.No. 12, 6-Flaxley Road, Modern,

SM46U, London (U.K.) under Customs (Compounding of

Offences) Rules 2005.

Respectfully, the applicant begs to enclose herewith application for

compounding of offence along with brief facts of the case and

relevant documents.

2. He also begs to submit that the application for compounding of

offence is submitted in view of the prosecution launched against the

applicant by the Commissioner Customs (Prev.) Lucknow before the

Court of Hon'ble Chief Judicial Magistrate (Economic Offences) at

Varanasi for possession/recovery of 4320 grams of gold of foreign

origin brought to India from U.K. via Nepal.

3. The recovered and seized gold weighing 4320 grams has been

confiscated by the Additional Commissioner Customs Lucknow and

penalty of Rs. 25,00,000/- imposed upon the applicant under Order


92 No. 23/2015 dated 02.03.2015, has been deposited} by the

applicant.

4. The applicant is presently on bail granted by the Hon'ble High

Court Allahabad on 29.01.2015.

5 The applicant is a British National having passport no. 511352051

and is engaged in the business of imitation jewelry having a shop

viz Om Fashion Jewelry, Park Royal Business Cenire, Action,

London, U.K. which is now closed after the arrest of the applicant

on 04.04.2014 and the applicant is incurring a lot of liabilities on the

inventory of the goods stored in his shop.

6. Wife of the applicant is a British National and is under going

through acute mental depression since the arrest of the applicant

and his 3 children- daughter aged 23 years, two sons aged 14 &

18 years are also under acute mental trauma and the whole family

is in financial mess and almost on the verge of starvation.

7. The applicant has managed to deposit penalty by borrowing

money from his friends and relatives and has thus incurred a huge

liability upon in.

It is, therefore, humbly requested that the application of the

applicant for compounding of offence may kindly be sympathetically

considered on humanitarian grounds so that he can go back to his


93 country to save his family from being ruined on account of

miserable financial condition.

Thanking you,

Yours sincerely,

(Dipak Bajaj)

S/o Late Awat Ram Bajaj

H.No. 12, 6-Flaxley Road, Modern

SM46U, London (U.K.)

End.:

Application for compounding of offence in duplicate

along with enclosures.

//True copy//


94 ANNEXURE-P14

GOVERNMENT OF INDIA

OFFICE OF THE CHIEF COMMISSIONER OF CUSTOMS

(PREVENTIVE) ZONE, PATNA

4TH FLOOR. C.R. BUILDING. BIRCHAND PATEL PATH.

PATNA-800001

[email protected] Fax: 0612-2504770

C.No. VIII (48)09-Compounding offence/CCO/CUS/T/2016/246970

Dated:04.10.2016

To,

Shri Dipak Bajaj,

S/o late Awat Ram Bajaj,

(i) H.No. 126-Flaxely Road, Morden,

SM46 LJ,London (U.K.)

(ii) C/o Dushyant Kumar (Consultant)

19/849, Ring Road, Indira Nagar,

Lunknow-226 016

NOTICE TO SHOW CAUSE

Whereas it appears that Shri Dipak Bajaj, S/o late Awat Ram Bajaj,

H.No.12, 6-Flaxely Road, Modern, SM46 U, London (U.K.) was

Intercepted by the officials of SSB at Sonauli on 02.04.2014 and

recovered gold in different forms from his packets of jacket/coat

and pants, underwear and socks total weighing 4320 gms of 3rd



95 country origin (U.K.) and Indian currency of Rs.5,000/-. The officers

of SSB, Sonauli handed over the recovered gold to the officers of

LCS Sonauli on 03.04.2014. On reasonable belief that the said

recovered gold was being smuggled into India from U.K. via Nepal

contravening the provisions of Notification No. 9/96-Cus dated

22.01.1996 issued under Section 11 of the Customs Act, 1962 and

thus liable for confiscation under Sections 111 & 119 of the Customs

Act' 1962, the officers of LCS Sonauli seized the said gold and

Indian currency of Rs.5,000/- and old white cloth, one. Pair of socks

and shoes under Section 110 of the Customs Act' 1962. Accordingly

a show cause notice was issued to him on 27.08.2014.

2. Whereas it appears that Vide O-in-0 No. 23/2015 dated

02.03.2015 the Adjudicating Authority i.e. Additional Commissioner,

Customs Lucknow has ordered for absolute confiscation of the

seized gold weighing 4320 gms. Valued at Rs.1,09,12,590/- and

Indian Rs5,000/- under Section lll (d) and also absolute confiscation

of old white cloth, one pair of socks and shoes under Section 119 of

the Customs Act' 1962 and also imposed a penalty of Rs.25,00,000/-

under Section 112 of the Customs Act' 1962 upon Shri Dipak Bajaj.

3. Whereas it appears that since, the offence committed by Shri

Dipak Bajaj was punishable under Section 135 of the Customs Act'

1962 hence, he was arrested under Section 104 of the Customs Act'

1962 by the order of the Competent Authority on 04.04.2014.

Prosecution was launched against him before the Hon'ble Court of


96 Chief Judicial Magistrate (Economic Offence) at Varanasi on

27.05.2014. Presently, Shri Bajaj is on bail as granted by the

Hon'ble High Court, Allahabad on 29.01.2015.

4. Whereas it appears that Shri Bajaj filed an application dated

25.01.2016 for compounding offence under Section 137 (3) of the

Customs Act, 1962 read with Rule 3 of the Customs (Compounding

of Offences) Rules, 2005.

5. Whereas it appears that as per rule 2 (e) of the Customs

(Compounding of Offences) Rules, 2005, a report, in this regard,

was called from the Reporting Authority i.e. Commissioner of

Customs (Prev.) Lucknow. The Reporting Authority vide his letters

dated 08.07.2016 and 19.08.2016 informed that as per the inputs

received at his end, Sri Dipak Bajaj is still indirectly indulged in the

smuggling activities and after re-examining the matter and seeing

the gravity & magnitude of the offence and its adverse impact on

the financial health of the country necessitating his prosecution

under Customs Act' 1962, he opined that compounding of offences

committed by the accused in the instant case should not be allowed.

6. Whereas it appears that the import of 3rd country origin gold

from Nepal, is prohibited vide Notification No. 9/96-Cus dated

22.01.1996. The Notification No. 9/96 dated 22.01.1996 is as

under:-


97 "In exercise of the powers conferred by sub-section (l) of Section 11

of the Customs Act, 1962(52 of 1962) and in supersession of the

Notification No. 76/F.No.80/83/65-LCI, dated the 19th June, 1965,

published in the Gazette of India vide No. GSR 848, dated the 19th

June, 1965, the Central Government, being satisfied- that for the

prevention of smuggling it is necessary so to do, hereby prohibits

the import from Nepal to India of goods which have been exported

to Nepal from countries other than India:

Provided that machinery and equipment used in Nepal for the

execution of a project may be allowed to be imported into India

from Nepal after completion of the project subject to the following

conditions namely:-

(i) The importer produces a certificate from the Indian Embassy

Kathmandu, that the machinery and equipment have in fact been

used for a period of one year for the execution of the project in

Nepal;

(ii) The project has been financed by an Agency of the United

Nations or the International Bank for Reconstruction and

Development Association or the Asian Development Bank or any

other multilateral agency or the Government of India; and

(iii) The importer had obtained the permission from the Reserve

Bank of India for import of the machinery and equipment into Nepal

for taking up work in the project in Nepal, if so required"


98 While it appears that the gold, under seizure, has conclusively been

proved to be of 3rd country origin and accordingly absolutely

confiscated. Section 137 (3) (C)(ii) of the Customs Act' 1962 clearly

envisages that nothing contained in this sub-section shall apply to a

person involved in smuggling of "Goods which are specified as

prohibited items for import and export in the ITC (HS) Classification

of Export and Import Items of the Foreign Trade Policy, as amended

fron, time to time, issued under section 5 of the Foreign Trade

(Development and Regulation) Act, 1992". Also, the compounding

cannot be claimed as a matter of right. In view of the contravention

of Notification No. 9/96 dated 22.01.1996 read with Section 137(3)

of the Customs Act' 1962 by the applicant as stated above, his

application for compounding of offence is liable to be rejected.

7. Whereas it appears that the applicant has failed to disclose all

the material facts in his application filed for compounding of offence

before the Compounding Authority. The applicant also filed an

application before Hon'ble CESTAT, Allahabad, in this regard. But

the same has not been disclosed by the applicant in his application

dated 25.01.2016, filed for compounding of offence under Customs

(Compounding of Offences) Rules, 2005 before the Compounding

Authority or later on. In the case of UOI Vs. Anil Channa (2008)

(222 ELT481 SC) the Hon'ble Supreme Court held that the basic rule

of disclosure underlying Section 137 (3) of the Customs Act' 1962, is

that if there are demonstrable contradictions or inconsistencies or


99 incompleteness in the case of applicant, the application for

compounding cannot be entertained. The application for

compounding ought to be disallowed if there are such contradictions

or inconsistencies or incompleteness. The present case is fully

covered by aforesaid judgment of Hon'ble Supreme Court.

8. Whereas it appears that the applicant has already filed an

application before Hon'ble CESTAT, Allahabad for seeking judicial

remedy and also filed application for compounding of offence under

Customs (Compounding of Offences) Rules, 2005. Both facilities

cannot be availed together.

9. Now, Shri Dipak Bajaj, S/o late Awat Ram Bajaj, H.No. 12, 6-

Flaxeiy Road, Modern, SM46 U, London (U.K.) is hereby called upon

to show cause to the Chief Commissioner Customs (Prev.) Zone

Patna, 4th floor. Central Revenue Building, Birchand Patel Path,

Patna-1 within 30 days of the receipt of this notice as to why his

application seeking for compounding of offence under Customs

(Compounding of Offences) Rules, 2005, should not be rejected

under sub-rule 3 of Rule 4 of Customs (Compounding of Offences)

Rules, 2005.

10. He should also clearly state in his reply to the show cause

notice whether he desires to be heard in person or through his legal

representative before the Compounding Authority. In case no reply

is received within the stipulated date and no such request for

personal hearing is made or in case he does not appear before the


100 Compounding Authority on the date and time as fixed without any

sufficient cause the case will be decided ex-parte on the basis of

available records without making any further reference.

11. This show cause notice is issued on the basis of available

evidence without prejudice to any other action that may be taken

against the person mentioned in this show cause notice under the

Customs Act, 1962 or any other law for the time being in force.

12. The department reserves the right to amend, modify or

supplement this notice at any time on the basis of further evidence

prior to decide the case.

13. This issues with the approval of the Chief Commissioner.

Joint Commissioner

Customs (Prev.) Zone, Patna

//True Copy//


101 ANNEXURE-P15

BEFORE THE CHIEF COMMISSIONER OF CUSTOMS ( PREVENTIVE)

ZONE, PATNA

IN THE MATTER OF SHOW CAUSE NOTICE ISSUED UNDER C. NO.

Vlll (48) 09-COMPOUND1NG OFFENCE/CCO/CUS/T/2016 DATED

04.10.2016

Respectfully the applicant Shri Dipak Bajaj, resident of house no. 12,

6-FIaxiey Road, Modern, SM46LJ, London (UK), begs to submit the

reply to the Show Cause Notice issued under C. NO. VIII (48) 09-

Compounding oflfcncc/CCO/CUS/T/2.016 dated 04.10.2016 for

rejection of application for compounding of offence under section

137(3) of Customs Act, 1962 read with Rule 4(3) of Customs

(Compounding of offences) Rules, ZOOS.

Brief facts of the case:-

1. The applicant Dipak Bajaj son of Lt. Awat Ram Bajaj, resident

of house no. 12, 6-Flaxley Road, Modern, SM46LJ, London (UK),

holder of British passport np.511352051, while coming from Nepal

on 02.04.2014 was stopped by the Officers of SSB Sonauli

(Nautanwa District-Maharajganj) for checking and during the course

of his personal search 4320 gms of gold totally valued at

Rs.1,09,12,590/- was found along with following goods and foreign

currency:-


102 a. Foreign currency total 475 pounds;

b. Nepali currency 410 ;

c. Indian currency lls.5700/-;

d. Passport No. 511352051;

e. Handset Blackberry (FCC No.L6ARCN70UW); and Nepali SIM-1;

2. After completion of necessary formalities the applicant along

with gold and currency etc., was handed over by SSB to the Officers

of Land Customs Station Sonauli on 03.04.2014 for further action.

Thereafter statements of applicant were recorded under Section 107

and 108 of the Customs Act, 1962, on 03.04.2014 and 04.04.2014.

The applicant had also produced the bills/invoices of purchase of

recovered gold from Birmingham (UK) which were issued in his own

name bearing nos. 0214312 dated 31.03.2014 for 500 gms gold ;

0208064 dated 25.02.2014 for one kg gold and 0010727 dated

31.03.2014 for one kg gold.

3. The customs Officers of LCS Sonauli seized the above gold and

foreign currency under Section 110 of the Customs Act, 1962. The

applicant was thereafter arrested under Section 104 of the Customs

Act, 1962 on 04.04.2014 and was produced before the Chief judicial

Magistrate, Varanasi, who sent him to the judicial custody up to

27.05.2014. Subsequently prosecution was sanctioned and launched

against the applicant by the Commissioner Customs (prev.)

Lucknow.


103 4. The applicant was released on bail by the Hon'ble High Court

All 29.01.2015 under the order for Criminal Misc. Bail Application

No. 2014.

5. The applicant was also issued a Show Cause Notice dated

27.08.2014 when he was lodged in District jail Varanasi and the

case was adjudicated by the Additional Commissioner Customs

Lucknow, vide Order No. 23/2015 dated 02.03.2015,under which

4320 gms of gold along with foreign currency was ordered for

absolute confiscation and a penalty of Rs.25,00,000/- was imposed

upon him. Thereafter the applicant deposited the adjudged penalty

of Rs.25,00,000/- on 05.11.2015 vide challan no. 2(40166946).

6. Since the prosecution was already ordered to be launched in

the present case by the Commissioner Customs (prev.), Lucknow,

the applicant filed an application for compounding of offence under

Rule 3 of the Customs (Compounding of Offences) Rules, 2005, vide

his application dated 25.01.2016. The copies of documents referred

above were also annexed as Annexure Al to A12 of the said

application.

7. Now the applicant is in receipt of a Show Cause Notice issued

under C. NO. VIII (48) 09-Compounding offence/CCO/CUS/T/2016

dated 04.10.2016 which was received in person at Patna when the

applicant personally visited Office of the Chief Commissioner

Customs (preventive) Zone situated at Patna to enquire about the

fate of his application dated 25.01.2016. The said Show Cause


104 Notice has been issued for rejection of the application dated

25.01.2016 of the applicant allegedly on the following grounds:-

(i) The reporting authority in his letters dated 08.07.2016 and

19.08.2016 informed the Chief Commissioner that as per the

inputs received at his end Shri Dipak Baja is still indirectly

indulged in the smuggling activity and after re-examining the

matter and seeing the gravity and magnitude of the offence and its

adverse impact on the financial health of the country necessitating

his prosecution under the Customs Act, 1962, has opined that

compounding of offences committed by the accused in the instant

case should not be allowed.

(ii) The goods allegedly illegally imported by the applicant is

prohibited under Notification No. 09/96-CUS dated 22.01.1996

and thereby debarring the applicant for compounding under sub-

clause (ii) of clause (c) of provisio to sub-section (3) of section 137

of the Customs Act, 1962.

(iii) The applicant has not disclosed the fact of appeal filed by him

before the CESTAT Allahabad against the order of adjudicating

authority bearing no. 23/2015 dated 02.03.2015 in his application

dated 25.01.2016 for compounding of offences before the

Compounding Authority. The said act of applicant allegedly

amounts to demonstrable contradiction or inconsistencies or

incompleteness of the application and therefore the compounding

cannot be entertained in terms of the decision of Supreme Court in


105 case of Union of India vs. Anil Chanana. [2000(222) 1SL.T 481

(SC)J. (iv) Since the applicant has already filed the appeal against

the order-in original dated 02.03.2015 before Hon'ble CESTAT

Allahabad for seeking judicial remedy and also filed the application

for compounding of offence under the Customs (Compunding of

Offences) Rules, 2005, he is not eligible for both the facilities.

Submission:-

1. The applicant most respectfully and humbly begs to submit

that the aforesaid Show Cause Notice for rejection of application of

compounding of offence has been issued on assumptions and

presumptions without appreciating the facts and mis-appreciating

the law and therefore is bad in law.

2. The applicant has submitted his application on 25.01.2016 and

the Show Cause Notice for rejection has been issued on 04.10.2016,

after elapse of period of more than eight months. The CBEC while

introduction of compounding scheme has issued elaborate

guidelines for considering the matter of compounding y the

compounding authority vide Circular No. 54/2005-Cus dated

30,12.2005. In the said Circular CBEC has delineated the very

purpose f compounding as to prevent litigation and encourage early

settlement of disputes. In the said Circular the offences have been

classified into technical and substantive offences under the Customs

Act, 1962. Offences under Section 135 and 135(A) of the Customs

Act, 1962, have been classified as substantive offence and in such


106 cases the guidelines are that the compounding should be allowed

once. It is submitted that the offence committed by the applicant is

alleged to be in the nature of those specified at Section 135 and

hence applicant's claim for compounding must be considered

positively keeping in view the purpose of compounding under the

Customs Act.

3. The Circular no. 54/2005 dated 30.12.2005 issued by CBEC

referred above at para 7 delineates the time limit under which the

compounding authority is expected to dispose of the application. It

says, "the applications for compounding of offences must be

disposed off within six months". In the present case the time limit of

six months has not been adhered to and a Show Cause Notice for

rejection of application for compounding of application has been

issued after eight months that too on flimsy grounds which is bad in

law and also barred by limitation. It is well settled that Circulars

issued by the Department are binding on the Departmental Officers.

And in the present case the time limit as prescribed in the said

Circular for disposing off the said application has not been adhered

to by the Department and the said Show Cause Notice needs to be

withdrawn on the ground of the limitation itself.

4. The CBEC Circular No. 54/2005-cus dated 30.12.2005 at para

6 also provides for intimating the assessees the offer of

compounding of offences at the time of initiating action for

launching of prosecution. However in this case no intimation of such


107 kind was received by the applicant and the prosecution proceedings

were initiated which is nothing but defeat of the very purpose of

compounding scheme under the Customs Act, 1962.

5. It is also submitted that the power to grant compounding

under Section 137(3) of the Customs Act,1962, is a statutory

obligation and should be decided in a systematized manner within

the reasonable time and with due care and diligence. However in

the present case the processes and time limit prescribed by CBEC in

the Circular no. 54/2005 dated 30.12.2005 has not been followed

and the Show Cause Notice needs to be withdrawn on this ground

alone. In the case of V. Shreeharan alias Murugan vs. Union of India

[2014 4 SCC 242] and Shatrughan Chauhan vs. Union of India

[2014 3 SCC 1], the Supreme Court while deciding the delay in

action on mercy petition has held that the right to seek mercy under

Article 72/161 of the Constitution of India is a constitutional right

and is not dependent at the discretion and whims of the executive.

Every constitutional duty must be fulfilled with due care and

diligence. The fact that no time limit is prescribed to the President/

Governor for disposal of mercy petition to work in a more

systematized manner to repose the confidence of people in the

institution of democracy. Drawing analogy from the said judgment

of the Hon'ble Apex Court it is submitted that the right to seek

compounding under the Customs Act, 1962, is a statutory right and

the authority must act with due care and diligence and within


108 reasonable time which is prescribed within the Circular itself. Not

binding to the said time limit debars the impugned Show Cause

Notice by limitation and must be withdrawn.

6. It is also well settled by Hon'ble Supreme Court in the case of

M/s Paper Products Ltd Vs. CCE [1999 (112) ELT 765 (SC)] that all

actions of the revenue department must be consistent with the

Circulars which was in force at relevant point. Hence, it is submitted

that keeping in view the essence of Circular No 54/2005-Cus dated

30.12.2005, the application of compounding by the applicant should

be allowed.

