LexHIRA LAL HARI LAL BHAGWATI. versus C.B.I., NEW DELHI
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A B HIRA LAL HARi LAL BHAGWATI. v_ C.B.I., NEW DELHI MAY 2, 2003 [BRIJESH KUMAR AND DR. AR. LAKSHMANAN, JJ.] Penal Code, 1860-Sections 420 and 1208-Customs Act, 1962-Kar Vivad Samadhan Scheme, 1998 under Finance (No.2) Act, 1998, Chapter C JV-Section 95-Cancer Society importing machines for treatment of cancer- Availing customs duty exemption certificate-Collector demanding duty however, considering philanthropic activities of society levying token redemption fine and not launching prosecution-Order upheld-Appeal- During pendency of appeal 1998 Scheme brought, whereby persons availing benefit thereunder was granted imn111nity from prosecution from any offence D under Customs Act including evasion of duty-Importer paying stipulated amount of custom duty-Issuance of full and final sel//ement certificate of tax arrears and grant of immunity-However, CBI filing criminal proceedings- Petition seeking quashing of FIR-Dismissal by High Court-Justification of-Held: Initiation of criminal proceedings notwithstanding immunity granted E under 1998 Scheme not justified since the alleged criminal liability stands compounded on a settlement with respect to civil issues, thus, FIR unwarranted-Also no prima facie case of cheating and criminal conspiracy made out-Criminal conspiracy and cheating-Essential Ingredients-Code of Criminal Procedure, 1973-Section 482. F A cancl:r society imported machines for treatment of cancer. Appellants-office bearers of the society availed custom duty exemption certificate on false assertion that the machines imported are for "actual user". Authorities raided the premises and seized the machines. Show cause notice was issued to the society on the ground that the exemption certificate was issued in the name of the cancer institute and not in the name of the G cancer society and thus it was not entitled to exemption and was liable to pay customs duty. Collector held that the society was liable to pay customs duty. However, considering the charitable and philanthropic activities of the society, it did not recommend prosecution and imposed a token redemption fine of Rs. I. Appellant-office bearers of the society filed H I I I 8 ~· ~'- -- HIRA LAL llARI LAL 131-lAGWATI. v. C.B.I. 1119 appeals. Tribunal upheld the order of the Collector. Society then filed A appeal before this Court. During pendency of the appeal, Kar Vivad Samadhan Scheme, 1998 under Chapter IV of Finance (No.2) Act, 1998 was launched, whereby whoever takes the benefit under the said Scheme is granted immunity from prosecution from any offence under the Customs Act including the offence of evasion of duty. In accordance with the Scheme, B the society deposited the stipulated amount and withdrew the appeal. Thereafter, the society was issued certificate for full and final settlement of tax arrears under the Scheme and was immuned from prosecution from any offence under the Customs Act including the offence of evasion of duty. However, the respondent-CBI registered a case under Section 1208 read with Section 420 !PC against the appellants alleging that they cheated the C Government by evading customs duty and obtained exemption ct:rtificate by violating the provisions of 'actual user' condition. Appellants filed petition for quashing the FIR. Single Judge of the High Court dismissed the same. Hence the present appeals. Appellants contended that the alleged criminal liability stands D compounded on a settlement with respect to the civil issues, therefore, the FIR was erroneously issued and was totally unwarranted; that the society was immuned from prosecution from any offence under the Customs Act, 1962, including evasion of duty pursuant to the certificates issued under the Kar Vivad Samadhan Scheme, 1998; that the Single Judge failed to E appreciate that the society had taken the benefit of the Amnesty Scheme and, therefore, implicating the appellants being office bearers of the Society under Section 1208 read with Section 420 IPC is against the purpose and object of the Scheme, therefore, there is no prima facie case against the appellants in respect of the alleged offence; that evasion of Customs Duty was predominantly a civil case and that the ingredients of criminal offence F were missing/wanting and which liability, in any case, stood settled and in such a scenario, the appellants to undergo an agony of a long criminal trial would be an abuse of process of Court and a
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