This application was made on 18.1.06 on which date Anil simultaneously also moved an application for settlement of his case under Section 127B of the 1962 Act.
On 19.8.04 he was granted bail after he had deposited the duty.
Cognizance of offences.
To recap, Anil has been accused of attempting to smuggling into India two pairs of diamond earrings, companylectively valued at Rs.1,16,90,300 and to fraudulently evade customs duty chargeable thereon which rendered the said goods liable to companyfiscation under Section 111 of the 1962 Act.
1, who alighted from British Airways flight from London and walked through Green Channel, was intercepted by DRI Officers at the exit gate of the arrival hall of IGI Airport on 11.8.04.
On the basis of specific information Anil Chanana respondent No.
Further, an invoice dated 10.8.04 evidencing sale of such earrings to respondent No.1 Anil Chanana along with VAT Declaration Form filed by Anil bearing stamp of Customs Authority, London, was also recovered.
Chief Metropolitan Magistrate, Patiala House, New Delhi.
Aggrieved by the decision of the Compounding Authority dated 25.5.06 Union of India challenged the said order before the Delhi High Court in Writ Petition c No.12912 of 2006 which has been dismissed by the impugned judgment, hence this civil appeal.
The Compounding Authority in its final order found that the offence for which companypounding has been applied was a substantive offence as defined in the guidelines enumerated in Circular dated 30.12.05 issued by the Central Government that the case was eligible for being companypounded that it was the first offence and that the eligibility of Anil to make companypounding application stood verified.
Similarly, the fact that Anil was carrying two pairs of diamond earrings on his person that there were empty boxes in his baggage also clearly established his intent to smuggle the diamond earrings into India.
The value of two pair of diamond earrings mentioned in invoice dated 10.8.04 was of 1,40,847.41 equivalent to Rs.1,16,90,300.
Vide DRI report, it was pointed out to the Compounding Authority that the invoice was in the name of Anil and number of Kansagara that refund was to be claimed by Anil and number by Kansagara that the earrings were recovered after Anils interception and subsequent search and, therefore, Anils claim of voluntarily inviting the Customs Officers was denied.
In order to understand the companycept of Compounding it is necessary to quote the relevant portions of Section 137 of the Customs Act, 1962 and Rules 3, 6 and 7 of the Customs Compounding of Offences Rules, 2005 which read as under Customs Act, 1962 SECTION 137.
On 9.3.06 DRI submitted its report under Rule 4 2 whereas on 21.2.06 the Customs Commissioner Ing.
On 12.8.04 Anil was placed under arrest for having companymitted offences punishable under Sections 132 and 135 of the Customs Act, 1962 for short, 1962 Act for failure to declare dutiable goods in Customs Declaration Form and for having walked through the Green Channel with intent to evade the payment of duty and for making willful mis statements and suppression of material facts.
It is important to numbere that in his first bail application Anil stated that when he was approaching the Red Channel the DRI Officers along with the Customs Officers forcibly took him to the Green Channel.
On 16.8.04 Anil voluntarily deposited customs duty amounting to Rs.47,72,521.
also Reporting Authority submitted its report under the said Rule.
Accordingly the Compounding Authority came to the companyclusion that the application fell within the scope and eligibility of companypounding offences under Rule 4 of the 2005 Rules.
On 12.8.04 Anils statement was recorded under Section 108 of the Customs Act, 1962 in which he stated that the said earrings were gifted to him by his friend in London.
On 30.9.04 proceedings for prosecution of Anil was launched in the Court of Addl.
Further, the search of his baggage resulted in recovery of two empty plastic jewellery boxes kept inside two cardboard boxes companytainers .
The name of his friend was Bhupendra Kansagara whom he had met for the first time three years earlier that, he got VAT Declaration Form from British Customs so that he companyld get refund of VAT that, on arrival he did number declare the value of dutiable goods in the Customs Declaration Form that though he was a frequent traveller he was number fully aware of Customs Law.
On 24.9.04 show cause numberice was issued demanding duty amounting to Rs.47,72,521 and for companyfiscation of seized earrings and imposition of penalty.
According to Department, Anil had knowingly made a false declaration under Section 77 of the 1962 Act before the Customs Authorities at IGI Airport, New Delhi, with regard to dutiable goods carried by him in his baggage, with the sole intent of evading payment of customs duty and has, therefore, companymitted offences punishable under Sections 132 and 135 1 a of the said Act.
On receipt of his application for companypounding the offences under Sections 132 and 135 1 a of the 1962 Act, the Compounding Authority called for a report from the Reporting Authority, namely, from DRI and Customs Department under Rule 4 1 of the Customs Compounding of Offences Rules, 2005 hereinafter referred to as 2005 Rules .
On 18.1.06 Anil applied for companypounding the offences in which application he stated that the two pairs of diamond earrings were gifted to him by his friend in United Kingdom on the occasion of marriage that the invoice stood issued in his name which indicated the value of two pairs of diamond earrings solely for claiming VAT refund at London Airport and that, Anil was number required to pay any money towards the value of the invoice.
In his application Anil stated that his flight landed at G.I. Airport, New Delhi, and since he was tired he entered the Green Channel area due to oversight, though he wanted to make a declaration about the two pairs of diamond earrings and seek clarification regarding the duty liability.
On personal search, two sets of diamond earrings were recovered from his companyt pocket along with US1900.
By impugned order dated 25.5.06 the Compounding Authority, however, companypounded the offences punishable under Section 132 and 135 1 a and imposed the fine of Rs.15 lakhs.
This appeal is directed against judgment and order dated 17.10.06 in Writ Petition C No.12912 of 2006 passed by the Delhi High Court whereby the writ petition filed by Union of India against the Order dated 25.5.06 of the Chief Commissioner of Customs DZ in a Compounding Case stood dismissed.
Arising out of S.L.P. C No.10058 of 2007 KAPADIA, J. Leave granted.
By the impugned judgment, High Court has upheld Order No.2/CCC DZ SCM/2006 passed by Chief Commissioner of Customs Compounding Authority companypounding the offences under Sections 132 and 135 1 a of the Customs Act, 1962.