7. Another ground alleged by the Compounding Authority for

rejection of compounding is that the goods allegedly smuggled by

the applicant is prohibited goods and therefore the applicant is

debarred from compounding of offences in the instant case by

virtue of sub-clause (ii) of clause (c) of provisio to sub-section (3) of

section 137 of the Customs Act, 1962. for the sake of easy

reference it is submitted that the said provision reads "goods which

are specified as prohibited items for import and export in the ITC

(IIS) Classification of Export and Import Items of the Foreign Trade

Policy, as amended from time to time, issued under section 5 of the

Foreign Trade (Development and Regulation) Act, 1992 (22 of

1992)". On plain reading of the said provision it can be appreciated

that the compounding under this provision is prohibited for the

goods which arc specified as "prohibited" under ITC (HS) list for


109 import and export under Foreign Trade Policy issued under Section

5 of the Foreign Trade (Development and Regulation) Act, 1992 and

not under the Customs law for time being in force. It is re-iterated

that gold falling under Tariff Heading 71001300 is expressed as

"free" under the aforesaid list and therefore the case of applicant is

not debarred For compounding under the said provision.

8. It is further submitted that the Notification No. 09/96- Cus

dated 22.01.1996 as spelt out in the Show Cause Notice for holding

the goods as "prohibited" for the purpose of sub-clause (ii) of clause

(c) of provisio to sub-section (3) of section 137 of the Customs Act,

1962, has been issued under powers conferred under sub-section

(1) of Section 11 of the Customs Act, 1962 and not under Section 5

of the the Foreign Trade (Development and Regulation) Act, 1992.

Thus it may be appreciated that the case of the applicant is not

statutorily debarred from compounding and hence should be

allowed. It has also been well settled by the Hon'ble Supreme Court

in the case of Pradip Nanjee Gala Vs. Sales Tax Officer [2015-TIOL-

95-SC-CT-LB], that in a taxing statute one has to look merely at

what is clearly said and there is no room for any intendment.

Nothing is to be read in, nothing is to be implied. One can fairly look

at the language used. Applying the said principle, it is submitted

that prohibitions under Customs Act, 1962 cannot be held to be

debarred under sub-clause (ii) of clause (c) of provisio to subsection

(3) of section 137 of the Customs Act, 1962, for debarring the


110 prohibition must be under the specified provision of the Act.

Therefore, it may be appreciated that the case of applicant is not

covered under the said provision and hence his application of

compounding of offences must be allowed.

9. Further it is submitted that the maxim "Expressum facit

cessare taciturn" (meaning where there is express mention of

certain things than anything which is not mentioned is excluded) as

upheld by Hon'ble Supreme Court in the case of U0I Vs. Tulsidas

Pate! [1985 3 SCC -'98] as a system of logic and common sense is

rightly applicable in the present case and therefore the case of

applicant cannot be held to be debarred form compounding of

offences under sub-clause (ii) of clause (c) of provisio to sub-section

(3) of section 137 of the Customs Act, 1962, as alleged in the Show

Cause Notice.

10. The Show Cause Notice also alleges that the applicant has not

disclosed the fact of appeal filed by him before the CESTAT

Allahabad against the order of adjudicating authority bearing no.

23/2015 dated 02.03.2015 in his application dated 25.01.2016 for

compounding of offences before the Compounding Authority. The

said nr. of applicant allegedly amounts to demonstrable

contradiction or inconsistencies or incompleteness of the application

and therefore the compounding cannot be entertained in terms of

the decision of Supreme Court in case of Union of India vs. Anil

Chanana [2008(222) ELT 481 (SC)]. In this regard it is submitted


111 that the applicant has filed the application for Compounding of

Offence in the form prescribed under Rule 3 of the Customs

(Compounding of Offence) Rules 2005 and has furnished all the

particulars as required by the said form. It may be appreciated that

there is no column in the said form which requires such information

nor the provisions governing the Compounding of Offences under

the Customs Act, 1962 requires anything of this sort. Moreover, the

fact of filing of appeal before Hon'ble CESTAT Allahabad is not a

clandestine activity. It is indeed a statutory proceeding and the

department is kept informed of all the matters pertaining to such

facts by way of intimations or notices, and also given chance of

being heard. It is on record that the applicant has filed the

application for compounding of offences is on 25.01.2016 whereas

the appeal before CESTAT, Allahabad has been filed on 19.04.2016.

Thus the sard allegation of the department cannot be regarded as

demonstrable inconsistency or incompleteness in filing of application

before the Compounding Authority, so as to debar the applicant

from compounding of offences. The decision of 110! Vs Anil

Chanana was again considered in the case of Deepesh Mamodia Vs

Chief Commissioner of Customs (DZ) [2014 (3080 ELT 34 (Del.)] by

the Hon'ble High Court, Delhi wherein it was held that the power of

compounding under Section 137 (3) of the Customs Act, 1962 is

wide and the exclusions are well enumerated therein. For applying

the Rule of Disclosure, there must be demonstrable and substantive


112 contradiction and not the technical omissions. These aspects have

to be looked on facts and circumstances of each case. In the

present case the applicant has paid the entire amounts confirmed

by the 0rder4n-0riginal and is ready to pay the Compounding fees,

and his case is not debarred by other exclusions spelt out in the

statue. Therefore, it is submitted that the case of the applicant

merits consideration and the compounding should be allowed in his

case.

11. Regarding the allegation in the Show Cause Notice that, since

the applicant has already filed an appeal before Hon'ble CESTAT,

Allahabad for judicial remedy, his application cannot be allowed for

compounding, it is submitted that the appeal has been filed before

CESTAT Allahabad for the civil liability under the Customs Act, 1962

and the application for compounding is given for settlement of

criminal liability under the said Act. It is well settled that both the

liabilities run independent of each other and have to be weighed in

terms of defined offences and penalties. Appeal has been filed

before CESTAT, Allahabad under statutory right conferred by the

Customs Act, 1962 after complying with the specified provisions and

the same has nothing to do with the filing application for

compounding of offences. It is also submitted that filing of appeal

before CESTAT is not spelt out as a exclusion for compounding

under provisio to sub-section (3) of Section 137 of the Customs Act,


113 1962. Therefore, it is prayed that the application for compounding

of offence by the applicant should be allowed.

12. It is further alleged in the Show Cause Notice that the

reporting authority in his letters dated 08.07.2016 and 19.08.2016

informed the Chief Commissioner that as per the inputs received at

his end Shri Dipak 13ajaj is still indirectly indulged in the smuggling

activity and after re-examining the matter and seeing the gravity

and magnitude of the offence and its adverse impact on the

financial health of the country necessitating his prosecution under

the Customs Act, 1962, has opined that compounding of offences


In this regard, it is submitted that the said allegations are based on

assumptions and presumptions and do not hold water in the eyes of

law. The applicant is a person of 46 years old, has been mentally

disturbed since the time he was arrested on 04.04.2014, has

already been in jail for almost ten months when he was released on

bail. His passport has been seized because of which he cannot go

home as he is a British citizen, his family has taken a shape of

broken home. The applicant neither has the capacity nor the ability

or the means to indulge into such activities. Therefore the said

allegations are vehemently denied. The Show Cause Notice

Authority has neither enumerated any evidence nor provided any

evidence based on which such opinions were formed, and hence the


114 said charges must be held to without any basis and the application

of the applicant for compounding of offences should be allowed.

13. Further, it is also submitted that the above said allegations are

not only baseless but also extra-statutory. The Reporting Authority

is expected to furnish his report "with reference to the particulars

furnished in the application or any matter considered relevant for

examination of application". There is no provision under Rule 4 (1)

of the Customs (Compounding of Offence) Rules 2005 for furnishing

opinions by the Reporting Authority, that too after re-examining the

matter, and further to cause biasness in the minds of the

Compounding Authority. Thus, it is submitted that the Show Case

Notice issued on aforesaid grounds needs to be withdrawn merely

on the grounds of biasness and being baseless.

14. Without prejudice to what has been submitted above, it is

further submitted that there is no bar for compounding the first

offence even where it is of substantive nature as spelt out at clause

(a) and (d) of provisio sub-section (3) of Section 137 of the Customs

Act, 1962, and hence the application for compounding of offence by

the applicant should be allowed.

Prayer:-

15. In view of submissions made above, the applicant would like

to pray humbly that the Ld. Authority may like to refrain from

rejection of application made under the above rules or may like to

pass such orders as deemed fit in the circumstances of the case.


115 16. The Ld. Authority may like to appreciate the fact that the

applicant has suffered a lot so far in this case and it has ruined his

family life and business prospect and he is stranded in India for

such a long time. This has resulted into mental agony and further

lead to mental depression for which the applicant is under medical

treatment and consultation. Therefore, the applicant prays the

Hon'ble authority would take a compassionate view and grant

personal hearing in the case at the earliest. The applicant would feel

highly obliged if P.M. is fixed on 07.10.2016 since the applicant is

available by this date in Patna.

17. The applicant has authorized Shri Vimal Choudhary

Superintendent (Retd.), Central Excise & Service Tax, Patna to

represent his case before the competent authority and the

authorization is enclosed herewith.

Place :- Patna (Name & Signature of the applicant)

Date:- 06.10.2016 (Dipak Bajaj

//True Copy//


116 ANNEXURE-P16

IN THE HIGH COURT OF JUDICATURE AT PATNA

(CRIMINAL WRIT JURISDICTION CASE)

Criminal Writ Jurisdiction Case No. 1209 of 2016

Dipak Bajaj …….Petitioner

Versus

Union of India & Ors. ……Respondent

SYNOPSIS

That through the present writ application the petitioner seeks

following reliefs;-

i) To issue a writ in the nature of Mandamus commanding the

authorities to allow the application dated 25.01.2016 for

compounding of offence under Customs (Compounding of Offences)

Rules, 2005.

ii) To issue a writ in the nature of direction commanding the

authorities to release the Passport of the petitioner.

iii) To grant any other relief or reliefs to which the petitioner is

entitled in the facts and circumstances of the case.

The petitioner is a Non Resident Indian. The petitioner runs his

business in United Kingdom. A show cause notice bearing

no.246970 dated 03/04.10.2016 has been issued by the office of

Chief Commissioner of Customs (Preventive) Zone, Patna whereby

the petitioner has been asked to reply to the show cause notice


117 before the Compounding Authority. The show cause notice is issued

by the office of Customs which is in the territorial zone of State of

Bihar, therefore, the petitioner is entitled to invoke the extra

ordinary jurisdiction of this Hon'ble High Court. The office of Chief

Commissioner of Customs (Preventive) Zone, Patna, Government of

India vide letter no. 246970 dated 03/04.10.2016 issued show

cause notice to the petitioner as to why the petitioner's application

seeking for compounding of offences under Customs (Compounding

of Offences) Rules, 2005, should not be rejected under sub-rule 3 of

Rule 4 of Customs (Compounding of Offences) Rules, 2005. The

customs Officers of LCS Sonauli seized the above gold and foreign

currency under Section 110 of the Customs Act, 1962. The

petitioner was thereafter arrested under Section 104 of the Customs

Act, 1962 on 04.04.2014 and was produced before the Chief Judicial

Magistrate, Varanasi, who sent him to the judicial custody upto

27.05.2014. Subsequently prosecution was sanctioned and launched

against the petitioner by the Commissioner Customs (prev)

Lucknow. The petitioner was released on bail by the Hon'ble High

Court Allahabad on 29.01.2015 under the order for Criminal Misc.

Bail Application No.18322 of 2014. Since the prosecution was

already ordered to be launched in the present case by the

Commissioner Customs (Prev.), Lucknow, the petitioner filed an

application for compounding of offence under Rule 3 of the Customs

(Compounding of Offences) Rules, 2005, vide his application dated


118 25.01.2016. The petitioner has submitted his application on

25.01.2016 and the Show Cause Notice for rejection has been

issued on 04.10.2016, after elapse of period of more than eight

months. The reply to the Show Cause Notice dated 04.10.2016 was

already filed on 06.10.2016 and it was requested that the Personal

Hearing in the matter be fixed on 07.10.2016 as the petitioner was

available at Patna as inordinate delay has already beencaused on

the issue. Rather than being communicated for any date of hearing,

the petitioner received an Addendum dated 17.10.2016 to the said

Show Cause Notice thereby raising additional grounds for rejection

which amply speaks of biased mind of the Compounding Authority.

It is well settled that corrigendum or addendum can modify only

unsubstantial changes to the Show Cause Notice, but cannot

altogether bring about a new charge. In the said addendum, the

Compounding Authority has raised a new ground for rejection on

the basis of issuance of Circular No.46/2016 dated 04.10.2016 by

the CBEC. It is alleged that by way of said Circular, the stage of

launching prosecution has been advanced to the stage of issuance

of Show Cause Notice in the case of smuggling of gold, in place of

after completion of adjudication which means that the prosecution is

to be invariably launched in case of smuggling of gold and there is

no escape from the same. It is also alleged that in case of the

petitioner, the reporting authority has also reported that prosecution

in his case is in advanced stage with high probability of befitting


119 punishment being meted out to the petitioner and the hearing is in

crucial stage, therefore, application for seeking Compounding of

Offence, i.e. grant of escape from prosecution for criminal liability

would be clear cut violation of the latest Circular of the Board. It is

submitted that such procedure was never followed in the case of the

petitioner and the Show Cause Notice has been issued de hors the

procedure laid down and in contravention to the spirit of Circular

No. 54/2005-Cus dated 30.12.2005. Again, regarding the allegation

that the case of petitioner is in advanced stage of crucial hearing

with high probability of befitting punishment being meted out to the

petitioner, hence, compounding cannot be allowed. In this regard, it

is submitted that there is no bar in the Law for exceptions to

prosecution in all such cases. The law is clear that the compounding

can be allowed both before or after launching of prosecution, there

is not even a bar that compounding cannot be allowed even after

conviction. Thus the contention of the Compounding Authority has

been raised without basis of any valid illegal provisions, therefore,

same is bad in law and same has been issued to harass the

petitioner, which is impermissible in law and on facts. The petitioner

is not well and is suffering from many ailments for which the

petitioner regularly consults doctors and remains under their

supervision. The petitioner is diagnosed as "moderate depressive

episode" for which he requires effective and regular supervision

under the doctor. Besides the said ailment, the petitioner is diabetic


120 also. Considering this aspect, the authorities ought not to have sit

over the matter. The petitioner herein craves leave of this Hon'ble

Court to produce the documents concerning his ailments at the time

of hearing of the case, if required so, in the facts and Circumstances

of the case. Besides this, the petitioner being a PIO British Citizen

does not have necessary wherewithal and refuge to sustain his life

and there is no means of livelihood available to the petitioner.

LIST OF DATES AND EVENTS:

Date Events

02.04.2014 The Petitioner while coming from Nepal was stopped

by the Officers of SSB Sonauli (Nautanwa

District-Maharajganj for checking and during the

course of his personal search 4320 gms of gold totally

valued at Rs. 1,09,12,590/- was found along with

other goods and foreign currency.

03.04.2014 The petitioner was handed over by SSB to the

Officers of Land Customs Station Sonauli.

04.04.2014 The petitioner was thereafter arrested under Section

104 of the Customs Act, 1962 and was produced

before the Chief Judicial Magistrate, Varanasi, who

sent him to the judicial custody upto 27.05.2014.

Subsequently prosecution was sanctioned and

launched against the petitioner by the Commissioner


121 Customs (prev) Lucknow.

29.01.2015 That the petitioner was released on bail by the

Hon'ble High Court Allahabad under the order for

Criminal Misc. Bail Application No.18322 of 2014.

25.01.2016 The petitioner filed an application for compounding of

offence under Rule 3 of the Customs (Compounding

of Offences) Rules, 2005.

04.10.2016 A show cause notice bearing no.246970 has been

issued by the office of Chief Commissioner of

Customs

(Preventive) Zone, Patna whereby the petitioner has

been asked to reply to the show cause notice before

the Compounding Authority.

06.10.2016 Pursuant to the said show cause notice, the

petitioner replied before the authorities.

17.10.2016 The authorities vide letter no.2531 issued addendum

to the show cause notice dated 04.10.2016.

17.11.2016 The authorities in order to obviate the accountability

for delaying the issue of the petitioner, again

arbitrarily issued a letter asking for submission of

defence reply to addendum to show cause notice.

Hence, this writ petition


122 IN THE HIGH COURT OF JUDICATURE AT PATNA

(CRIMINAL WRIT JURISDICTION CASE)

Crl.W.J.C.No 1209 of 2016

In the matter of an application

under Articles 226 & 227 of the

Constitution of India.

And

In the matter of

Dipak Bajaj, Son of Late Awat Ram Bajaj, resident of House no.

12/6-Flaxley Road, Modern, SM46L.J, London (UK)

..... ....Petitioner

Versus

1. Union of India through Department of Revenue, Government of

India, North Block, New Delhi - 110 001.

2. The Department of Revenue through its Secretary, North Block,

New Delhi - 110 001.

3. The Secretary, Department of Revenue, Government of India,

North Block, New Delhi - 110 001.

4. The Chief Commissioner of Customs (Preventive) Zone Patna, 4th

Floor, C.R Building, Birchand Patel, Path, Patna-800001.

2. The Joint Commissioner, Customs (Preventive) Zone, Patna, 4th

Floor, C.R Building, Birchand Patel, Path, Patna-800001.

………Respondents

To,

The Mr. Justice Hemant Gupta, the Hon'ble Acting Chief

Justice of the High Court of Judicature at Patna and his Companion

Justices of the said Hon'ble Court.


123

The humble petition on behalf of the

petitioner above named.

Most Respectfully Sheweth:

1. That through the present writ application the petitioner seeks

following reliefs:-

i) To issue a writ in the nature of Mandamus commanding the

authorities to allow the application dated 25.01.2016 for

compounding of offence under Customs (Compounding of Offences)

Rules, 2005.

ii) To issue a writ in the nature of direction commanding the

authorities to release the Passport of the petitioner.

iii) To grant any other relief or reliefs to which the petitioner is

entitled in the facts and circumstances of the case.

2. That the main questions of law involved in the writ application

are as follows:-

a) Whether the authorities can act against the circular?

b) Whether the case of the petitioner is fit for compounding?

c) Whether the authorities are required to apply their independent

mind upon the available documents?

d) Whether the power to permit compounding under Section 137

(3) of Customs Act is wide?

e) Whether the case of the petitioner falls under the embargo place

upon the power of compounding?


124 f) Whether the case referred to in the show cause notice is not at all

applicable in the facts and circumstances of the petitioner's case?

g) Whether the satisfaction of the authorities is subjective or same

must be guided by objectivity?

h) Whether the impugned action of the authorities is colourable

exercise of power?

i) Whether the action of the authorities is per se illegal and

arbitrary?

3. That the petitioner is a Non Resident Indian. The petitioner runs

his business in United Kingdom. A show cause notice bearing

no.246970 dated 03/04.10.2016 has been issued by the office of

Chief Commissioner of Customs (Preventive) Zone, Patna whereby

the petitioner has been asked to reply to the show cause notice

before the Compounding Authority. The show cause notice is issued

by the office of Customs which is in the territorial zone of State of

Bihar, therefore, the petitioner is entitled to invoke the extra

ordinary jurisdiction of this Hon'ble High Court.

3. That office of Chief Commissioner of Customs (Preventive) Zone,

Patna, Government of India vide letter no. 246970 dated

03/04.10.2016 issued show cause notice to the petitioner as to why

the petitioner's application seeking for compounding of offences

under Customs (Compounding of Offences) Rules, 2005, should not

be rejected under sub-rule 3 of Rule 4 of Customs (Compounding of

Offences) Rules, 2005.


125 4. Photocopy of letter dated 03/04.10.2016 is

annexed herewith and marked as Annexure-1

to the application.

5. That pursuant to the said show cause notice, the petitioner

replied before the authorities on 06.10.2016.

Photocopy of reply dated 06.10.2016 is


to the application.

6. That instead of considering the merits of the reply filed by the

petitioner, the authorities vide letter no.2531 dated 17.10.2016

issued addendum to the show cause notice dated 04.10.2016 in the

matter of application for Compounding of Offences.

Photocopy of letter dated 17.10.2016 is


to the application.

7. That it is pertinent to bring on record the application for

compounding dated 25.01.2016 filed by the petitioner before the

Chief Commissioner of Customs, Patna Zone.

