Case Note & Summary
The matter arose from a criminal revision application filed by the Central Bureau of Investigation (CBI) before the High Court of Bombay at Goa, challenging the order of the Special Judge, CBI Court at Mapusa, Goa in Special Case No. 29/2013/D dated 28.03.2014. The Special Judge had discharged Accused Nos. 1 and 2, who were public servants in the Central Excise Department, from the offence punishable under Section 13(1)(d) read with Section 15 of the Prevention of Corruption Act, 1988. Accused No. 1 was the Superintendent of Central Excise, Vasco Range, Goa, and Accused No. 2 was an Inspector of Central Excise under him. The other accused were private individuals involved in the manufacture and export of garments: Accused No. 3 was the proprietor of M/s. Globe Fashion (Exim) India, Accused No. 4 was the proprietor of M/s. Welspin & Branded Impex, Accused No. 5 was the Manager of Welspin & Branded Impex, and Accused No. 6 was the proprietor of M/s. K.D. Impex. The prosecution alleged that Accused No. 3 had obtained nine Duty Entitlement Pass Book (DEPB) licenses against eight exports to firms in Zambia and Dubai. The ninth consignment meant for export was intercepted by the Superintendent of Customs, Hyderabad on 27 March 2004 and found to contain pieces of cloth described as ladies nightwear but actually irregular pieces of cloth, not eligible for DEPB benefits. Investigation revealed that an attempt was made to export sub-standard material under four shipping bills dated 17.03.2004 without issuance of CT-1 form and without a Modal Examination order by the Jurisdictional Assistant/Deputy Commissioner. Accused Nos. 1 and 2 were alleged to have abused their official position by conniving with the exporters, overlooking quality during physical verification, assigning ARE-2 forms, and failing to check 5% of the export consignment as required. The Commissioner of Customs, Hyderabad in adjudication proceedings under Section 144(1) of the Customs Act observed dereliction of duty on the part of Accused Nos. 1 and 2 but found no extraneous considerations, imposing penalties of ₹25,000 and ₹15,000 respectively under Section 114 of the Customs Act. The Commissioner also declared the goods as substandard junk cloth pieces, re-determined their value under Section 14, disallowed Central Excise rebate and DEPB credit, and ordered confiscation under Sections 113(d) and 118(b) of the Customs Act. Accused Nos. 1 and 2 appealed to CESTAT Bangalore, which set aside the penalties. Relying on the CESTAT order, Accused Nos. 1 and 2 filed a discharge application before the Special Judge, which was allowed by the impugned order. The CBI argued that the discharge order caused a miscarriage of justice, as the accused public servants had committed criminal misconduct by facilitating the export of rags in place of licensed materials, and that the CESTAT exoneration from Customs penalty should not have been relied upon. The High Court heard the revision and reserved judgment on 17.03.2021, pronouncing on 06.05.2021. The provided text does not include the Court's final reasoning or operative order.
Headnote
A) Criminal Procedure - Discharge of Accused - Section 227 Code of Criminal Procedure, 1973 and Section 13(1)(d) read with Section 15 Prevention of Corruption Act, 1988 - The Special Judge, CBI Court at Mapusa, Goa in Special Case No. 29/2013/D discharged Accused Nos. 1 and 2 for the offence punishable under Section 13(1)(d) read with Section 15 of the PC Act by order dated 28.03.2014. The CBI challenged the discharge, contending that the public servants had abused their official position in connivance with exporters to facilitate fraudulent exports. The High Court's final decision is not stated in the provided text (Paras 1-3, 12). B) Customs Law - Adjudication and Penalty - Sections 14, 113(d), 114, 118(b), 144(1) Customs Act, 1962 - The Commissioner of Customs, Hyderabad in adjudication proceedings under Section 144(1) observed dereliction of duty by Accused Nos. 1 and 2 but found no extraneous considerations; imposed penalties of ₹25,000 and ₹15,000 respectively under Section 114, declared goods as substandard junk cloth pieces/rags, re-determined value under Section 14, disallowed export benefits, and ordered confiscation under Sections 113(d) and 118(b). CESTAT Bangalore subsequently set aside the penalties in Appeals C-377/2005 and C-376/2005. This administrative record formed the backdrop for the discharge application (Paras 7-8). C) Prevention of Corruption Act - Criminal Misconduct by Public Servant - Section 13(1)(d) read with Section 15 - Allegations were that Accused Nos. 1 and 2, as Superintendent and Inspector of Central Excise, abused their official position to connive with Accused Nos. 3 to 6, overlook quality during physical verification, issue false certification, and facilitate export of rags in place of declared ladies nightwear. The CBI argued that such intentional latitude to exporters to export substandard goods without following mandatory procedural requirements constituted criminal misconduct punishable under the PC Act (Paras 2, 6, 10-11). D) Export Control - Duty Entitlement Pass Book and Central Excise Procedures - Duty Entitlement Pass Book (DEPB) licenses, ARE-2 forms, CT-1 form, Modal Examination order - Accused No. 3 obtained nine DEPB licenses against eight exports; the ninth consignment was intercepted and found to contain irregular pieces of cloth instead of ladies nightwear. Investigation revealed that export attempt was made under four shipping bills without issuance of CT-1 form or Modal Examination order by the Jurisdictional Assistant/Deputy Commissioner; Accused Nos. 1 and 2 allegedly assigned ARE-2 forms and other documents without proper verification. These procedural lapses were central to the corruption allegations (Paras 4-6, 10).
Issue of Consideration
Whether the Special Judge erred in discharging Accused Nos. 1 and 2 for offence under Section 13(1)(d) read with Section 15 of Prevention of Corruption Act, 1988; whether the CESTAT order setting aside Customs penalty should preclude criminal prosecution.
Law Points
- Criminal Revision under Section 397 read with Section 401 CrPC
- Discharge under Section 227 CrPC
- Offence under Section 13(1)(d) read with Section 15 Prevention of Corruption Act
- 1988
- Dereliction of duty not necessarily criminal misconduct
- CESTAT order setting aside penalty under Customs Act
- Adjudication order under Section 144 Customs Act
- Physical verification norms for exports
- Abuse of official position by public servants