Photocopy of application dated 25.01.2016 is


to the application.

8. That it is to refer here that the petitioner is resident of house

no. 12,6-Flaxley Road, Modern, SM46LJ, London (UK), holder of

British passport no.511352051, while coming from Nepal on


126 02.04.2014 was stopped by the Officers of SSB Sonauli (Nautanwa

District-Maharajganj for checking and during the course of his

personal search 4320 gms of gold totally valued at Rs. 1,09,12,590/-

was found along with following goods and foreign currencyi-(a)

Foreign currency total 475 pounds;(b) Nepali currency 410;(c)

Indian currency Rs.5700/-;(d) Passport No.511352051 ;(e)Handset

Blackberry(FCCNo.L6ARCN70U); and Nepali SIM-1.

9. That after completion of necessary formalities, the petitioner

along with gold and currency etc., was handed over by SSB to the

Officers of Land Customs Station Sonauli on 03.04.2014 for further

action. Thereafter, statement of the petitioner was recorded under

Section 107 and 108 of the Customs Act, 1962 on 03.04.2014 and

04.04.2014. The petitioner had also produced the bills/invoices of

purchase of recovered gold from Birmingham (UK) which were

issued in his own name bearing nos. 0214312 dated 31.03.2014 for

500 gms gold; 0208064 dated 25.02.2014 for one kg gold and

0010727 dated 31.03.2014 for one kg gold.

10. That the customs Officers of LCS Sonauli seized the above

gold and foreign currency under Section 110 of the Customs Act,

1962. The petitioner was thereafter arrested under Section 104 of

the Customs Act,1962 on 04.04.2014 and was produced before the

Chief Judicial Magistrate, Varanasi, who sent him to the judicial

custody up to 27.05.2014. Subsequently prosecution was sanctioned


127 and launched against the petitioner by the Commissioner Customs

(prev.) Lucknow.

11. That the petitioner was released on bail by the Hon'ble High

Court Allahabad on 29.01.2015 under the order for Criminal Misc.

Bail Application No. 18322 of 2014.

12. That the petitioner was also issued a Show Cause Notice

dated 27.08.2014 when he was lodged in District jail Varanasi and

the case was adjudicated by the Additional Commissioner Customs

Lucknow, vide Order No. 23/2015 dated 02.03.2015, under which

4320 gms of gold along with foreign currency was ordered for

absolute confiscation and a penalty of Rs.25,00,000/- was imposed

upon him.Thereafter the applicant deposited the adjudged

penalty of Rs,25,00,000/- on 05.11.2015 vide challan no. 2

(40166946).

13. That since the prosecution was already ordered to be

launched in the present case by the Commissioner Customs (Prev.),

Lucknow, the petitioner filed an application for compounding of

offence under Rule 3 of the Customs (Compounding of Offences)

Rules, 2005, vide his application dated 25.01.2016.

14. That the petitioner most respectfully and humbly begs to

submit that the aforesaid Show Cause Notice for rejection of

application of compounding of offence has been issued on

assumptions and presumptions without appreciating the facts and

mis-appreciating the law and therefore, same is bad in law.


128 15. That the petitioner has submitted his application on

25.01.2016 and the Show Cause Notice for rejection has been

issued on 04.10.2016, after elapse of period of more than eight

months. The CBEC while introduction of compounding scheme has

issued elaborate guidelines for considering the matter of

compounding by the compounding authority vide Circular No.

54/2005 Cus dated 30.12.2005. The said Circular CBEC has

delineated the very purpose of compounding as to prevent litigation

and encourage early settlement of disputes. In the said Circular the

offences have been classified into technical and substantive offences

under the Customs Act, 1962. An offence under Section 135 and

135(A) of the Customs Act, 1962, have been classified as

substantive offence and in such cases the guidelines is that the

compounding should be allowed once. It is submitted that the

offence committed by the petitioner is alleged to be in the nature of

those specified at Section 135 and hence petitioner's claim for

compounding must be considered positively keeping in view the

purpose of compounding under the Customs Act.

16. That the Circular no.54/2005 dated 30.12.2005 issued by

CBEC referred above at para 7 delineates the time limit under which

the compounding authority is expected to dispose of the application.

It says, "The applications for compounding of offences must be

disposed of within six months". In the present case the time limit of

six months has not been adhered to and a Show Cause Notice for


129 rejection of application for compounding of application has been

issued after eight months that too on flimsy grounds which is bad in

law and also barred by limitation. It is well settled that Circulars

issued by the Department are binding on the Departmental Officers.

And in the present case the time limit as prescribed in the said

Circular for disposing off the said application has not been adhered

to by the Department and the said Show Cause Notice needs to be

withdrawn on the ground of the limitation itself.

17. That the CBEC Circular No, 54/2005-cus dated 30,12.2005 at

paragraph no.6 also provides for intimating the assesses offer of

compounding of offences at the time of initiating action for

launching of prosecution. However in this case no intimation of such

kind was received by the applicant and the prosecution proceedings

were initiated which is nothing but defeat of the very purpose of

compounding scheme under the Customs Act, 1962.

18. That it is also submitted that the power to grant compounding

under Section 137(3) of the Customs Act, 1962, is a statutory

obligation and should be decided in a systematized manner within

the reasonable time and with due care and diligence. However in

the present case the processes and time limit prescribed by CBEC in

the Circular no. 54/2005 dated 30.12.2005 has not been followed

and the Show Cause Notice needs to be withdrawn on this ground

alone. It is submitted that the right to seek compounding under the

Customs Act, 1962, is a statutory right and the authority must act


130 with due care and diligence and within reasonable time which is

prescribed within the Circular itself. Not binding to the said time

limit debars the impugned Show Cause Notice by limitation and

must be withdrawn.

19. That it is also well settled law that all actions of the revenue

Department must be consistent with the Circulars which was in

force at relevant point. Hence, it is submitted that keeping in view

the essence of Circular No 54/2005-Cus dated 30.12.2005, the

application of compounding by the petitioner must be allowed.

20. That further the Compounding Authority has taken the ground

for rejection of compounding is that the goods allegedly smuggled

by the petitioner is prohibited goods and therefore the petitioner is


virtue of subclause (ii) of clause (c) of proviso to sub-section (3) of

section 137 of the Customs Act, 1962. For the sake of easy

reference it is submitted that the said provision reads "goods which


(HS) Classification of Export and Import Items of the Foreign Trade

Policy, as amended from time to time, issued under section 5 of the

Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992)

". On plain reading of the said provision, it can be appreciated that

the compounding under this provision is prohibited for the goods

which are specified as "prohibited" under ITC (HS) list for import

and export under Foreign Trade Policy issued under Section 5 of the


131 Foreign Trade (Development and Regulation) Act, 1992 and not

under the Customs law for time being in force. It is reiterated that

gold falling under Tariff Heading 71081300 is expressed as "free"

under the aforesaid list, therefore, the case of the petitioner for

compounding under the said provision must be allowed.

21. That it is further submitted that the Notification No. 09/96-

Cus dated 22.01.1996 as spelt out in the Show Cause Notice for

holding the goods as "prohibited" for the purpose of sub-clause (ii)

of clause (c) of proviso to sub-section (3) of section 137 of the

Customs Act, 1962 has been issued under powers conferred under

sub-section (1) of Section 11 of the Customs Act, 1962 and not

under Section 5 of the Foreign Trade (Development and Regulation)

Act, 1992. Thus it may be appreciated that the case of the petitioner

is not statutorily debarred from compounding, hence, same should

be allowed. It is well settled law that in a taxing statute that there is

no room for any intendment. It is submitted that prohibitions under

Customs Act, 1962 cannot be held to be debarred under sub-clause

(ii) of clause (c) of proviso to sub-section (3) of Section 137 of the

Customs Act, 1962, for debarring the prohibition must be under the

specified provision of the Act. Therefore, it may be appreciated that

the case of petitioner is not covered under the said provision;

hence, his application of compounding of offences must be allowed.

22. That the Show Cause Notice also alleges that the petitioner

has not disclosed the fact of appeal filed by him before the CESTAT,


132 Allahabad against the order of adjudicating authority bearing no.


compounding of offences before the Compounding Authority and

the said act of petitioner allegedly amounts to demonstrable

contradiction or inconsistencies or incompleteness of the application,

therefore, the compounding cannot be entertained in terms of the

decision of Supreme Court in case of Union of India v/s Anil

Chanana [2008(222) ELT 481 (SC)]. In this regard it is submitted

that the petitioner has filed the application for Compounding of

Offence in the form prescribed under Rule 3 of the Customs



there is no column in the said form requiring such information nor

the provisions governing the Compounding of Offences under the

Customs Act, 1962 requires anything of this sort. Moreover, the fact

of filing of appeal before Hon'ble CESTAT Allahabad is not a

clandestine activity. It is indeed a statutory proceeding and the

Department is kept informed of all the matters pertaining to such

facts by way of intimations or notices and also given chance of

being heard. It is on record that the petitioner has filed the



Thus the said allegation of the department cannot be regarded as



133 before the Compounding Authority in order to debar the petitioner

from compounding of offences. The decision of UOI V/s Anil

Chanana was again considered in the case of Deepesh Mamodia V/s


the Hon'ble High Court, Delhi wherein it was held that the power of

compounding under Section 137 (3) of the Customs Act, 1962 is

wide and the exclusions are well enumerated therein. For applying

the Rule of Disclosure, there must be demonstrable and substantive

contradiction and not the technical omissions. These aspects have


present case, the petitioner paid the entire amounts confirmed by

the Order-In-Original and is ready to pay the Compounding fees and

his case is not debarred by other exclusions spelt out in the statue.

Therefore, it is submitted that the case of the petitioner merits

consideration and the compounding should be allowed in his case.

23. That the regarding the allegation in the Show Cause Notice

that the petitioner has already filed an appeal before Hon'ble

CESTAT, Allahabad for judicial remedy, his application cannot be

allowed for compounding, it is submitted that the appeal has been

filed before CESTAT Allahabad for the civil liability under the

Customs Act, 1962 and the application for compounding is given for

settlement of criminal liability under the said Act. It is well settled

that both the liabilities run independent of each other and have to

be weighed in terms of defined offences and penalties. Appeal has


134 been filed before CESTAT, Allahabad under statutory right conferred

by the Customs Act, 1962 after complying with the specified

provisions and the same has nothing to do with the filing application

for compounding of offences. It is also submitted that filing of

appeal before CESTAT is not spelt out as a exclusion for

compounding under proviso to subsection (3) of Section 137 of the

Customs Act, 1962. Therefore, it is prayed that the application for

compounding of offence by the petitioner should be allowed.

24. That it is further alleged in the Show Cause Notice that the

reporting authority in his letters dated 08.07.2016 and 19.08.2016

informed the Chief Commissioner that as per the inputs received at

his end Sri Deepak Bajaj is still indirectly indulged in the smuggling

activity and after re-examining the matter and seeing the gravity

and magnitude of the offence and its adverse impact on the


the Customs Act, 1962 has opined that compounding of offences



assumptions and presumptions and do not hold water in the eyes of

law. The petitioner is a person of 46 years old, has been mentally




home as he is a British citizen; his family has taken a shape of


135 broken home. The petitioner neither has the capacity nor the ability

or the means to indulge into such activities. Therefore, the said

allegations are vehemently denied. The Show Cause Notice

Authority has neither enumerated any evidence nor provided any

evidence based on which such opinions were formed, and hence the

said charges must be held to without any basis and the application

of the petitioner or compounding of offences should be allowed.

25. That it is also submitted that the above said allegations are

not only baseless but also extra-statutory. The Reporting Authority

is expected to furnish his report "with reference to the particulars

furnished in the application or any matter considered relevant for

examination of application". There is no provision under Rule 4 (1)

of the Customs (Compounding of Offence) Rules 2005 for furnishing

opinions by the Reporting Authority, that too after re-examining the

matter, and further to cause biasness in the minds of the

Compounding Authority. Thus, it is submitted that the Show Case

Notice issued on aforesaid grounds needs to be withdrawn merely

on the grounds of biasness and being baseless.

26. That without prejudice to what has been submitted above, it is

further submitted that there is no bar for compounding the first

offence even where it is of substantive nature as spelt out at clause

(a) and (d) of proviso sub-section (3) of Section 137 of the Customs

Act, 1962, hence, the application for compounding of offence by the

petitioner should be allowed.


136 27. That it is submitted that it is the mandate of law that the

Compounding Authority while discharging the statutory duty of

making proper enquiry is required to examine the available

materials with care and caution and the Compounding Authority

must be satisfied with the materials for proper enquiry in order to

pass the order of compounding.

28. That from perusal of provisions, it is evident that the power to

permit compounding of offences contained in Section 137(3) is

apparently wide, the concerned official is not empowered to allow

compounding in respect of offences under Section 135 and 135(A)

and the class of offences which are spelt out in clauses (b) & (c) of

the proviso to Section 137(3). Likewise, an embargo has been

placed upon the power of compounding in respect of a person who

has been allowed to compound once in respect of any offence under

Chapter XVI of the Customs Act, 1962. The requirement of

disclosure, apparently spelt out in Anil Chanana's case was read in

to the power under Section 137(3) of the Act, having regard to the

given circumstances of the case. It was highlighted during the

hearing, that the offence with which the importer or smuggler was

charged with in that case attracted a minimum sentence.

29. That the authorities ought to have taken into consideration

the real purport and nature of Section 137 of Customs Act, 1962,

From perusal of the provisions contained in Section 137, it is evident

that the petitioner does not come within the purview of the proviso


137 of Section 137. The petitioner does not fall within the zone of

proviso (b) of Section 137. Further, the petitioner also does not

come within the purview of proviso (c) (ii) of Section 137.

Therefore, the authorities cannot sit over the matter rather they are

obligated under law to decide the issue of the petitioner

expeditiously.

30. That as regards proviso (c) (ii) of Section 137, it is stated that

from perusal of ITC(HS),2012, Schedule-I, Import Policy, Section-

XlV, Chapter-71, (Exim Code-7108) -Gold (including gold plated with

platinum) unwrought or in semi-manufactured forms, or in powder

form, it is evident that same does not come within the purview of

the above said proviso. The petitioner craves leave of this Hon'ble

Court to bring on record the relevant extracts of schedule dealing

with the said code.

Photocopy of relevant extracts of schedule is


to the application.

31. That the Government of India, Ministry of Finance vide circular

no. 54/2005 dated 30.12.2005 issued guidelines for compounding of

offences. It is stated therein, "in order to make best of use of

compounding of offence, assesses at the time of intimation

/initiating action for launching of prosecution should be given an

offer of compounding. It may however be clarified that the


138 application for compounding shall be decided on merits and in the

absolute discretion of the Chief Commissioner. The cases where the

Chief Commissioner is not inclined to accede to applicant's request

for compounding as detailed in paragraph no.3 above, may be

rejected informing the grounds accordingly". It is further mentioned

therein, "adequate publicity may be given to the compounding of

offences Rules and these guidelines so that large numbers of cases

are compounded resulting in reduction in number of cases pending

in the Courts. All the applications for compounding of offences must

be disposed of within 6 months. The performance of the zone in

realization of compounding amount also may be indicated suitably in

the monthly report to the Directorate of Data Management".

Photocopy of guidelines is annexed herewith

and marked as Annexure-6 to the application.

32. That from perusal of the above said guidelines, it is apparent

that the application for compounding must be decided on merit

though absolute discretion vests in the Chief Commissioner but it is

settled law that even the exercise of absolute discretion, the

authority concerned should not bring element of subjectivity rather

same has to be done in most objective manner. In the present case,

the authorities are refraining from exercise of their discretion and

the application of the petitioner is put to shelve on one pretext or

another. It is amply clear that the Department insists upon

compounding of the cases and for that recourse to wide publicity is


139 resorted to in order to decrease the litigation. But in the present

case, the authorities are not compounding the petitioner's case for

reasons best known to them. The peculiar mode adopted by the

authorities is contrary to the wisdom expressed in guidelines in

letters and spirit.

33. That the authorities in order to obviate the accountability for

delaying the issue of the petitioner, again arbitrarily issued letter

dated 17.11.2016 asking for submission of defence reply to

addendum to show cause notice. This letter is an eye wash.

Photocopy of letter dated 17.11.2016 is annexed

herewith and marked as Annexure-7 to the

application.

34. That the reply to the Show Cause Notice dated 04.10.2016

was already filed on 06.10.2016 and it was requested that the

Personal Hearing in the matter be fixed on 07.10.2016 as the

petitioner was available at Patna as inordinate delay has already

been caused on the issue. Rather than being communicated for any

date of hearing, the petitioner received an Addendum dated

17.10.2016 to the said Show Cause Notice thereby raising additional

grounds for rejection which amply speaks of biased mind of the

Compounding Authority. It is well settled that corrigendum or

addendum can modify only unsubstantial changes to the Show

Cause Notice, but cannot altogether bring about a new charge. In

the said addendum, the Compounding Authority has raised a new


140 ground for rejection on the basis of issuance of Circular No.46/2016

dated 04.10.2016 by the CBEC. It is alleged that by way of said

Circular, the stage of launching prosecution has been advanced to

the stage of issuance of Show Cause Notice in the case of

smuggling of gold, in place of after completion of adjudication which

means that the prosecution is to be invariably launched in case of

smuggling of gold and there is no escape from the same. It is also

alleged that in case of the petitioner, the reporting authority has

also reported that prosecution in his case is in advanced stage with

high probability of befitting punishment being meted out to the

petitioner and the hearing is in crucial stage, therefore, application

for seeking Compounding of Offence, i.e. grant of escape from

prosecution for criminal liability would be clear cut violation of the

latest Circular of the Board. In this regard, it is submitted that the

aforesaid Circular of the CBEC simply brings about a modification to

Circular No. 27/2015-Cus dated 23.10.2015 which provides

guidelines for launching of prosecution and nowhere affects the

procedure for Compounding of Offences as contained at proviso to

Section 137 (3) of the Customs Act, 1962. The said provision spells

out that compounding can be done before or after launching of

prosecution. Thus, even if the stage of launching prosecution is

advanced to the Show Cause Notice stage in gold cases as stated in

the addendum to the show cause notice then also, there would be

no bar for compounding such cases. The parent Circular No.


141 27/2015-Cus 23.10.2015 at Para 12 mentions that the provisions

related to compounding should be brought to the notice of person

being prosecuted and such person be given an offer of

compounding as per Circular 54/2005-Cus dated 30.12.2005. It is

submitted that such procedure was never followed in the case of the

petitioner and the Show Cause Notice has been issued de hors the

procedure laid down and in contravention to the spirit of Circular

No. 54/2005-Cus dated 30.12.2005. Again, regarding the allegation

that the case of petitioner is in advanced stage of crucial hearing

with high probability of befitting punishment being meted out to the

petitioner, hence, compounding cannot be allowed. In this regard, it

is submitted that there is no bar in the Law for exceptions to

prosecution in all such cases. The law is clear that the compounding

can be allowed both before or after launching of prosecution, there

is not even a bar that compounding cannot be allowed even after

conviction. Thus the contention of the Compounding Authority ha?

been raised without basis of any valid illegal provisions, therefore,

same is bad in law and same has been issued to harass the

petitioner, which is impermissible in law and on facts.

35. That besides above, it is pertinent here to mention that the

petitioner is not well and is suffering from many an ailments for

which the petitioner regularly consults doctors and remains under

their supervision. The petitioner is diagnosed as "moderate

depressive episode" for which he requires effective and regular


142 supervision under the doctor. Besides the said ailment, the

petitioner is diabetic also. Considering this aspect, the authorities

ought not to have sit over the matter. The petitioner herein craves

leave of this Hon'ble Court to produce the documents concerning his

ailments at the time of hearing of the case, if required so, in the

facts and circumstances of the case. Besides this, the petitioner

being a PIO British Citizen does not have necessary wherewithal and

refuge to sustain his life and there is no means of livelihood

available to the petitioner.

36. That it is submitted that the authorities cannot act against the

circular.

37. That it is submitted that case of the petitioner is fit for

compounding.

38. That it is submitted that the authorities are required to apply

their independent mind upon the available documents.

39. That it is submitted that the power to permit compounding

under Section 137 (3) of Customs Act is wide.

40. That it is submitted that the case of the petitioner does not fall

under the embargo place upon the power of compounding.

41. That it is submitted that the case referred to in the show

cause notice is not at all applicable in the facts and circumstances of

the petitioner's case.

42. That it is submitted that the satisfaction of the authorities

must be objective.


143 43. That it is submitted that the impugned action of the

authorities is colorable exercise of power.

44. That it is submitted that the action of the authorities is per se

illegal and arbitrary.

45. That the petitioner has no alternative remedy than to move

this Hon'ble Court for redressal of the grievances. 46.That the

petitioner has not moved earlier before this Hon'ble Court for the

reliefs stated in the matter.

It is, therefore, prayed that your Lordships

may graciously be pleased to consider the

facts and circumstances of the case and issue

Rule NISI calling upon the respondents as to

why reliefs prayed for in paragraph no.1 in this

writ application be not allowed in favour of the

petitioner and upon return of the rule and

make the rule absolute.

And /or

Pass such other order(s) or direction(s) as

your Lordships may deem fit and proper in the

facts and circumstances of the case.

And for this the petitioner shall ever pray.

Dated : Nil


144

A F F I D A V I T

I, Dipak Bajaj, Aged about 46 years, Son of Late Awat Ram Bajaj,

resident of House no. 12/6-Flaxley Road, Modern, SM46L.J, London

(UK), do hereby solemnly affirm and state as follows:-

1. That I am the petitioner and as such I am acquainted with

the facts and circumstances of the case.

2. That I have read the contents of this writ application and I

have fully understood the same. The statement made in

paragraph

Nos 3, 8 to 29, 32, 34 to 46 are true to my knowledge and those

made in paragraph nos 4 , 5, 67 and 30, 31 and 33 are true to my

information derived from the records of the case and the rests are

by way of submissions before this Hon’ble Court.

3. That the annexures are photocopies of their respective

original.

Dated: Nil

//True Copy//


145 ANNEXURE-P17

GOVERNMENT OF INDIA

OFFICE OF THE CHIEF COMMISSIONER OF CUSTOMS (PREVENTIVE) ZONE, PATNA

4th FLOOR, C.R. BUILDING, BIRCHAND PATEL PATH, PATNA

ORDER No.: 01/Compounding/2017

Dated : 16.01.2017

Shri Dipak Bajaj, S/o Late Awat Ram Bajaj, H.No.12, 6-Flaxely Road,

Modern, SM46 LJ, London (U.K.) has filed an application dated

25.01.2016 before the Chief Commissioner, Customs(Preventive)

Zone, Patna (Compounding Authority) for compounding of offence

under Section 137 of the Customs Act, 1962 read with Rule 3 of the

Customs (Compounding of Offences) Rules, 2005, as amended in

respect of case of 4.320 Kg smuggled gold valued at

Rs.1,09,12,590/- (Rupee One Crore Nine lakh Twelve thousand five

hundred and ninety) recovered and seized from him on 03.04.2014.

BRIEF FACTS OF THE CASE

1. Shri Dipak Bajaj, S/o Late Awat Ram Bajaj, H.No.12, 6-Flaxely

Road, Modern, SM46 LJ, London (U.K.) (hereinafter referred as

"Applicant") was intercepted by the officials of SSB at Sonauli on

02.04.2014 and gold in different forms totally weighing 4320 gms of

3rd country origin (U.K.) (hereinafter referred as "smuggled gold")

and Indian currency of Rs.5,000/- were recovered from him

concealed in pockets of his jacket/coat and pants, underwear and


146 socks. The officers of SSB, Sonauli handed over the recovered

"smuggled gold" to the officers of LCS Sonauli on 03.04.2014. On

reasonable belief that the said recovered gold was being smuggled

into India from U.K. via Nepal contravening the provisions of

Notification No.09/1996-Cus dated 22.01.1996 issued under section

11 of the Customs act, 1962 and thus liable for confiscation under

Sections 111 & 119 of the Customs Act, 1962, the officers of LCS

Sonauli seized the said "smuggled gold" and Indian currency of

Rs.5,000/-, old white cloth, one pair of socks and shoes under

Section 110 of the Customs Act, 1962. After investigation, a show

cause notice was issued to him on 27.08.2014.

2. Vide O-in-0 No.23/2015 dated 02.03.2015, the Adjudicating

Authority, i.e. Additional Commissioner, Customs, Lucknow ordered

for absolute confiscation of the seized gold weighing 4320 gms.

valued at Rs.1,09,12,590/- along with Indian currency of Rs.5,000/-

under Section 111(d) of the Customs Act, 1962 and also ordered for

absolute confiscation of old white cloth, one pair of socks and shoes

under Section 119 of the Customs Act, 1962 and also imposed a

penalty of Rs.25,00,0007- under Section 112 of the Customs Act,

1962 upon Shri Dipak Bajaj. The Appeal filed by Applicant against

the aforesaid Order-in-Original dated 02.03.2015 has also been

rejected by Commissioner (Appeals), Lucknow vide his Order-in-

Appeal No. 03/C us/A I Id/2016 dated 13.01.2016.


147 3. Since the offence committed by Shri Dipak Bajaj was

punishable under Section 135 of the Customs Act, 1962 hence, he

was arrested under Section 104 of the Customs Act, 1962 by the

order of the Competent Authority on 04.04.2014. Prosecution was

launched against him before the Hon'ble Court of Chief Judicial

Magistrate (Economic Offence) at Varanasi on Presently, Shri Bajaj

is on bail as granted by the Hon'ble High Court, Allahabad on Shri

Dipak Bajaj filed an application before the Hon'ble Spl. CJM,

Varanasi for release of his seized passport, but the Hon'ble Spl. CJM,

Varanasi vide his order dated 05.05.2015 has ordered that

since Applicant is foreign national, therefore, if he is allowed to go

outside India, his presence could not be ensured in future during

trial. He appealed against the said order before the Hon'ble Spl.

Session Judge Varanasi but the Hon'ble Spl. Session Judge Varanasi

vide order dated 22.08.2015 dismissed the appeal of the Applicant

and upheld the order of the Spl. CJM. Appeal of the Applicant

against the order of the Spl. Session Judge has also been rejected

by the Hon'ble High Court, Allahabad vide order dated 15.10.2015

and directed the Applicant for filing petition under section 482 of the

Criminal Procedure Code. Further, the Applicant filed application

before Hon'ble High Court, Allahabad under section 482 of Cr.P.C.

Accordingly, Hon'ble High Court, Allahabad vide his order dated

22.12.2015 has directed that :


148 "Considering the facts of the case, without expressing any

opinion on the merits of the Applicant's case, this application

U/s 482 Cr.P.C. is finally disposed of with a direction to the

court below to decide Case No. 1 of 2014, under Section

104/135 Customs Act, P.S. Sima Sulk Sonauli, District

Maharajganj in accordance with law without granting

unnecessary adjournments to either of the parties as

expeditiously as possible preferably within a period of

six months from the date of production of certified copy of

this order, if there is no legal impediment."

4. Name of Applicant in High Court orders dated 15.10.2015 &

22.12.2015 is mentioned as "Deepak Bajaj" and not as "Dipak Bajaj"

which raises doubts about intention of Applicant using two names in

proceedings for reasons best known to him. An application dated

25.01.2016 was filed by Shri Dipak Bajaj for compounding offence

under Section 137(3) of the Customs Act, 1962 read with Rule 3 of

the Customs (Compounding of Offences) Rules, 2005. (Hereinafter

referred as Rules), without disclosing these vital facts, which has

come to knowledge of department during antecedent verification by

Reporting Authority.

5. As per Rule 2(e) of the Customs (Compounding of Offences)

Rules, 2005, reports, in this regard, were called from the Reporting

Authority, i.e. Commissioner of Customs (Prev), Lucknow. Based on


149 reports and antecedent verifications of 'Applicant' by Reporting

Authority,

Show Cause Notice dated 04.10.2016 was issued under

C.No.VIII(48)09-Compounding offence/CCO/CUS/T/2016/2469

dated 04.10.2016 to Mr. Dipak Bajaj requiring therein to show cause

to the Chief Commissioner, Customs(Prev.) Zone, Pana as to why

his application seeking for compounding of offence under Customs

(Compounding of Offences) Rules, 2005, should not be rejected

under sub-rule 3 of Rule 4 of Customs (Compounding of Offences)

Rules, 2005 on the ground that:

(i) Import of 3rd country origin gold from Nepal, is

prohibited vide Notification No.9/96-Cus dated 22.01.199

read with Section 137(3) of the Customs Act, 1962.

While it appears that the gold, under seizure, has conclusively been

proved to be of 3rd country origin and accordingly absolutely

confiscated. Section 137 (3)(C)(ii) of the Customs Act, 1962 clearly

envisages that nothing contained in this sub-section shall apply to a

person involved in smuggling of "Goods which are specified as

prohibited items for import and export in the ITC (HS)

Classification of Export and Import Items of the Foreign

Trade Policy, as amended from time to time, issued under section

5 of the Foreign Trade (Development and Regulation) Act, 1992".

Also, the compounding cannot be claimed as a matter of right.


150 (ii) The Applicant has failed to disclose all the material

facts in his application filed for compounding of offence before

the Compounding Authority. The Applicant also filed an application

before Hon'ble CESTAT, Allahabad, in this regard. But the same

has not been disclosed by the Applicant in his application dated

25.01.2016 before the Compounding Authority or later on. In the

case of UOI Vs. Anil Channa (2008) (222 ELT481 SC) the

Hon'ble Supreme Court held that the basic Principle of

Disclosure underlying Section 137 (3) of the Customs Act,

1962, is that if there are demonstrable contradictions or

inconsistencies or incompleteness in the case of Applicant,

the application for compounding cannot be entertained.

6. In view of spurt in smuggling of Gold in country, CBEC, issued

Circular No.46/2016 dated 04.10.2016 to make stringent provisions

against persons involved in smuggling of gold. An addendum to

above Show Cause Notice, taking cognizance of recently issued

CBEC Circular No.46/2016 dated 04.10.2016 amending the Circular

No.27/2015 dated 23.10.2015, was issued, which inter-alia

mentioned that "vide which the stage of launching prosecution has

been advanced to the stage of issuance of show cause notice in

place of stage after completion of adjudication which means that

prosecution is to be invariably launched in the case of smuggling of

gold and there is no escape from the same". In case of the

Applicant, the Reporting Authority has reported that the prosecution


151 in this case is already launched on 27.05.2014 and hearing in the

matter is in crucial stage with high probability of befitting

punishment being meted out to the Applicant, therefore, the

application for seeking Compounding of Offence, that is, grant of

escape from prosecution for criminal liability would be

in clear cut violation of latest circular of the Board". The Applicant

did not submit the reply to the addendum to show cause

notice in stipulated period. Therefore the Applicant was

reminded for the same vide this office letters dated 17.11.2016,

24.11.2016 and 06.12.2016 and he submitted the reply only

on 27.12.2016 at the time of personal hearing, after more

than 2 months.

7. Director General, DRl, New Delhi was reminded vide this office

letter dated 19.09.2016 to intimate information about the Applicant,

required under Section 137 (3) of the Customs Act, 1962. The

Assistant Director (G.I.), DRl, New Delhi vide his letter dated

07.10.2016 informed that two cases were booked by the DRl,

Mumbai Zonal Unit against one Shri Deepak Bajaj, R/o 6-B,

Devashish, Peddar Road, Mumbai, which created a doubt in the

mind whether both the Deepak Bajaj are same or not. Further the

Assistant Director (G.I.), DRl, New Delhi vide his letter dated

24.10.2016 requested to the Deputy Director, DRl, Zonal Unit,

Mumbai about the verification of the Applicant with the Deepak

Bajaj against whom DRl, Mumbai Zonal Unit booked the cases. Vide


152 letter dated 11.11.2016 this office had also requested to the Deputy

Director, DRl, Zonal Unit, Mumbai about verification of the

Applicant. The Deputy Director, DRl, Zonal Unit, Mumbai vide his

letter dated 23.11.2016 had forwarded a copy of personal data &

financial profile of Shri Deepak Bajaj against whom DRl, Mumbai

Zonal Unit booked the cases. Name of Applicant in High Court

orders dated 15.10.2015 & 22.12.2015 as well as CESTAT is

mentioned as "Deepak Bajaj" and not as "Dipak Bajaj" which

raises doubts about intention of Applicant using two names in

proceedings for reasons best known to him. This fact has not been

disclosed by Applicant in his application which is evidence of

demonstrable contradictions, incompleteness & inconsistencies in

case of Applicant making his application for Compounding non-

maintainable.

REPLY AND SUBMISSIONS OF APPLICANT

8. Shri Dipak Bajaj through his letter dated 06.10.2016 in reply

to the Show Cause Notice dated 04.10.2014 has stated that the

Show Cause Notice for rejection of compounding of offence has

been issued on assumptions and presumptions without appreciating

the facts and mis-appreciating the law and therefore is bad in law.

He also relied heavily on Circular No. 54/2005 dated

30.12.2005, which does not exist and has been superseded


153 by Circular No. 29/2009-Cus dated 15.10.2009. However, his

submissions, as submitted, are as follows:

9. He stated that he has submitted his application on 25.01.2016

and the Show Cause Notice for rejection has been issued on

04.10.2016, after elapse of period of more than eight months. The

CBEC while introduction of compounding scheme has issued

elaborate guidelines for considering the matter of compounding vide

Circular No.54/2005-Cus dated 30.12.2005. Circular No.54/2005

dated 30.12.2005 issued by CBEC referred above at para 7

delineates the time limit under which the compounding authority is

expected to dispose off the application. CBEC Circular No.54/2005-

Cus dated 30.12.2005 at para 6 also provides for intimating the

assessees the offer of compounding of offences at the time of

initiating action for launching of prosecution. However, in this case

no intimation of such kind was received by the application and the

prosecution proceedings were initiated which is nothing but defeat

of the very purpose of compounding scheme under the Customs

Act, 1962.

10. He also submitted that the power to grant compounding under

Section 137(3) of the Customs Act, 1962, is a statutory obligation

and should be decided in a systematized manner within the

reasonable time and with due care and diligence. In the case of V.

Shreeharan alias Murugan vs Union of India [2014 4 SCC 242] and


154 Shatrughan Chauhan vs Union of India [2014 3 SCC 1], the

Supreme Court while deciding the delay in action on mercy petition

has held that the right to seek mercy under Article 72/161 of the

Constitution of India is a constitutional right and is not dependent at

the discretion and whims of the executive. Every constitutional duty

must be fulfilled with due care and diligence. The fact that no time

limit is prescribed to the President/Governor for disposal of mercy

petition to work in a more systematized manner to repose the

confidence of people in the institution of democracy.

11. Another ground alleged by the Compounding Authority for

rejection of compounding is that the goods allegedly smuggled by

the Applicant is prohibited goods and therefore the Applicant is


virtue of sub-clause (ii) of clause(c) of proviso to sub-section (3) of

section 137 of the Customs Act, 1962. For the sake of easy

reference, it is submitted that the said provision reads "goods which


(HS) Classification of Export and Import Items of the Foreign Trade

(Development and Regulation) Act, 1992 (22 of 1992)". On plain

reading of the said provision, it can be appreciated that the

compounding under this provision is prohibited for the goods which

are specified as "prohibited" under ITC(HS) list for import and

export under Foreign Trade Policy issued under Section 5 of the

Foreign Trade (Development and Regulation) Act, 1992 and not


155 under the Customs law for time being in force. It is reiterated that

gold falling under Tariff Heading 71081300 is expressed as "free"

under the aforesaid list and therefore the case of Applicant is not

debarred for compounding under the said provision.

12. He has further submitted that the Notification No. 09/96-Cus

dated 22.01.1996 as spelt out in the Show Cause Notice for holding

the goods as "prohibited" for the purpose of sub clause (ii) of clause

© of provisio to sub-section (3) of section 137 of the Customs Act,

1962, has been issued under powers conferred under sub-section

(1) of Section 11 of the Customs Act, 1962 and not under Section 5

of the Foreign Trade (Development and Regulation) Act, 1992. Thus

it may be appreciated that the case of the Applicant is not

statutorily debarred from compounding and hence should be

allowed. It has also been well settled by the Hon'ble Supreme Court

in the case of Pradip Nanjee Gala Vs. Sales Tax Officer [2015-TIOL-

95-SC-CT-LB], that in a taxing statute one has to look merely at

what is clearly said and there is no room for any intendment.

Nothing is to be read in, nothing is to be implied. One can fairly look

at the language used. Applying the said principle, it is submitted

that prohibitions under Customs Act, 1962 cannot be held to be

debarred under sub-clause (ii) of clause(c) of provisio to sub-section

(3) of section 137 of the Customs Act, 1962, for debarring the

prohibition must be under the specified provision of the Act.

Therefore, it may be appreciated that the case of Applicant is not


156 covered under the said provision and hence his application of

compounding of offences must be allowed.

13. Further, he has submitted that the maxim "Expressum facit

cessare taciturn" (meaning where there is express mention of

certain things than anything which is not mentioned is excluded) as

upheld by Hon'ble Supreme Court in the case of UOI Vs. Tulsidas

Patel [1985 3 SCC 398] as a system of logic and common sense is

rightly applicable in the present case and therefore the case of

Applicant cannot be held to be debarred from compounding of

offences under sub-clause (ii) of clause (c) of proviso to sub-section

(3) of section 137 of the Customs Act, 1962, as alleged in the Show

Cause Notice.

14. The Show Cause Notice also alleges that the Applicant has not

disclosed the fact of appeal filed by him before the CESTAT

Allahabad against the order of adjudicating authority bearing no.


compounding of offences before the Compounding Authority. The

said act of Applicant allegedly amounts to demonstrable

contradiction or inconsistencies or incompleteness of the application

and therefore the compounding cannot be entertained in terms of

the decision of Supreme Court in case of Union of India Vs. Anil

Chanana (2008(222)] ELT 481 (SC)]. In this regard, it is submitted

that the Applicant has filed the application for Compounding of


157 Offence in the form prescribed under Rule 3 of the Customs



there is no column in the said form which requires such information

nor the provisions governing the Compounding of Offences under

the Customs Act, 1962 requires anything of this sort, Moreover, the

fact of filing of appeal before Hon'ble CESTAT Allahabad is not a

clandestine activity, it is indeed a statutory proceeding and the

department is kept informed of all the matters pertaining to such

facts by way of intimations or notices, and also given chance of

being heard, it is on record that the Applicant has filed the



Thus the said allegation of the department cannot be regarded as


before the Compounding Authority, so as to debar the Applicant

from compounding of offences. The decision of UOI Vs. Anil

Chanana was again considered in the case of Depesh Mamodia Vs.


the Hon'ble High Court, Delhi wherein it was held that the power

and the exclusions are well enumerated therein. For applying the

Principle of Disclosure, there must be demonstrable and substantive

contradiction and not the technical omissions. These aspects have



158 present case the Applicant has paid the entire amounts confirmed

by the Order-ln-Original and is ready to pay the Compounding fees,

and his case is not debarred by other exclusions spelt out in the

statue. Therefore, it is submitted that the case of the Applicant

merits consideration and the compounding should be allowed in his

case.

15. He submitted that regarding the allegation in the Show Cause

Notice that, since the Applicant has already filed an appeal before

Hon'ble CESTAT, Allahabad for judicial remedy, his application

cannot be allowed for compounding, and also submitted that the

appeal has been filed before CESTAT Allahabad for the civil liability

under the Customs Act, 1962 and the application for compounding

is given for settlement for criminal liability under the said Act. It is

well settled that both the liabilities run independent of each other

and have to be weighed in terms of defined offences and penalties.

Appeal has been filed before CESTAT, Allahabad under statutory

right conferred by the Customs Act, 1962 after complying with the

specified provisions and the same has nothing to do with the filing

application for compounding of offences. It is also submitted that

filing of appeal before CESTAT is not spelt out as a exclusion for

compounding under proviso to sub-section (3) of Section 137 of the

Customs Act, 1962. Therefore, prayed that the application for

compounding of offence by the Applicant should be allowed.


159 16. He stated that it is further alleged in the Show Cause Notice

that the reporting authority in his letters dated 08.07.2016 and

19.08.2016 informed the Chief Commissioner that as per the inputs

received at his end Shri Dipak Bajaj is still indirectly indulged in the

smuggling activity and after re-examining the matter and seeing the

gravity and magnitude of the offence and its adverse impact on the


the Customs Act, 1962, has opined that compounding of offences



assumptions and presumptions and do not holds water in the eyes

of law. The Applicant is a person of 46 years old, has been mentally




home as he is British citizen, his family has taken a shape broken

home. The Applicant neither has the capacity nor the ability or the

means to indulge into such activities. Therefore, the said allegations

are vehemently denied.

17. In reply to the addendum the Applicant stated that the

addendum was issued after filing of the reply and without

considering the legal grounds put forth in the reply and also made a

Circular No. 46/2016 which was issued on 04.10.2016, a ground for

rejection applying it retrospectively, although the said Circular


160 nowhere mentions about its retrospective effect. It is settled

principle that the law or provision related thereto cannot be applied

retrospectively, if not provided in the statute itself. The said Circular

simply advances the stage of launching of prosecution in cases of

smuggling of gold by amending the parent Circular 27/2015-Cus

dated 23.10.2015, The aforesaid Circular nowhere amends provision

or instructions related to compounding of offences as prescribed

under circular No. 27/2015- Cus dated 23.10.2015 which, at para

12, inter alia provides that guidelines issued under Circular No.

54/2005-Cus dated 30.12.2005 should be adhered to. He further

added that the statute nowhere prohibits the cases for

compounding even where the hearing is at advance stage or even

where conviction has been made. Applicant also informed having

filed a Criminal writ Petition before the Hon'ble Patna High Court on

21.11.2016 in the matter.

RECORD OF PERSONAL HEARING

18. In compliance with the Principles of Natural Justice, Show

Cause Notice dated 04.10.2016 and addendum dated 17.10.2016

were issued in the instant case. Applicant did not submit reply to

addendum despite three reminders and submitted reply on

27.12,2016 at the time of Personal Hearing after lapse of more than

2 months. The personal hearing was held before me on 27.12.2016

at 11.30 hrs. which was attended by the Applicant Sri Dipak Bajaj

along with Sri Vimal Chaudhary and Sri Amit Pandey, both


161 authorized representatives, in which he reiterated submissions made

as per the letter dated 06.10.2016 and letter dated 27.12.2016.

DISCUSSION & FINDINGS

19. I have carefully gone through the Show Cause Notice dated

04.10.2016, addendum to Show Cause Notice dated 17.10.2016,

submissions of the Applicant dated 06.10,2016 and submission

dated 27.12.2016, the parawise comments of Reporting Authority

on aforesaid reply and records of the case.

20. I find that the Applicant has filed an application dated

25.01.2016 for compounding of offences under section 137(3) of

the Customs Act, 1962 read with Rule 3 of the Customs

(Compounding of offences) Rules, 2005 under Notification

No.114/2005-Cus(N.T.) dated 30.12.2005 as amended. The case is

to be decided mainly on the following grounds :-

(i) Whether the goods recovered and seized from the possession

of the Applicant are "prohibited goods" as has been held by the

Hon'ble Apex Court in case of M/s Om Prakash Bhatia Vs.

Commissioner of Customs Delhi 2003(155)E.L.T. 423 (SC)?

(ii) Whether the Applicant has made full disclosure or not in

respect of the instant case as has been held to be basic Principle of

Disclosure underlying Section 137(3) of the Customs Act, 1962 by

the Apex Court in UOI Vs. Anil Channa 2008(222) ELT481 (SC)?


162 (iii) Whether the offence committed by the Applicant in respect of

aforesaid "prohibited goods" falls within the purview of

Compounding of Offences envisaged under Section 137(3) of the

Customs Act, 1962 read with sub-rule 3 of Rule 4 of the Customs

(Compounding of offences) Rules, 2005 or not ?

21. It is seen from records of the case that absolute confiscation

of goods is ordered by Adjudicating Authority by referring to

Sections 111(d) of the Customs Act, 1962. It reads as under:-

Section 111 Confiscation of improperly imported goods, etc. -

(d) "Any goods which are imported or attempted to be imported or

are brought within the Indian customs waters for the purpose of

being imported, contrary to any prohibition imposed by or under this

Act or any other law for the time being in force".

The aforesaid Section empowers the authority to confiscate any

goods attempted to be imported contrary to any prohibition

imposed by or under the Act or any other law for the time being in

force. Hence, for application of the said provision, it is required to

be established that attempt to import the goods was contrary to any

prohibition imposed under any law for the time being in force.

Further Section 2(33) of the Customs Act, 1962 of the Act defines

"prohibited goods" as under:


163 "prohibited goods" means any goods the import or export of which

is subject to any prohibition under this Act or any other law for the

time being in force but does not include any such goods in respect

of which the conditions subject to which the goods are permitted to

be imported or exported have been complied with" Here, I refer to

judgment of Hon'ble Supreme Court of India In case of Om Prakash

Bhatia V/s Commissioner of Customs, Delhi 2003(155)E.LT. 423

(SC):

From the aforesaid definition, it can be stated that:

(a) if there is any prohibition of import or export of goods under the

Act or any other law for the time being in force, it would be

considered to be prohibited goods, and (b) this would not include

any such goods in respect of which the conditions, subject to which

the goods are imported or exported, have been complied with. This

would mean that if the conditions prescribed for import or

export of goods are not complied with, it would be

considered to be prohibited goods. This would also be clear

from Section 11 which empowers the Central Government to

prohibit either 'absolutely' or 'subject to such condition' to be

fulfilled before or after clearance, as may be specified in the

notification, the import or export of the goods of any specified

description. The notification can be issued for the purpose specified

in the sub-section (2). Hence, prohibition of importation or


164 exportation could be subject to certain prescribed conditions to be

fulfilled before or after clearance of goods. If conditions are not

fulfilled, it may amount to prohibited goods.

22. The Adjudicating Authority in the instant case vide his

Adjudication Order No. 23/2015 dated 02.03.2015 has ordered as:

l. order for absolute confiscation of the 4320 grams foreign origin

gold valued at Rs. 1,09,12,590/- ( Rupees One crore nine lakhs

twelve thousand five hundred and ninety only) under Section 111(d)

of the Customs Act, 1962

II. I order for absolute confiscation of 10 Indian Currency notes in

the denomination of Rs. 500/- with force value of Rs. 5000A under

Section 111(d) of the Customs Act, 1962.

III. I order for absolute confiscation of old white cloth, one pair of

socks & shoes valued at Nil used for concealing the said gold ,

under Section 119 of the Customs Act, 1962.

IV. I impose a penalty of Rs.25,00,000/-( Rupees Twenty Five Lakhs

only) upon Shri Dipak Bajaj under Section 112 of the Customs Act,

1962.

23. It is seen from records of the case that the Applicant was

intercepted by the officials of SSB at Sonauli on 02.04.2014 and

gold in different forms totally weighing 4320 gms of 3rd country

origin (U.K.) valued at Rs. 1,09,12,590/- and Indian currency of

Rs.5,000/- was recovered from the pockets of his jacket/coat and


165 pants, underwear and socks. The officers of SSB, Sonauli handed

over the recovered gold to the officers of LCS Sonauli on

03.04.2014. On reasonable belief that the said recovered gold was

being smuggled into India from U.K. via Nepal contravening the

provisions of Notification No.09/1996-Cus dated 22.01.1996 issued

under section 11 of the Customs act, 1962 and thus liable for

confiscation under Sections 111 & 119 of the Customs Act, 1962,

the officers of LCS Sonauli seized the said gold and Indian currency

of Rs.5,000/-, old white cloth, one pair of socks and shoes under

Section 110 of the Customs Act, 1962 and the Applicant was

arrested under Section 104 of the Customs Act, 1962 by the order

of the Competent Authority on 04.04.2014. Thereafter,

Adjudicating Authority vide O-in-O No.23/2015 dated

02.03.2015 confirmed the charges leveled against the

Applicant and the gold, under seizure, was confiscated

absolutely without giving option to redeem as import of

third country origin gold, in any manner, from Nepal is

prohibited by Government of India under Notification

No.09/1996-Cus dated 22.01.1996 issued under section 11 of

the Customs Act, 1962 as amended and also imposed a personal

penalty upon the Applicant. The Notification No.09/96 dated

22.01.1996 is as under :-

"In exercise of the powers conferred by sub-section(l) of

Section 11 of the Customs Act, 1962 (52 of 1962) and in


166 supersession of the Notification No.76/F.No.80/83/65-LCI,

dated the 19m June, 1965, published in the Gazette of India

vie No.GSR 848, dated the 191h June, 1965, the Central

Government being satisfied that for the prevention of

smuggling, it is necessary so to do, hereby prohibits the

import from Nepal to India of goods which have been

exported to Nepal from countries other than India :

Provided that machinery and equipment used in Nepal for the

execution of a project may be allowed to be imported into India

from Nepal after completion of the project subject to the following

conditions, namely :-

(i) The importer produced a certificate from the Indian Embassy,

Kathmandu, that the machinery and equipment have in fact been

used for a period of one year for the execution of the project in

Nepal;

(ii) The project has been financed by an Agency of the United

Nations or the International Bank for Reconstruction and

Development Association or the Asian Development Bank or any

other multilateral agency or the Government of India; and

(iii) The importer had obtained the permission from the Reserve

Bank of India for import of the machinery and equipment into Nepal

for taking up work in the project in Nepal, if so required."


167 24. In view of above it is settled law that Import of 3rd country

origin gold from Nepal, is prohibited vide Notification No.09/96-Cus

dated 22.01.1996. Gold falls under Chapter 71 of the first schedule

to the Customs Tariff Act, 1975 and Chapter Note 4A defines the

expression "precious metal" means silver .gold and platinum. Policy

Circular No. 77(RE-008)/2004-2009 dated 31.03.2009 by DGFT

provides list of agencies/entities which are authorized to import

gold. In addition to this list, designated Banks notified by RBI are

also entitled to import gold. Para 1 of Notification No.106/2009-

Customs dated 14.09.2009 issued by the Government of India

amending Notification No.94/96-Customs dated 16.12.1996 provides

the list of'' Nominated agencies" for the purpose of import of gold.

Para 1 of the said Notification reads "In the said Notification, in the

Explanation (i) for clause (b), the following clauses shall be

substituted, namely :-

(b) Foreign Trade Policy means Foreign Trade Policy 2009-2014

notified by the

Government of India in the ministry of Commerce & Industry

published in the Gazette of

India , Extraordinary , Part-ll, Section 3, Subsection (ii) vide

Notification No. 01/2009-

2014 dated27.08.2009, as amended from time to time.

(ii) for clause (c), the following clause shall be substituted, namely

"(c) "Nominated agencies" means,-


168 (1)Metals and Minerals Trading Corporation Limited (MMTC);

(2)Handicraft and Handloom Export Corporation (HHEC);

(3)State Trading Corporation (STC);

(4)Project and Equipment Corporation of India Ltd. (PEC);

(5)STCL Ltd;

(6)MSTC Ltd;

(7)Diamond India Limited (DIL);

(8)Gems & Jewellery Export Promotion Council(G&J EPC);

(9)a Star Trading House (only for Gems and Jewellery sector) or a

Premier Trading House under paragraph 3.10.2 of Foreign Trade

Policy; and any other agency authorised by Reserve Bank of India

(RBI)."

25. In terms of ITC(HS) Classification on import items under FTP

2009-2014 , import of gold is subjected to RBI Regulations. Circular

No. 15 dated22.07.2013 and Circular No. 25 dated24.08.2013

issued vide RBI/2013-14/148 AP(DIR Series ) regulate import of

gold into India. RBI regulations also endorse the list of nominated

agencies for the purpose of import of precious metal eg gold. DGFT

vide their Notification No.69(RE-2013)/2009-2014 dated19.02.2014

have provided continuity to the FTP 2009-2014 by extending the

FTP 2009-2014 till further order even after 31.03.2014. Therefore,

FTP 2009-2014 was in vogue at the time of detection and seizure of

the contraband in the instant case.


169 26. The FTP was in vogue at the time of detection and seizure of

the smuggled gold in the instant case. The foregoing makes it amply

clear that the Government has imposed certain restrictions/control

by way of regulating import of gold for use in domestic sector.

Hon'ble Supreme Court of India in case of Om Prakash Bhatia vs.

Commissioner of Customs, Delhi 2003 (155 ELT 423 (SC) has held in

para, inter-alia as follows:

". Hence,, prohibition of importation or exportation could be

subject to certain prescribed conditions to be fulfilled before or after

clearance of goods. If conditions are not fulfilled, it may

amount to prohibited goods. This is also made clear by this

court in Sheikh Mohd. Omer Vs. Collector of Customs, Calcutta &

Others [(1970)2 SCE 728)}. "

The Court held thus :

' What clause (d) of Section 111 says is that any goods which

are imported or attempted to be imported contrary to "any

prohibition imposed by any law for the time being in force in this

country" is liable to be confiscated, "Any prohibition" referred to

in that section applies to every type of "prohibition". That

prohibition may be complete or partial. Any restriction on import

or export is to an extent a prohibition. The expression "any

prohibition" in Section 111(d) of the Customs Act, 1962 includes

restrictions. Merely because Section 3 of the Imports and Exports


170 (Control) Act, 1947, uses throe different expressions

"prohibiting", restricting" or "otherwise controlling", we

cannot cut down the amplitude of the word "any prohibition" in

Section 111(d) of the Act. "Any prohibition" means every

prohibition. In other words all types of prohibitions. Restrictions

is one type of prohibition.

The instant case, is fully covered by aforesaid judgement of Apex

Court. Therefore, gold in terms of ITC (HS) classification of Export &

Import of the Foreign Trade Policy being subject to RBI regulations

falls under prohibited category of goods for import in view of the

aforesaid judgment of the Apex court in case of Om Prakash Bhatia

Vs. Commissioner of Customs 2003(155) ELT423.

As Mr. Dipak Bajaj does not belong to any of the nominated

agencies/entities etc. figured in the list provided in the policy

Circular of DGFT, so he is not entitled to import gold into India in

terms of FTP and import of gold by him in view of judgment of Apex

Court in Om Prakash Bhatia case supra falls under prohibited goods

in terms of ITC (HS) Classification of Export & Import of the Foreign

Trade policy. The Hon'ble Madras High Court has also taken the

same view in their order dated 23.08.2016 in case of Commissioner

of Customs (Air) vs. P. Sinnasamy.

It is admitted fact that the impugned gold weighing 4320 gms.

Valued at Rs.1,09,12,590/- was goods of third country origin and

the Applicant was caught red handed while smuggling gold into


171 India from Nepal, therefore, impugned gold is prohibited goods in

terms of the express provisions of Notification No. 9/96-cus dated

22.01.1996 and ITC (HS) Classification of Export & Import of the

Foreign Trade policy.

Hon'ble Madras High Court in the case of Aiyakanny Vs. Joint

Commissioner of Customs on 2 March, 2012 in para 7 held interalia

as under:

". Applying the ratio of the Judgment in the case of Om Prakash

Bhatia Vs. Commissioner of Customs, Delhi, reported in 2003(6)

S.C.C.161, to the facts of the case, we find that, in the present case,

the assessee did not fulfil the basic eligibility criteria, which makes

the imported item prohibited goods "

Hon'ble Bombay High Court in the case of Ramdas Bhikaji Satpute

vs. joint Commissioner -2016(332) E.L.T.A86 (Bom.) has held

interalia as under:

" in the absence of any other evidence showing licit

procurement of gold the inescapable conclusion is that the gold is

smuggled. Under the circumstances the goods have to be held as

"prohibited goods". "

27. The Apex Court in the case of Om Prakash Bhatia Vs.

Commissioner of Customs [2003(155)E.L.T 423] has held that:


172 " Merely because Section 3 of the Imports and Export (Control)

Act, 1947, uses three different expressions "prohibiting",

"restricting" or "otherwise controlling", we cannot cut down the

amplitude of the word "any prohibition" in Section 111(d) of the Act.

"Any prohibition" means every prohibition. In other words

all types of prohibitions. Restriction is one type of

prohibition"

28. I find that the ratio of above judgements of Apex Court is

squarely applicable in the instant case. In view of above, 1 find that

import of gold in commercial quantity beyond the purview of

regulations laid down by RBI duly endorsed by Ministry of

Commerce through Policy Circular of DGFT as well as by Notification

of Ministry of Finance is "prohibited". I, therefore, hold that gold in

terms of ITC(HS) classification of Export & Import of the foreign

Trade Policy being subject to RBI regulations falls under prohibited

category of goods for import, in the instant case.

29. Here it is pertinent to refer to the relevant provisions of law

relating to Compounding as under :-

Section 137(3) of Customs Act, 1962 reads as follows :-

“Any offence under this Chapter may, either before or after the

institution of prosecution, be compounded by the Chief

Commissioner of Customs on payment, by the person accused of

the offence to the Central Government, of such compounding


173 amount and in such manner of compounding as may be specified by

rules. Provided that nothing contained in this sub-section shall

apply to-

(a) a person who has been allowed to compound once in respect

of any offence under sections 135 and 135A;

(b) a person who has been accused of committing an offence

under this Act which is also an offence under any of the following

Acts, namely:—

(i) the Narcotic Drugs and Psychotropic Substances Act, 1985 (61

of 1985);

(ii) the Chemical Weapons Convention Act, 2000 (34 of 2000);

(Hi) the Arms Act, 1959 (54 of 1959);

(iv) the Wild Life (Protection) Act, 1972 (53 of 1972);

(c) a person involved in smuggling of goods falling under any of

the following, namely;-

(i) goods specified in the list of Special Chemicals, Organisms,

Materials, Equipment and Technology in Appendix 3 to Schedule 2

(Export Policy) of ITC (HS) Classification of Export and Import Items

of the Foreign Trade Policy, as amended from time to time, issued

under section 5 of the Foreign Trade (Development and Regulation)

Act, 1992 (22 of 1992);

(ii) goods which are specified as prohibited items for

import and export in the ITC (HS) Classification of Export


174 and Import Items of the Foreign Trade Policy, as amended

from time to time, issued under section 5 of the Foreign

Trade (Development and Regulation) Act, 1992 (22 of

1992);

(iii) any other goods or documents, which are likely to affect friendly

relations with a foreign State or are derogatory to national honour;

(d) a person who has been allowed to compound once in respect

of any offence under this Chapter for goods of value exceeding

rupees one crore;

(d) a person who has been convicted under this Act on or after

the 30th day of December, 2005.

30. In view of discussion and analysis in preceding paragraphs,

the gold under seizure, proved to be of 3rd country origin and

accordingly absolutely confiscated has been proved to be

"Prohibited Goods" as held in judgment of Hon'ble Supreme Court of

India in case of Om Prakash Bhatia V/s Commissioner of Customs,

Delhi 2003(155)E.L.T. 423 (SC). Section 137(3)(c)(ii) of the

Customs Act, 1962 clearly states that nothing contained in this sub-

section shall apply to a person involved in smuggling of "Goods

which are specified as prohibited items for import and export in the

ITC(HS) Classification of Export and Import Items of the Foreign

Trade Policy, as amended from time to time, issued under section 5

of the Foreign Trade (Development and Regulation) act, 1992".


175 The foregoing discussion undisputedly establishes that the

recovered, seized and consequently confiscated 3rd country origin

gold in the instant case pertains to category of "Prohibited goods"

for import into India. Smuggling involvement of the Applicant has

also been conclusively proved in the O-in-0 No.23/2015

dated02.03.2015. Hence, it is held that the application filed by the

Applicant Mr. Dipak Bajaj does not merit consideration in terms of

Section 137(3) (c) (ii) of the Customs Act, 1962, read with Rule 4 of

the Customs (Compounding of Offences) Rules, 2005 therefore

liable to be rejected.

Here, I refer to judgment of Hon'ble Supreme Court which dismissed

the petition filed by Samynathan Murugesan [2010(254)ELT A15]

applying the ratio of judgement of Om Prakash Bhatia Vs

Commissioner of Customs [2003(155)E.L.T 423]. While dismissing

the petition the Supreme Court passed the following order:

"Applying the ratio of the judgment in the case of Om Prakash

Bhatia V Commissioner of Customs, Delhi, reported, in 2003 (155)

E.L.T. 423 (S.C.) = 2003 (6) S.C.C 161, to the fact of the case, we

find that, in the present case, the assessee did not fulfil the

basic eligibility criteria, which make the imported item a

prohibited good; hence, we see no reason to interfere with the

impugned order. The special leave petition is, accordingly,

dismissed".


176 The instant case is fully covered by aforesaid judgment of Hon'ble

Supreme Court.

31. Without prejudice to above, CBEC has recently issued Circular

No.46/2016 dated 04.10.2016 amending the Circular No.27/2015

dated 23.10.2015, the para 6 of the existing guidelines shall be

substituted as follows:-

"Normally, prosecution may be launched immediately on completion

of proceedings. However, prosecution in respect of cases involving

offences relating to items i.e. Gold, FICN, arms, ammunition and

explosives, antiques, art treasures, Wild life items and endangered

species of flora and fauna may preferably be launched immediately

after issuances of Show Cause Notice."

Vide Circular No.46/2016 dated 04.10.2016 it is clearly established

that the accused committing an offence of illegal importation of gold

of 3rd country origin, from Nepal, is at par with the offence

committed under the provisions of various Acts, mentioned in the

Section 137 (3)(b) of the Customs Act, 1962, in which the

compounding of offences shall not apply. Hence, the application for

compounding of offence, filed by the Applicant, deserves rejection.

32. The said Circular No. 46/2016 dated 04.10.16 issued

amending the Circular No. 27/2015 dt. 23.10.2015 advises

launching of prosecution immediately after issuance of Show Cause

Notice in the respective case pertaining to commodities enlisted in


177 the said Circular. In Compliance with the intention and the spirit of

the said Circular, an Addendum to Show Cause Notice dated

04.10.2014 was issued on 17.10.2016 as Gold prominently figures

as the very first commodity in the list appended with the circular No.

46/2016 dated 04.10.2016. This indicates the gravity of smuggling

of gold in the eyes of law makers of this country. Gold smuggling is

highly pernicious to economy of the nation as it encourages hawala

transactions, draining the wealth of nation and leaving deep scar on

resources of national economy. In an attempt to arrest this trend,

Government intends to prosecute such unscrupulous persons as

early as possible and as much as lawfully feasible to ensure that the

message percolates down across the fraternity of gold smugglers

and the feeling of fear of prosecution could work as deterrent to

such unscrupulous activities. The said addendum has been issued

considering "the true spirit" of Government of India portrayed in the

circular No. 46/2016 dt. 04.10.2016. Under the scenario, I find

application in the instant case is against Board's Circular dated

04.10.2016 and defeats the very purpose of the policy presently

being pursued by Government against gold smuggling.

33. I further find that Applicant has relied heavily upon Circular

No.54/2005-Cus dated 31.12.2005 in his reply and submissions to

Show Cause Notice and Addendum. It is relevant to point out here

that said Circular No.54/2005-Cus dated 30.12.2005 does not exist

as on date and has been superseded by CBEC Circular No.29/2009-


178 Cus dated 15.10.2009. Para 2 of Circular No.29/2009-Cus dated

15.10.2009 reads as under :-

"The High Court of Bombay in their Order dated 25.10.2007

passed in W.P. No. 1884 of 2007 held that there is no power

conferred to interfere with the statutory power of the Chief

Commissioner of Customs for compounding of offences under

section 137(3) of the customs Act 1962 . Hence the guidelines

issued by the board, vide Circular No.54/2005 Cus dated

30.12.2005, classifying offences as 'technical' and

'substantive', allowing substantive offences to be

compounded only once and excluding certain cases from

the purview of the compounding were held by the Court to

be ultravires to Customs Act, 1962 and Rules made

thereunder"

In view of the above, submissions of Applicant based on non-

existent Circular are unsustainable including submission on the

grounds of time limits, also because there is no statutory time limit

prescribed for disposal of Application of Compounding of Offence in

the Act or Rules.

34. In addition to that, rule 4(7) of Customs (Compounding of

Offence) Rules, 2005 as amended makes it categorically clear that:

"The Applicant cannot claim, as a right, that his offence shall be

compounded."


179 Therefore, Applicant's claim that "Compounding must be considered

positively" is beyond purview of provision of law as stated above. In

view of the contravention of Notification No.9/96 dated 22.01.1996

read with Section 137(3)(c)(ii) of the Customs Act, 1962 by the

Applicant as stated above, his application for compounding of

offence is liable for rejection.

35. The Applicant had not submitted the reply to the addendum to

show cause notice in stipulated period, even after issuance of three

reminders vide this office letters dated 17.11.2016, 24.11.2016 and

third and last reminder dated 06.12.2016 and he submitted the

reply only on 27.12.2016 at the time of personal hearing. The

Applicant has filed the reply to the addendum dated 17.10.2016 on

27.12.2016 i.e. after more than 2 months. Therefore, it appears that

the Applicant is knowingly delaying the proceedings of compounding

pending before the Chief Commissioner, Customs (Prev.) Zone,

Patna, so as to avoid the rosecution proceedings before the Court,

yet raising issue of time limit in disposal of the application, thereby

contradicting their own act of more than 2 months delay in

submission of reply as well as non-disclosure of vital facts of the

case from Department.

36. The Applicant has submitted that in the case of V. Shreeharan

alias Murugan vs. Union of India [2014 4 SCC 242] and Shatrughan

Chauhan vs. Union of India [2014 3 SCC 1], the Supreme Court


180 while deciding the delay in action on mercy petition has held that

the right to seek mercy under Article 72/161 of the Constitution of

India is a constitutional right and is not dependent at the discretion

and whims of the executive. I find that mercy under Article 72/161

of the Constitution of India is filed before the President of India or

Governor of any state of India against conviction / award of

punishment (life imprisonment or death sentence) by Court whereas

Compounding of offences is meant for immunity from prosecution

i.e. prior to court judgment. A court, after complete trial, in its

judgment may or may not find an accused guilty .It is pertinent to

note that the Applicant in the instant case is free on bail. Immunity

granted under compounding of offences from prosecution makes

one free from any such proceedings. Mercy Application and

Application for Compounding of Offences has no correlation and are

incomparable proceedings. Therefore, the Case Laws cited by

Applicant are distinguissible from facts and circumstances of the

instant case.

37. I find that the Apex Court in case of UOI Vs Anil Channa

[2008 (222) ELT 481SC ] has held that Compounding of Offences is

undertaken based on the Principal of Disclosure. The basic Principle

of Disclosure underlying section 137(3) read with Rule 6 of the

Customs (Compounding of Offences) Rules,2005 is that if there are

demonstrable contradictions or inconsistencies or incompleteness in

the case of the Applicant, then the application of compounding


181 cannot be entertained. Accordingly, compounding of offences may

not be allowed where there are demonstrable contradictions or

inconsistencies or incompleteness. In the instant case, the Applicant

filed application dated 25.01.2016 for Compounding of Offences

without mentioning whether he has already filed appeal or intends

to file an appeal before CESTAT. The Applicant has concealed these

important facts from the department and knowingly violated the

Principle of Disclosure laid down by the Apex Court in case of UOI

Vs. Anil Channa 2008 (222) ELT 481 SC]. The Applicant had ample

time with him to intimate the department but it appears that he has

deliberately avoided to inform the department. I hold that the

application of the Applicant Mr. Dipak Bajaj fails to satisfy the very

basic rule defined by the Apex Court as "the Principle of Disclosure"

and hence, I hold that the instant application filed for compounding

of offences by Mr. Dipak Bajaj does not qualify for compounding of

offences under section 137(3) of Customs Act, 1962 read with Rule

6 of the Customs (Compounding of Offences) Rules, 2005.

38. The Applicant has filed for immunity from prosecution on one

hand by soliciting compounding of offences and on other hand, he is

contesting the Order-in-Original No.23/2015 dated 02.03.2015

before CESTAT which for all practical purposes, he had accepted in

principle while filing the application for Compounding of Offences

under the Customs (Compounding of Offences) Rules, 2005, thereby

contradicting his own stand.


182 39. Further, Inputs received by the Reporting Authority suggest

indirect indulgence on part of the Applicant in smuggling activities.

All enforcement agencies have their intelligence and information

network. No documentary evidence, in general, may be available in

respect of receipt of such inputs. However, such inputs are very

helpful in forming strategy for anti- smuggling operations. This

intelligence assumes significance in view of Applicant using two

names "Dipak Bajaj" & Deepak Bajaj" and not disclosing the same in

his instant application and further in view of fact of DRI having

booked two cases against Deepak Bajaj.

Here I refer to Judgment of Hon'ble Supreme Court in the case of

UOI Vs. Anil Channa 2008 (222) ELT481 SC held that:

Compounding of offence is based on the principle of Disclosure

in ases of compounding of offences it would be the duty of

the Compounding Authority to find out existence of

material, outside the evidence, which suggests that

disclosure is inaccurate, misleading or incomplete,

particularly, when there are contradictions in the stand

taken by the applicant.

40. The Applicant was caught red handed while smuggling huge

quantity of 3rd country origin gold worth more than Rupees One

Crores into India from Nepal is a proven fact. He was in jail and is

presently on bail. Shri Dipak Bajaj filed an application before the


183 Hon'ble Spl. CJM, Varanasi for release of his seized passport, but the

Hon'ble Spl. CJM, Varanasi vide his order dated 05.05.2015 has

ordered that since Applicant is foreign national, therefore, if he is

allowed to go outside India, his presence could not be ensured in

future during trial. He appealed against the said order before the

Hon'ble Spl. Session Judge Varanasi but the Hon'ble Spl. Session

Judge Varanasi vide order dated 22.08.2015 dismissed the appeal of

the Applicant and upheld the order of the Spl. CJM. Appeal of the

Applicant against the order of the Spl. Session Judge has also been

rejected by the Hon'ble High Court, Allahabad vide order dated

15.10.2015 and directed the Applicant for filing petition under

section 482 of the Criminal Procedure Code. Further, the Applicant

filed application before Hon'ble High Court, Allahabad under section

482 of Cr.P.C. Accordingly, Hon'ble High Court, Allahabad vide his

order dated 22.12.2015 :

"Considering the facts of the case, with expressing any opinion on

the merits of the Applicant's case, this application U/s 482 Cr.P.C. is

finally disposed off with a direction to the court below to decide

Case No. 1 of 2014, under Section 104/135 Customs Act, P.S. Sima

Sulk Sonauli, District Maharajganj in accordance with law without

granting unnecessary adjournments to either of the parties

as expeditiously as possible preferably within a period of six

months from the date of production of certified copy of this

order, if there is no legal impediment."


184 Applicant has failed to disclose these vital facts to the Department.

These facts have come to knowledge only after antecedent

verification of Applicant by Reporting Authority. Nondisclosure of

these facts assume serious implications in view of fact of Applicant

using two names and not disclosing the same in his subject

application, which is evidence of demonstrable contradictions,

incompleteness & inconsistencies in case of Applicant therefore his

application for Compounding cannot be entertained.

41. Further, Director General, DRl, New Delhi on being reminded

vide this office letter dated 19.09.2016 to intimate information

about the Applicant, required under Section 137 (3) Of the Customs

Act, 1962, the Assistant Director (G.I.), DRl, New Delhi vide his

letter dated 07.10.2016 informed that two cases were booked by

the DRl, Mumbai Zonal Unit against one Shri Deepak Bajaj, R/o 6-B,

Devashish, Peddar Road, Mumbai, which have raised doubt whether

both the Deepak Bajaj are same. Further the Assistant Director

(G.I.), DRl, New Delhi vide his letter dated 24.10.2016 requested to

the Deputy Director, DRl, Zonal Unit, Mumbai about the verification

of the Applicant with the Deepak Bajaj against whom DRl, Mumbai

Zonal Unit booked the cases. Vide^letter dated 11.11.2016 this

office had also requested to the Deputy Director, DRl, Zonal Unit,

Mumbai about verification of the Applicant. The Deputy Director,

DRl, Zonal Unit, Mumbai vide his letter dated 23.11.2016 had

forwarded a copy of personal data & financial profile of Shri Deepak


185 Bajaj against whom DRl, Mumbai Zonal Unit booked the cases. As

pointed out in Para 4 & 7, name of Applicant in High Court orders

dated 15.10.2015 & 22.12.2015 is mentioned as "Deepak Bajaj" and

not as "Dipak Bajaj" which raises doubts about intention of

Applicant using two names in proceedings for reasons best known

to him, and fact not disclosed by Applicant in his subject application,

which is evidence of demonstrable contradictions, incompleteness &

inconsistencies in case of Applicant therefore his application for

Compounding cannot be entertained.

42. In view of above, it is established that the Applicant has failed

to disclose all the material facts in his application filed for

compounding of offence before the Compounding Authority.

Disclosure has been found to be inaccurate and incomplete.

Applicant has not been candid in placing of materials and facts

before Compounding Authority.

Here I refer to judgment of Hon'ble Supreme Court in the case of

UOI Vs Anil Channa (2008) (222 ELT481 SC) wherein the Hon'ble

Supreme Court has held that:

Application for compounding ought to be disallowed if there are

such contradictions, inconsistencies or incompleteness. The reason

is obvious. If the applicant is trying to hoodwink the

Authority such application would not be maintainable. That

aspect is required to be kept in mind by the Compounding Authority.


186 The test is as follow - Is the applicant candid in the matter

of placing of materials and facts before the Compounding

Authority without in any way trying to hoodwink the Authority to

escape his criminal liability?

The instant case is fully covered by aforesaid judgment of Hon'ble

Supreme Court.

43. To conclude with, it is admitted fact that impugned gold

weighing 4.320 Kgs valued Rs. 1,09,12,590/- was goods of 3rd

country origin and was smuggled from Nepal to India. Therefore,

impugned absolutely confiscated gold is prohibited goods in terms of

Section

137(3)(c)(ii) of Customs, Act, 1962. Here, I refer to following

judgments :

Hon'ble Madras High Court in para 7 in the case of Aiyakannu vs.

Joint Commissioner of Customs on 2nd March 2012 held inter alia as

under:

" ................. Applying the ratio of the judgment in the case of Om

Prakash Bhatia vs. Commission of Customs, Delhi, reported in

2003(6) S.C.C. 161, to the facts of the case, we find that, in the

present case, the assesse did not fulfill the basic eligibility criteria,

which makes the imported item a prohibited goods "


187 Hon'ble Bombay High Court in the case of Ramdas Bhikaji Satpute

vs Joint Commissioner- 2016 (332) E.L.T. A 86 ( Bom) has held inter

alia under:

" in the absence of any other evidence showing licit

procurement of gold the inescapable conclusion is that the gold is

smuggled. Under the circumstances the goods have to be held as

"Prohibited goods "

44. In view of discussions and findings in the foregoing

paragraphs, it is conclusively established that the "smuggled gold"

recovered and seized from the possession of the Applicant are

"prohibited goods" as has been held by the Hon'ble Apex Court in

case of M/s Om Prakash Bhatia Vs. Commissioner of Customs Delhi

2003(155)E.L.T. 423 (SC). The Applicant has not made full

disclosure in respect of the instant case as has been held to be

basic Principle of Disclosure underlying Section 137(3) of the

Customs Act,1962 by the Apex Court in UOI Vs. Anil Channa

2008(222) ELT481 (SC). Therefore, the offence committed by the

Applicant in respect of aforesaid "prohibited goods" does not fall

within the purview of Compounding of Offences under Section

137(3) of the Customs Act, 1962 read with sub-rule 3 of Rule 4 of

the Customs (Compounding of offences) Rules, 2005. Accordingly,

the application filed by Mr. Dipak Bajaj is liable to be rejected.


188 ORDER

45. In view of aforesaid facts and circumstances of the case and

aforesaid judgments of Hon'ble Supreme Court cited above, I reject

the application dated 25.01.2016 filed by Applicant under Section

137(3) of Customs Act, 1962 read with sub-rule 3 of Rule 4 of the

Customs (Compounding of Offences) Rules, 2005, as amended.

(Sheo Narayan Singh)

Compounding Authority

Chief Commissioner of Customs (Prev.) Zone, Patna

C.No. Vlll(48)09-Compounding of offence/CCO/CUS/T/2016/120

Dated:16.01.2017

Copy to:-

1. Shri Dipak Bajaj, S/o Late Awat Ram Bajaj, H.No.12, 6-Flaxely

Road, Modern, SM46 LJ, London (U.K.)

2. Shri Vimal Chaudhary, Consultant, New Tax Vision, Buddha

Plaza, Buddha Marg, Patna-800001.

3. The Member Customs (Eastern Zone), CBEC, North Block, New

Delhi.

4. All Chief Commissioner of Customs Preventive/Central

Excise/Service Tax.

5. The commissioner of Customs (Prev.) Lucknow.

Assistant Commissioner

Customs (Prev.) Zone Patna

//True Copy//


189 ANNEXURE-P18

Court of Special Chief Judicial Magistrate, Varanasi

Presiding Officer –Umakant Jindal, U.P.J.S.

Criminal Complaint Case No. 765 of 2014

Union of India

Through Asstt. Commissioner, Custom, Sonauli, District Mahrajganj.

… Complainant

Versus

Deepak Bajaj son of late Awatram Bajaj, resident of House No.2, 6

Flaxy Road, Modern SM 5 6 L.J. London (U.K.).

… Accused

Section 135(1)((i) Customs Act, 1962

Judgment

On behalf of Union of India, the present complaint has be filed

by complainant Brijender Chaudhary, Assistant Commissioner, Land

Custom Station, Sonauli against accused Deepak Bajaj under section

135(1)(i) Customs Act 1962.

The prosecution case, in brief, is that at present complainant

has been posted in Land Custom Station, Sonauli, District

Mahrajganj as Assistant Commissioner and happens to be a public

servant and is filing the present complaint in discharging his official

duties. Before filing this complaint, necessary approval under

section 137(1), Customs Act,1962 had been obtained from


190 Commissioner of Customs, Lucknow on 21.05.2014l during the

course of checking on 02.04.2014 at 20.30 Hrs. offices of Border

Security Force/S.S.K. Sonauli restrained one person and during

search of the said person, one gold biscuit wrapped in white clothe

was recovered from pocket inside his jacket, second gold biscuit

hidden in backside pocket of pantaloon and few small gold made

granuals etc. which had been packed in a polythene, were

recovered from his waist and few gold coins were recovered from

his shoes. Thereafter, the said accused was brought at Campus of

S.S.B. Sonauali for preliminary investigation . S.S.. weight

recovered gold on which it established at 4320gms. The above-said

recovered gold was tested and weighed through Messrs. Tanish

Jewelers, Nautanwa market. Purity of gold biscuit established at

999.9 percent and purity of gold coins established at 70% and

purity of small gold granuals established at 99.850 percent.

Messrs. Tanish Jewelers found the estimated value of the said

gold at Rs.1,09,12,590/-. During personal Jamatalashi of the

above-said accused Deepak Bajaj, SSB Officers recovered 10 Indian

currency notes of Rs.500/- denominations, which were handed over

to Custom Officers. On 03.04.2014 SSB Officers handed over the

said recovered gold, Indian currency and other recovered articles

alongwith accused Deepak Bajaj to officers of Land Custom Station,

Sonauli. Thereafter, officers of Custom Department called two

independent witnesses S/Shri Vijay Madhesiya & Sir Randhir Singh


191 for witnessing the proceedings. In the presence of both

independent witnesses, officers of Custom Department called local

Goldsmith Shri Vinod Kumar, Messrs. Tanishk Jewelers, Nautanwa

market for weighing recovered gold and for testing purity. After

carrying out weight of gold, weight of biscuit of gold 1000 gms,

second gold biscuit 500 gms, 58 gold coins 1964 gms and small gold

granuals were found 856 gms. The purity and price of the said

recovered gold was found the same which the said goldsmith had

told to S.S.B. Officers. When he was shown Test/Authenticity

Certificate produced by Officers of S.S.B., then while identifying the

said Test Certificate. He averred that the report which he issued

to S.S.B. Officers on letter head on 03.04.2014 the same is correct.

During the course of inquiries made from accused, on 04.04.2014

statement of accused was recorded under section 108, Custom

Act, wherein, he admitted that gold recovered from his possession

was being brought from London he had purchased the said gold

from Gold Bullion of U.K. He further recorded in his statement

that he did not make any declaration of recovered gold on arriving

at the Kathmandu Airport. He admitted this fact also that he

knows that Non-Indian is not allowed to bring gold in India from

abroad. After having believed of this fact that foreign gold

recovered was being brought in India from Nepal by way of

smuggling which is violation of Notification No.09/1996 CUS dated

22.01.1996 and other articles recovered is violation of various


192 notifications & regulations. The above-said gold and all the above-

stated articles were seized under section 111, Custom Act and

other articles which were used in hiding gold in which old cloth,

shoes, socks were seized under Section 110, Custom Act and

Panchnama in this context was prepared on 03.04.2014 in the

presence of two independent witnesses. Officers prepared Memo of

Recovery-cum-Panchnama and the said Panchnama was signed by

offices, accused and two independent witnesses. Recovered gold,

Indian currency and other articles were seal-packed in three

individual packets on which accused, officers and witnesses put

their respective signatures. On 04.04.2014 statement of accused

Deepak Bajaj was recorded under section 108, Custom Act,

wherein, he admitted the whole sequence of occurrence and

revealed the fact of bringing the said gold to New Delhi via Nepal

having purchased from U.K. He further admitted that he knows

that bringing gold in India from U.K. via Nepal is not permitted.

Thereafter on 04.04.2014 accused Deepak Bajaj was t taken under

arrest under section 104, Custom Act and was sent to District Jail,

Varanasi. On the basis of above-stated grounds complainant

prayed for sentencing accused Deepak Bajaj under section 135(1)(i)

Custom Act.

Fining sufficient grounds available for taking cognizance

against accused under section 135, Custom Act, on 27.05.2014


193 court framed charge, cognizance was taken and having registered

criminal case, accused was summoned from jail on which accused

appeared in court.

Thereafter, under section 244 Cr.P.C. PW- 1 Kalpnath Rai,

Inspector, Custom Department Sonauli was examined on behalf of

prosecution, on the basis of the same, on 03.03.2017 charge was

framed under section 135, Custom Act, against accused Deepak

Bajaj. Accused denied the charge & claimed trial.

On behalf of prosecution in documentary evidence photocopy

of seizure memo dated 03.04.2014 Ex. P-21, photocopy of memo of

arrest Ex.P-2, caption of gold seized dated 02.04.2014 Ex.P-3,

photocopy of Memo of Recovery dated 03.04.2014 Ex. P-4,

photocopy of three receipts/Estimate Slips dated 03.04.2014 issued

by Tanish Jewelers, Opposite P.W.D., Thuthi Chowraha, Nau9tanwa

as Ex.P-5, 6 and 7, photocopy of Panchnama/memo of Recovery

dated 03.04.2014 Ex. P-8, List of articles of Deepak Bajaj Ex P-9,

Testing & Weighing Certificate of gold issued by Vinod Kumar

Verma, Messrs. Tanish Jewelers, Nautanwa, District Mahrajganj

dated 03.04.2014 as Ex.P-10, photocopy of Bullion Invoice 31st

March, 2014 Ex.P-11, photocopy of Bullion Invoice dated 25th

February, 2014 Ex.P-12, photocopy of invoice dated 31.03.2014 Ex.

P-13, photocopy of statement of accused Deepak Bajaj dated

03.04.2014 recorded under section 107, Customs Act, Ex.P-14,


194 statement of accused Deepak Bajaj recorded on 04.04.2014 Ex.P-

15, original approval letter dated 21.05.2014 of Shri Ajay Dixit,

Commissioner of Custom Aliganj, Lucknow Ex. P-16 and original

Complaint Ex.P-17, photocopy of particulars of case article seized

Ex.P-18, true photocopy of original register of godown 2014-15 was

filed as Ex.P-19 and under section 246 cr.plc. in oral evidence

Kalpnath Rai, Inspector, Custom Department was examined as PW-

1 and N.K. Srivastava, Superintendent, Central Excise Duty

Department, Lucknow as PW- 1 and Mahattam

Superintendent/Costly Goods Godown Incharge, Customs,

Mahrajganj was examined as PW- 3.

Accused Deepak was examined under section 313 Cr.P.C. on

31.05.2017.l in his examination under section 313 Cr.P.C. accused

revealed about gold recovered that misappropriations have been

committed in quantity of gold. I have deposited custom duty Rs.

25 lakh. He stated that most of the things stated in his statement

recorded under section 108, Custom Act under illegal pressure.

With regard to evidence adduced by witnesses examined on behalf

of prosecution, he stated that he does not know anything. Case

was initiated under misconception. He further stated that he would

produce more documentary evidence. Heard written argument filed

by learned counsel for accused, oral argument and contentions


195 putforth by learned Senior Prosecution Officer and perused the

file.

On behalf of prosecution party, learned Prosecution Officer

has raised contention that they have examined three witnesses, all

those witness have supported the prosecution case fully. S.S.B.

Officers had caught accused Deepak Bajaj red-handed carrying

unauthorized gold in India via Nepal Border. According to Indian

Law, brining gold in India from any third country via Nepal is crime

and bringing gold from any third country even on satiating

payment of custom duty via Nepal is not permitted. Accused

himself has admitting carrying gold in his possession. Accused has

categorically confessed his offence in his statement under section

108, Custom Act and statement recorded under section 108,

Custom Act is entitled to be read in evidence. Accused himself has

admitted this fact in his statement under section 108, Custom Act

that he knew this fact that brining gold from any third nation via

Nepal is crime. The intentions of accused were of smuggling of

gold since inception and as such, he did not make declaration of

gold carrying with him at Kathmandu Airport at the Border of

India towards Nepal. Prosecution case has proved against accused

beyond doubt.

On perusal of file in the light of contention putforth by learned

Prosecution Officer, it reveals that on behalf of prosecution party


196 Kalpnath Rai, Inspector, Custom Department Sonauli, District

Mahrajganj has be examined as PW-1 under section 244 Cr.P.C.,

while supporting prosecution case beyond doubt, he has averred in

his cross-examination that in the month of April, 2014 he had been

posted in Custom Department, Sonauli as Inspector. On

03.04.2014 S.S.B. officers brought one accused with recovered

articles alongwith necessary documents in the Custom Office. I

called panch at once. It was 15.10 Hrs. Vijay Kumar Madhesiya and

Randhir Singh were told that officers of S.S.B. are handing over few

foreign goods and accused for which you have to remain present as

witnessing witnesses. Assayer Vinod Kumar was called for testing

and weighing. Vinod Kumar Assayer had submitted report about

total Four thousand Three Hundred twenty gram gold worth Rs. One

Crore Nine lakh Twelve thousand Five Hundred Ninety, handed

over by S.S.B.. In addition to this, foreign currency Nepali & Indian

and one mobile handset Blackberry, one passport, Nepali SIM Card

and few old clothes recovered from accused were handed over by

S.S.B. and several papers pas wee also handed over by S.S..

accused Deepak Bajaj revealed that he is a British citizen and he

had brought recovered gold having purchased from London, U.K.

He further revealed that when he was coming in India via Nepal,

the officers of S.S.B. present at Border carried out his checking on

02.04.2014 and the above-said gold was recovered. Accused

further revealed that he had not made declaration of this gold at


197 Kathmandu Airport. Thus, on having believed that recovered gold

was brought in India illegally via Nepal, which amounts to

violation of Custom Act, therefore, it was seized. Old clothes and

shoes used in hiding gold were also seized under Custom Act, all

recovered articles were seal-packed in individual packets. We

officers, panch and Deepak Bajaj put our respective signatures on

all the four packets. Panchnama was prepared on the spot. All the

original documents submitted by S.S.B. are available before me in

departmental file, copy of which are placed on record, which were

proved by witness, those were marked as Ex. P-1 to Ex. P-7.

Panchnama is available before him in original, in departmental file,

photocopy of which was placed on case file, which was proved by

witness, it was marked as Ex.P-8. Annexure with Panchnama are

available before me in original, photocopy of which are available

before him, which were proved by witness, it was marked as Ex.P-

9. Assayer Report in original is available before me in

departmental file, provided by w, on which it was marked as Ex. P-

10. Similarly wt proved the original receipts which were marked

Ex.P-1 to 13 respectively. Accused recorded his statement under

section 107, Custom Act himself in his own handwriting and out

signatures on it, his signatures appear on it. Original statement is

available before him in department file, photocopy of which is

placed on record, which was proved by witness and marked as Ex.

P-14. Thereafter, statement of accused under section 108, Custom


198 Act was recorded when he appeared before the Superintendent N.K.

Srivastava in compliance of summons issued. Before recording his

statement, he had been given to understand about the justifiability

of this statement that it may be read against him in evidence.

Thereafter, he recorded his statement voluntarily and put

signatures on it. Original statement is available before him in

department file on which signatures of N.K. Srivastava,

Superintendent appear. Witness identified his handwriting and

signatures because he happens to be his higher officer. Photocopy

of this was placed on case file which was proved by witness, it was

marked as Ex.P-15. Shri Ajay Dixit, Commissioner, Customs,

Lucknow has given necessary approval for filing complaint, original

approval is placed on case file on which signatures of

Commissioner, Ajay Dixit appear. Witness identified his

handwriting and signatures it was marked as Ex.P-16. Assistant

Commissioner Custom Sonauli Shri Brijender Chaudhary has filed

complaint under his signatures on the basis of letter of approval.

Witness identified his handwriting and signatures. His signatures

appear on complaint, it was marked as exP-17. During his cross-

examination this witness has not averred any such contradictory

fact has been extracted which would have falsified the

prosecution case or would have created suspicion on it. This

witness has averred in his cross-examination l that “I called one

party namely Vinod Kumar Verma from Nautanwa by making phone


199 call. Party tested and weighed gold in my presence. In the gold

recovered from him were 58 piece of gold coins, one Kg. and half

Kg. was in the form of biscuits/bar and 8.56 gms gold was in the

form of granuals. I had recorded statement of Deepak Bajaj under

section 107. It is wrong to suggest that accused Deepak Bajaj

would have intended to deposit duty in Custom Post at Sonauli

and earlier to that only, officers of Border Security Force would

have taken him under arrest.

Second witness on behalf of prosecution party PW- 2 N.K

Srivastava has averred while supporting the prosecution case in

his examination-in-chief that in the year 2014 he had been posed in

Custom Department Sonauli as Superintendent. On 04.04.2014 on

appearance of accused Deepak Bajaj in compliance of summons

issued under section 108, Custom Act, he had recorded his

statement of section 108, Custom Act, in my presence. After

rerecording his statement ins own handwriting he had put his

signatures on it voluntarily. On going through Ex.P-15 witness

deposed that this is the same statement recorded by accused on

which his signatures appear. During cross-examination this

witness deposed while supporting prosecution case that on

03.04.2014 at about 3.00 o’clock I was present in m office. On

04.04.2014stof Deepak Bajaj of section 108 was placed before me.

before recording statement fop accused of section 108, he was


200 given to understand that you inform your family about this fact that

the statement you are going to made, would be read against you

in evidence. He had consumed one hour in making this statement.

Accused Deepak Bajaj is resident of U.K. He was told this fact

that if you wish to deposit duty, then you may do so because no

any such provision is available in Land Custom Act. In statement

recorded under section 108, I was asking question and he used to

give reply.

Witness PW- 3 Mahattam, Superintendent/godown Incharge,

Custom Department, Nautanwa, District Mahrajganj examine on

behalf of prosecution, has deposed in his examination-in-chief that

he is carrying original inventory of the case with him and godown

register with hm. Case articles seized in this case were deposited

in my godown through Inventory memo, entry of which is lying

recorded in Godown Register at Deposit No.1/14-15/S.N.L. dated

07.04.2014. Original Inventory Memo which is attested by

Magistrate, is available before me, its photocopy is filed having

attested by witness, it was marked as E.P-18. Original register is

available before me, its photocopy duly attested by witness is filed,

it was marked as Ex.P-19. During the cross-examination

conducted from this witness under section 246 Cr.P.C. also,

defence party could not get extracted any fact contrary to

prosecution case.


201

Defence party has filed written argument on record in

defence of accused and while filing written argument, he has

argued orally also that gold stated to have been recovered from the

possession of accused, the said gold had been purchased by

accused personally from shops of U.K. In support he has placed on

record proper bills. Accused had made payment of the price of said

gold purchased, from his account. Accused is Non-Resident Indian

who had brining the said gold in India for marriage of his daughter

sothat he can get ornaments prepared from good goldsmith of India

for marriage of his daughter. Having entered in India from Nepal

Border, accused wanted to make declaration of the said gold at

Custom Office and to pay the custody duty to be levied on it, but

accused was not provided this opportunity. Before reaching at the

Office of Custom, S.S.B. Officers took accused under arrest.

Thereafter, accused requested to S.S.B. Officers several times and

later on, said to Custom Officer about it that he wants to pay the

custom duty on it having made declaration of gold which he had

been carrying with him, but the said officers put deaf ears and

challanned him forcefully. Accused has not made his statement

under Section 108, Custom Act voluntarily rather this statement

has been obtained from him forcefully and nor accused has made

any such averment in his statement that he had got knowledge of

this fact that he would have been committing any offence. Accused


202 has been implicated wrongly. No any prosecution case has proved

against accused, therefore, accused be acquitted.

On hearing and on perusal of file it comes out that first of

all, objection has been raised on behalf of defence party that he

wanted to deposit custom duty in the Custom Office about gold

carrying with him, but despite requests made by him officers of

S.S.B. and Custom Department did not provide him opportunity and

challanned him forcefully. In the opinion of the court, there is no

any legal force in this objection raised on behalf of defence party

because bring gold of any third country in India through Nepal is

not allowed and any person cannot bring gold of any third country

via Nepal even on payment any8 duty8 or tax even. Therefore,

there remains no any significance in this contention that Nepal

Border accused wanted to make declaration of gold carrying with

him under Custom Act and wanted to pay duty or tax and he was

not provided opportunity to pay such duty or tax. Vide Notification

No. 09/96 (N.T. –Custom) dated New Delhi 22nd January, 1996

issued by the Department of Revenue of Finance Ministry of Union

of India, bringing any banned article i.e. gold made in third nation in

India is banned in this connection, learned counsel for defence

parity asked question during cross-examination of PW-2, in reply he

had averred that accused Deepak Bajaj is resident of U.K. . I had

not told him this fact that if you wish to deposit duty, then you may


203 do so because no any such provision is available in Land Custom

Act meaning thereby irrespective of any person is India or Non-

Indian, cannot bring gold in India of any third country via Nepal

and provision is not available for it even to bring after satiating

duty. In such situation, while prevailing this fact too, accused

wanted to pay any duty or tax about gold carrying with him in the

Office of Custom at Nepal Border. It does not appear that accused

would have been earning any benefit out of it. This fact too is

significant here that accused Deepak Bajaj himself has admitted this

fact this gold, he had been carrying belonged to U.K., it cannot be

deemed any bonafide intention about it because neither he made

declaration of gold carrying with me at Kathmandu Airport in Nepal

and made any such type of declaration at the Check-post towards

Nepal at Indo-Nepal Border. Accused Deepak Baja himself has

admitted this fact in his statement recorded under section 108,

Custom Act that he had got knowledge of this fact that caring gold

in India from abroad via Nepal is crime. In the aforementioned

situation it is not possible to give any benefit of this fact to defence

party.

An another contention/objection has bent taken by learned

counsel for defence party in defence of accused that gold stated to

have been recovered from the possession of accused, out of those

58 recovered coins stated to have been brought by accused having


204 hiding in shoes, but no any such shoes have been produced in the

court and nor any shoes etc. have been mentioned. In such

situation, recovery shown from possession of accused becomes

suspicious, therefore, accused be acquitted. There seems to be no

any force in this contention putforth by old counsel for defence

party because accused himself has stated about recovery of gold

from his possession, he has claimed his own gold and during the

whole trial and thereafter, accused has not made this averment

in his defence that recovered gold did not belong to him. This fact

does not put any adverse effect as to how had been brining gold,

whether he was bringing gold hiding in shoes or in some other

thing, because when accused has admitted this fact before court

also alongwith his statement of section 108 Custom Act that

recovered gold belong to him and has been recovered from his

possession. Therefore, in such situation, now, there is no need to

adduce any evidence for proving this fact on the part of

prosecution. However, Panchnama Ex.P-3 available on record,

from which it is evident even old cloth, shoes used in hiding gold

had have also been seized and in regard to the facts recorded in

the said Panchnama, accused himself has put his signatures with

two independent witnesses on panchnama. The significant fact is

that accused was carrying gold of third country U.K. through

Nepal Border he was caught by S.S.B. officers and S.S.B. and

Custom Officer recovered gold from his possession.


205

Learned counsel for defence party has raised an another

contention that statement of accused recorded under section 108,

Custom Act cannot be read in evidence because the said statement

has been obtained from accused by showing him fear. This court

does not coincide with this contention of learned counsel because

on perusal of statement recorded under section 108 Custom Act

available on case file, it reveals that Deepak Bajaj himself has

recorded the said statement in his own handwriting in which he

has stated that he brought gold recovered from him in India via

Nepal Border, which had been made in U.K.; during trial in court

and during argument too, he has admitted this fact that the gold

recovered, has been recovered from him only. In such situation,

this contention does not remain with any significance that statement

of accused under section 108 would have been obtained by

terrorizing and showing fear. Hon’ble Supreme court has expressed

this opinion in his judicial citation K.I. Pawanni versus Assistant

Collector, Central Excise Collectorate 1997 (34) ACC page 512 that

where accused would have made confessional statement of his

offence before Custom Officer under section 108, Custom Act and

later on, deviates from the fact of the said admission before the

court, even then such confessional statement would be read in

evidence and accused may be convicted on the basis of the said

confessional statement because at the time of recording statement


206 under section 108, Custom Act according to the Hon’ble Supreme

Court the said person is not accused the moment he would have

been recording statement before the Custom Officer, the said

Custom Officer too does not fall under the category of Police

Officer. In such situation, defence party does not get any benefit

out of this contention also.

Learned counsel for defence party has raised any another

contention in defence of accused that on behalf of prosecution

party, witnesses to panchnama have not been examined in court.

On account of not examining witnesses to panchnama, fact of any

recovery of above-said gold etc. from accused or prosecution case

has not proved. Therefore, accused be acquitted. There seems to

be no any force in this contention of learned counsel because it is

clear here that accused Deepak Bajaj had admitted his offence

again in his statement recorded under section 108, Custom Act,

which means he his admitted the fact of bringing gold of any third

country U.K. in India via Nepal and before court also, he has

averred that the said gold belongs to him and has been recovered

from his own possession. In such situation, there remains no need

to produce independent witness or panch for evidence for proving

the panchnama. Signatures of accused Deepak Bajaj are appearing

on panchnama Ex. P-3 annexed in file and he has not made any

denial to the said signatures. In such situation, producing any


207 witness of panchnama does not put any adverse effect on

prosecution case.

With regard to other contentions raised on behalf of

prosecution party in their written argument, learned Prosecution

Officer has submitted that accused himself has admitted in his

statement recorded under section 108, Custom Act and before

court also that gold has been recorded from his possession only and

gold of any third country cannot be brought in India via Nepal even

on payment of duty or tax, hence, the said contention is not

sustainable. On due perusal of legal provision provided by the

Hon’ble Supreme Court in this context in eh matter of K.K.

Pawanni versus Assistant Collector Central Excise Collectorate, it

also comes out that according to this provision the moment

statement under section 108 Custom Act is being recorded, he does

not remain under the category of accused and custom officer

before him statement is being recorded, that custom officer too is

not covered under the category of police officer. In such situation,

if any confessional statement is made about the offence in those

statement, then the said confessional statement would be

admissible in evidence, irrespective of the same accused/person

deviates from the fact of the said confession later or avers that

the said confessional statement was obtained forcefully or

putting under fear. Here, in his statement of section 108, Custom


208 Act, accused has admitted recovery of the said gold from his

possession itself and he has admitted this fact before the court

also. Now, as far as the this contention is concerned that accused

wanted to make declaration about he said gold and to pay the duty

or tax in the Office of Custom Duty, then this wish of accused had

not got any significance because in the light of notification of the

Union of India bearing No. 09/96(N.T. –Custom) dated New Delhi

22nd January, 1996 gold made in any third country cannot be

brought in India via Nepal even on payment of tax or duty. Accused

himself has admitted this fact also in his statement recorded under

section 108, Custom Act that he had got knowledge of this fact that

this gold made in third country i.e. U.K. he is carrying in India via

Nepal, is a criminal act. Under the aforesaid facts & circumstances,

there seems to be no force in other contentions raised by learned

counsel for defence party in his written argument.

In the opinion of the court, on the basis of evidence adduced

on behalf of prosecution, charge of offence under section 135(1)(i)

Custom Act proves against accused Deepak Bajaj beyond doubt,

therefore, accused Deepak Bajaj is liable to be convicted for the

offence punishable under section 135(1)(i) Custom Act.

Accordingly, accused Deepak Bajaj is convicted for the charge

of offence punishable under section 135(1)(i) Custom Act in Criminal

Complaint Case No. 765/2014. Accused is on bail, having cancelled


209 his personal bond and surety bond, sureties are discharged from

their liabilities. Today accused is present in court he be taken in

judicial custody. Ad would be heard on the quantum of sentence.

Dated: 20.07.2017 Sd/-

(Umakant Jindal) Special Chief Judicial Magistrate

Varanasi

Heard learned counsel of convict and Senior Prosecution

Officer of Union of India on the quantum of sentence.

Learned counsel for convict has contended that accused is

Non-Indian British citizen and on account of this case, he has not

been able to meet is family & children for the last about three and

a half year. The whole business established by accused in U.K.

has absolutely ruined and he has reached at the verge of

starvation. Prayed that considering circumstances, in interest of

justice, he be punished by minimum of monetary fine.

While rebutting the above-said contention of defence party,

learned Prosecution Officer of Union of India has prayed for

punishing accused with maximum sentence.

On hearing on the quantum of sentence and perusal of file

keeping in mind the circumstance that accused is Non-Indian British

citizen, on account of seizing his passport in this case, he has not

been able to meet is family for the last more than three years.

Pashas not revealed any other criminal history or conviction of

accused in any case. Therefore, keeping in view the facts &

circumstances of the case, sentencing accused Deepak Bajaj with

simple imprisonment of one year and fine of Rs. 75,000/- (Seventy


210 five thousand only) under section 135(1)(i) Custom Act seems to be

justifiable.

Order

While holding accused Deepak Bajaj guilty under

secton135(1)(i) Custom Act,1962 in Criminal Complaint No.

765/2014, accused Deepak Bajaj is sentenced to undergo one year

simple imprisonment and fine of Rs. 75,000/- (Seventy five

thousand). In case of default in payment of fine, accused would

have to undergo three months additional imprisonment. Period

spent by accused in jail, if any, would be adjusted out of the

sentence of simple imprisonment imposed under section 428 Cr.P.C.

Having prepared sentence warrant of accused be sent in District Jail

for undergoing sentence.

Dated: 20.07.2017 Sd/- (Umakant Jindal)

Special Chief Judicial Magistrate

Varanasi

Today judgment has been pronounced today in open court

duly signed & dated.

Dated: 20.07.2017 Sd/- (Umakant Jindal)

Special Chief Judicial Magistrate Varanasi

//True Transalted Copy//


211 ANNEXURE-P19

IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal

Crl. Writ Jurisdiction Case No. 1209 of 2016

Arising out of PS. Case No. - null Year - null Thana - null District - PATNA =========================================

Dipak Bajaj, Son of Late Awat Ram Bajaj, Resident of House No. 12/6 - Flaxley Road, Modem, SM46L.J, London (UK)

… …..Petitioner

Versus

1. Union of India through Department of Revenue, Government of

India, North Block, New Delhi-110 001

2. The Department of Revenue through its Secretary, North Block,

New Delhi-110 001

3. The Secretary, Department of Revenue, Government of India,

North Block, New Delhi-110 001

4. The Chief Commissioner of Customs (Preventive) Zone Patna, 4th

Floor, C.R. Building, Birchand Patel, Path, Patna - 800001

5. The Joint Commissioner, Customs (Preventive) Zone Patna, 4th

Floor, C.R. Building, Birchand Patel, Path, Patna- 800001

...... Respondents

=========================================

Appearance :

For the Petitioner : Mr. Amit Pandey, Advocate

Mr. Rakesh Chandra, Advocate

For the Respondents : Mr. S. D. Sanjay, Additional Solicitor

General


212 Mr. Satya Prakash Tripatty, Sr. S.C.,

Customs

Mr. Anshay Bahadur Mathur, C.G.C.

========================================

CORAM: HONOURABLE MR. JUSTICE BIRENDRA KUMAR

ORAL JUDGMENT

Date: 26-07-2017

Heard learned counsel for the parties.

2. A preliminary objection has been raised by Mr. S. D. Sanjay,

Additional Solicitor General to the respondents-Union of India

regarding maintainability of this writ application under Article 226 of

the Constitution of India before this Court on the ground that entire

cause of action arose within the tectorial jurisdiction of the been

filed in the Patna High Court.

3. Contention of the learned counsel is that indisputably the

petitioner claims to be a non-resident Indian and a business man in

the United Kingdom. The Custom Officials seized gold and foreign

currency from the possession of the petitioner at LCS, Sonauli in the

district of Maharajganj in the State of Uttar Pradesh near Indo-Nepal

Border. The petitioner was apprehend and produced before the

learned Chief Judicial Magistrate, Varanasi and sent to judicial

custody on 27.05.2014. Subsequently, prosecution of the petitioner

was sanctioned and launched at Lucknow. The petitioner was

released on bail by the Hon'ble Allahabad High Court on 29.01.2015


213 vide order passed in Criminal Misc. Bail Application No. 18322 of

2014. The proceeding of adjudication for confiscation of the gold

was also held and completed at Allahabad.

4. Thereafter, the petitioner filed application dated 25.01.2016

vide Annexure-4 before the Compounding Authority for

compounding of the aforesaid case. The term "Compounding

Authority" is defined in Rule 2(C) of the Customs (Compounding of

Offences) Rules, 2005 as follows:-

"Rule 2(C) Compounding Authority means the

Chief Commissioner, Customs having

jurisdiction over the place where the offence

under the Custom Act, 1982 has been or

alleged to have been committed".

5. According to learned counsel, a bare perusal of the aforesaid

provision would make it abundantly clear that the Chief

Commissioner, Customs having jurisdiction over the place where the

offence was committed (in the present case in the State of Uttar

Pradesh) is the Compounding Authority for the present case.

Therefore, by necessary implication, the application of the petitioner

vide Annexure-4 was filed before the Chief Commissioner having

jurisdiction in the State of Uttar Pradesh.

6. Learned counsel has pointed out that the Chief Commissioner,

Customs having seat at Patna is presently exercising territorial


214 jurisdiction over the State of Uttar Pradesh, Bihar and Jharkhand as

the Compounding Authority. Therefore, the petitioner filed

Annexure-4 for compounding before the Chief Commissioner having

seat at Patna. During the pendency of the aforesaid petition, this

writ application was filed for issuance of mandamus commanding

the respondent-authorities to allow the application of the petitioner

dated 25.01.2016, vide Annexure-4. However, during pendency of

the writ application, Annexure-4 was rejected by the Compounding

Authority by order dated 16.01.2017 vide Annexure-4/2 to the

counter affidavit. Thereafter, the petitioner field LA. No. 195 of 2017

seeking leave of this Court to amend the prayer portion by adding

that appropriate writ/order be issued, setting aside order dated

16.01.2017 vide Annexure-4/2 issued under the signature of the

Compounding Authority.

7. Learned counsel for the petitioner does not dispute

the aforesaid factual position. However, submits that since the

Compounding Authority passed the order at Patna, this Court has

jurisdiction to entertain this writ application under Article 226 of the

Constitution of India as part of the cause of action arose within the

territorial jurisdiction of the Patna High Court also. Article 226(2)

reads as follows:-

"226 (2) The power conferred by clause (1) to

issue directions, orders or writs to any


215 Government, authority or person may also be

exercised by any High Court exercising

jurisdiction in relation to the territories within

which the cause of action, wholly or in part,

arises for the exercise of such power,

notwithstanding that the seat of such

Government or authority or the residence of

such person is not within those territories."

8. A bare perusal of the provisions of Clause 2 above

would reveal that the power conferred by Clause 1 may be

exercised by any High Court exercising jurisdiction in relation to the

territories within which the cause of action wholly or in part arises

for the exercise of such power, notwithstanding that the seat of

such government or authority or the residence of such persons is

not within those territories. In the present case, no cause of action

arose within the territorial jurisdiction of this Court. The application

of the petitioner was filed before the Compounding Authority

exercising territorial jurisdiction on the place of offence i.e. the

chief Commissioner having jurisdiction over the State of Uttar

Pradesh. Therefore, the petitioner's grievance arose beyond the

territorial jurisdiction of this Court. A similar question was there in

Aligarh Muslim University and Another v. Vinay Engineering

Enterprises (P) Ltd. and Another reported in [(1994) 4 SCC


216 710] where the Hon'ble Apex Court in paragraph 15.2 stated as

follows:-

'75. 2 We are surprised, not a little, that the

High Court of Calcutta should have exercised

jurisdiction in a case where it had absolutely

no jurisdiction. The contracts in question were

executed at Aligarh, the construction work was

to be carried out at Aligarh, even the contracts

provided that in the event of dispute the

Aligarh Court alone will have jurisdiction. The

arbitrator was from Aligarh and was to

function there. Merely because the respondent

was a Calcutta based firm, the High court of

Calcutta seems to have exercised jurisdiction

where it had none by adopting a queer line of

reasoning. We are constrained to say that this

is case of abuse of jurisdiction and we feel that

the respondent deliberately moved the

Calcutta High Court ignoring the fact that no

part of the cause of action had arisen within

the jurisdiction of that Court. It clearly shows

that the litigation filed in the Calcutta High

Court was thoroughly unsustainable. "


217 9. In National Textile Corpn. Ltd. and Ors. v. M/s. Haribox

Swalram and Ors. [JT 2004 (4) SC 508] where the Hon'ble Apex

Court in paragraph 17 stated as follows:-

"17. As discussed earlier, the mere fact that

the writ petitioner carries on business at

Calcutta or that the reply to the

correspondence made by it was received at

Calcutta is not an integral part of the cause of

action and, therefore, the Calcutta High Court

had no jurisdiction to entertain the writ

petitioner and the view to the contrary taken

by the Division Bench cannot be sustained. In

view of the above finding, the writ petition is

liable to be dismissed..... ".

10. Considering the aforesaid authority and the provisions of

Clause 2 of Article 226 of the Constitution of India as well as the

fact that no cause of action for filing of this writ application arose

within the territorial jurisdiction of this Court, in my view, this writ

application is not maintainable here at and is fit to be dismissed.

11. Learned counsel for the petitioner has relied on the Hon'ble Apex

Court judgment in the case of KUSUM INGOTS & ALLOYS LTD.

Versus UNION OF INDIA reported in 2004(168) E.L.T. 3 (S.C.).

12. In my view, the referred case is not applicable in the facts and

circumstances of this case as no part of cause of action arose within


218 the territorial jurisdiction of this Court and in the case of KUSUM

(supra) also the Hon'ble Apex Court had considered that cause of

action or part thereafter even a smallest part arisen within the

territorial jurisdiction of the High Court would be sufficient to confer

jurisdiction to entertain application under Article 226 of the

Constitution of India. In the present case no part of cause of action

Uic iciTuunai jurisdiction oi tms court. Hence, the case (supra) is

not helping the petitioner.

13. In the result, this writ application is dismissed as devoid of

merit.

(Birendra Kumar, J)

Kundan/-

AFR/NAFR AFR

CAV DATE N.A.

Uploading Date

27.07.2017

Transmission Date

27.07.2017

//True Copy//


219 ANNEXURE-20

In The Court Of Sessions Judge, Varanasi.

Criminal Appeal No. 173 Of 2017

Deepak Bajaj Vs. State of U.P

Order Sheet

05.08.2017 Today this Criminal Appeal is filed by appellant. Heard

Advocates are not present to court put up on the date 11-8-17 for

hearing on admission.

11.08.2017

Case called out.

Learned counsel Shri Manoj Kumar Singh is present for proposed

appellant Deepak Bazaz.

None is present for proposed respondents.

Heard the arguments raised by above mentioned learned counsel on

admission. Perused the record.

This proposed criminal appeal has been instituted with a challenge

to judgment dated 20-7-2017 pronounced by the Court of learned

Special Judicial Magistrate, Varanasi in complaint case no. 765 of

2014 Government of India versus Deepak Bazaz offence under

Section 135 (i) Custom Excise Act 1962. Vide this impugned


220 order/judgment the learned lower court has convicted the proposed

appellant/accused Deepak Bazaz for above mentioned offence and

has sentenced him to undergo a simple imprisonment for one year

and to deposit an amount of Rs.75,000/- with the condition than in

case of default of payment of fine he shall undergo further

imprisonment for 3 months.

The impugned judgment has been challenged on various grounds

mentioned in detail in the memo of this proposed criminal appeal.

According to the report submitted by the office it is within

jurisdiction and limitation.

In the interest of justice it is admitted as criminal appeal. Be

registered accordingly.

Hear also on applications 6 B and 7 B.

Perused the record.

Application 6 B is moved with a prayer to stay the operation of

impugned judgment during the pendency of this appeal. In the

interest of justice the operation of impugned judgment is stayed up

to the extent that the accused/appellant shall deposit half amount of

the fine imposed by the learned lower court before he is released on

bail and the realization of half amount shall remain stayed during

the pendency of this appeal.


221 Application 7 B is moved with a prayer to release him on bail during

the pendency of this criminal appeal. In the interest of justice the

appellant is released on bail during the pendency of bail on

furnishing a personal bond of Rs.25,000/- and two sureties each in

the amount to the satisfaction of magistrate concerned. This

application is accordingly disposed of.

Issue notice to respondents.

Steps for notices by the appellant be taken within week.

Fixing 18.09.2017 for arguments hearing on this criminal appeal.

Sessions Judge.

Varanasi.

//True Copy//


222 ANNEXURE-P21

To, Dated: 11.08.2017

THE COMMISSIONER OF CUSTOMS LUCKNOW,

HALLNO.3,5TH&11TH FLOOR,

KENDRIYA BHAWAN, SECTOR-H,

ALIGANJ, LUCKNOW

Subject:- Application for release of passport of Shri Dipak Bajaj

retained in the unit Complaint case No.765 of 2014 registered in the

court of CJM (Special) at Varanasi of LCS-Sonauli regards.

Sir,

Please refer to unit complaint case No.765 of 2014

registered in the court of CJM (Special) at Varanasi of LCS-

Sonauli, under which a case was registered against the

undersigned alleging illegal import of gold. Also refer to Order-In-

Original No.23 /2015 dated 02.03.2015 of the Additional

Commissioner Customs (P), Lucknow, which indicates that the

Passport no.511352051 of the undersigned has not been

confiscated. Further, it is brought to your notice that the Special

CJM court of Varanasi has pleased to pass a judgment dated

20.07.2017 (copy enclosed) under which the undersigned has been

convicted and a bail order date 20.07.2017 has also been issued

which interalia does not prescribed retention of passport as a

condition for bail. The undersigned has preferred an appeal against

the said judgment before the court of sessions, Varanasi which is


223 pending for hearing. The undersigned submits that the impugned

judgment of dated 20.07.2017 is under challenge and it suffers from

apparent legal infirmity and therefore, there is likelihood that the

said judgment and order of may be set aside in the appeal

proceedings.

Now as on date there are no encumbrances for release of the

passport of the undersigned by the customs Authority. Your kind

attention is drawn to the ratio laid down by Hon’ble Supreme Court

in case of Maneka Gandhi Vs. Union of India (AIR 1978 SC

597) wherein it has been held that right to freedom of movement is

embedded under Article 21 of the Constitution of India and cannot

be curtailed without the procedure established by law and following

the due process of law. Your attention is also drawn towards the

ratio laid down by the Hon’ble supreme court in case of Suresh

Nanda Vs. CBI (Criminal Appeal No. 179/2008) wherein it has

been held that even court does not have power to impound the

passport under the provisions of code of Criminal Procedure. Thus

retention of passport of the undersigned by the Customs Authority

who are not the proper Authority for impounding the passport is

abinito illegal and curtails the right guaranteed under Article 21 of

the Constitution of India to every person.

In view of above, you are requested to release the passport of

the undersigned as the undersigned has already complied the

conditions imposed for grating the bail.


224 Any further communication can be done at my counsel’s Address:

Amit Pandey, Advocate

Wadhwas Chambers

Patna High Court

Patna

And C/o. Amit Pandey MIGH-295 Kankarbagh

Patna – 800020

And

Email to me: [email protected]

My contat No. 7096405139

Yours Sincerely

Sd/-

Deepat Bajaj

//True Copy//



225 ANNEXURE-P22

OFFIE OF THE COMMISSIONER OF CUSTOMS (PREVENTIVE)

UTTAR PRADESH AND UTTARAKHAND

5TH AND 11TH FLOOR, KENDRIYA BHAWAN, SECTOR H,

ALIGANJ, LUCKNOW -226024

C.No.VIII(25)01-Legal/Appl-Dipak/HC-Pat/2017/2132

Dated 30.08.2017

To,

Shri. Dipak Bajaj

C/o. Amit Pandey

MIGH-295 Kankarbagh

Patna – 800020

Sub: Application for release of passpost of Shri. Dipak Bajaj – Regarding.

Please refer you letter dated 11.08.2017 on the above subject

requested therein release of the subject mentioned passport.

In this regard it is to inform you that your passport has been

detained as per the order dated 05.05.2017 of the Special CJM,

Varanasi. And Hon’ble Court has sentenced you with simple

imprisonment for one year and also imposed a fine of Rs. 75,000/-.

Sd/-

ASSISTANT COMMISSIONER (LAGAL)

//True Copy//


226 IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) No. _____ _ OF 2017

IN THE MATTER OF:

Dipak Bajaj ….Petitioner

Versus

Union of India & Ors. ……Respondents

AN APPLICATION FOR EXEMPTION FROM FILING OFFICIAL

TRANSLATION TO

The Hon’ble Chief Justice of India and his Companion Justices of the

Supreme Court of India

The Humble Petition on behalf of the petitioner above named.

MOST RESPECTFULLY SHOWETH:

1. That the Petitioner in this Writ Petition seeks to challenge the

seizure and subsequent impounding of his passport by the

Customs Authority without the authority of law. It is the case

of the Petitioner before this Hon’ble Court that Petitioner’s

fundamental right under Article 21 of the Constitution of India

has been violated as his personal liberty has been restricted

by the seizure and subsequent impounding of his passport by

the Customs Authority without the authority of law.

2. That the original of P2, P3, P7 to P10 and P18 are in Hindi

language. According to the rules of this Hon’ble Court all the

documents are required to be translated into English by a

Translator appointed or approved by this Court.


227 3. That since the matter is urgent and the appointment of the

official translator and translation of the vernacular document

into English will take considerable time, and it will delay the

hearing of the matter, and therefore the petitioner have got

the same translated trough an Advocate.

4. That is in the interest of justice that the English translation of

the documents which are originally in Hindi as supplied by the

petitioner may be accepted for the purpose of hearing of the

present application.

PRAYER

It is therefore, most humbly prayed that this Hon’ble Court

may be pleased to:

i) Exempt the petitioner form filing the officially translated

copy of P2, P3, P7 to P10 and P18 and accept the

English translation of the same for the purpose of

hearing of the Special Leave Petition.

ii) Pass such further order/orders as this Hon’ble Court may

deem fit in the facts and circumstances of the present

case.

AND FOR THIS ACT OF KINDNESS THE PETITIONER SHALL

AS IN DUTY BOUND EVERY PRAY.

DRAWN BY: Adv. Renjith B. Marar & Adv.Vasudha Gupta for

M/s. Marar&Iyer FILED BY: DRAWN ON: 05.09.2017 FILED ON: 22.09.2017

LAKSHMI N. KAIMAL ADVOCATE FOR THE PETITIONER


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