Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Reserved on: 26 April, 2022
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Pronounced on: 25 May, 2022
+ CRL.M.C. 1416/2017 & CRL.M.A. 5836/2017
SURESH CHAND GUPTA & ANR ..... Petitioners
Through: Mr. Mukesh Anand, Advocate
versus
STATE OF GOVT OF NCT DELHI & ANR ..... Respondents
Through: Mr. Raghuvinder Varma, APP for
State.
Mr. Satish Aggarwala, Sr. SPP for
R-2.
CORAM:
HON’BLE MR. JUSTICE CHANDRA DHARI SINGH
J U D G M E N T
CHANDRA DHARI SINGH, J.
1. The instant petition under section 482 of the Code of Criminal
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Procedure, 1973 (hereinafter “Cr.P.C.”) for quashing of order dated 5
March 2014 passed by learned CMM Patiala House Courts, New Delhi in
CC No. No.75/1/2013 and to quash the CC No.75/1/2013 under Sections
132 and 135(1)(a) of the Customs Act, 1962 (hereinafter “the Act”) and
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also order dated 29 July 2016 passed by learned ASJ, Patiala House
Courts, New Delhi in Criminal Revision No. 47/2014.
BRIEF FACTS
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2. On 26 February 2013 the respondent, i.e. Director of Revenue
Intelligence, Head Quarter, (hereinafter “DRI”) filed a criminal complaint
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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:25.05.2022
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Case bearing CC No. 75/1/13 under Section 132 and 135 (1)(a) of the Act,
before the learned Trial Court stating therein that intelligence reports have
been received that M/s Elgin Electronics (hereinafter “the firm”), of which
petitioner no. 1 is the Proprietor and petitioner no. 2 is the Manager, was in
the business of importing public address systems, sound systems for
auditorium etc. without payment of customs duty. On basis of the said
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inputs, search was conducted on 13 July 2009 by the DRI at the premises
of the firm. Goods imported by the said firm were detained and inquiry
was made from the accused persons about the value of the detained goods.
The petitioner no. 1 furnished an approximate value of the goods vide letter
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dated 1 September, 2009, but no document regarding the same was given
to the DRI. Goods detained were then seized on the reasonable belief that
same has been imported without payment of customs duty.
3. It is further alleged that during the course of investigation,
documents pertaining to retail Invoices raised by the firm were found to be
fake. The statement of one Ramesh Gupta, partner of M/s Gupta Brothers
was recorded under Section 108 of the Act in which he has stated that his
firm had executed a project for M/s GAIL for an total amount of Rs. 7.46
Crores, out of which work pertaining to audio visual system for Rs. 1 Crore
was outsourced to the firm. A retail invoice, recovered from one of the
premises of the accused persons, was shown to Ramesh Gupta regarding
sale of mobile phones for Rs.62,25,305/- which was stated to be fake.
Investigation revealed that the accused persons had committed offences
punishable under Sections 132 and 135(1)(a) of the Act.
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KUMAR BABBAR
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4. Learned Trial Court vide order dated 5 March 2014 issued
summons to the accused persons/petitioners dispensing with the
examination of the complainant, who was a public servant at the pre-
summoning stage. The petitioners being aggrieved, challenged the order
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dated 5 March 2014, by way of filing Criminal Revision No.47/2014
before Additional Sessions Judge-02, FTC, New Delhi. Vide order dated
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29 July 2016, the aforesaid criminal revision was dismissed by the
Revisional Court. Hence, the instant Criminal Misc Petition under Section
482 of Cr.P.C. has been preferred by the petitioners.
SUBMISSIONS
5. The learned counsel for the petitioner submitted that no case under
Section 132 of the Act is made out against the petitioners as admittedly the
petitioners never made, signed, used any document, declaration or
statement in the course of the business of petitioner no.1's firm knowingly
or under a belief that such declaration, document or statement is false. It is
further submitted that there is no violation as contemplated under Section
111 of the Act as the petitioners are neither importer of goods nor
associated in any capacity with any illegal import of the subject goods. It
is further submitted that as per Section 135(1)(a) of the Customs Act,
action can only be taken in respect of any goods, where market price of
which exceeds Rs.1 Crore. However, in the present case, the value of the
goods assessed by the Department is only Rs.77,16,228/-, which is less
than 1 Crore.
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KUMAR BABBAR
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6. Learned counsel further submitted that learned CMM did not have
the territorial jurisdiction to entertain the complaint. There is a notification
of the Registrar General vide No. 3089/DHC/Gaz./VI.E.2(a) 2008 of the
Delhi High Court, as per which prosecutions for violation of the Customs
Act are to be dealt with by the Criminal Courts at Patiala House, New
Delhi. Therefore the Court of the CMM, New Delhi District has been
specifically conferred with the jurisdiction to entertain all prosecutions
under the said Act pertaining to Delhi. It is also submitted that the
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summoning order dated 5 March 2014 is a non-speaking order and the
Revisional Court has also not dealt with the submissions/contentions made
by the petitioners in the proper perspective and dismissed the revision
without considering the aforesaid facts.
7. It is submitted that there is nothing to show that the petitioners made
any false declaration or prepared false documents and therefore, they are
not liable to be prosecuted under Section 132 of the Act. Learned counsel
further submitted that the complaint is barred by limitation insofar as per
the provision of Section 132 of the Act, the punishment which could have
been imposed for violating Section 132 of the Act could have extended for
a period of six months or with fine or with both. Limitation in such a case
as provided under Section 468 of the Cr.P.C. is only 1 year. In the present
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case, the complaint was filed by the respondent No.2 on 26 October 2013,
whereas the incident in this case pertains to the year 2009 and, therefore,
the complaint was admittedly barred by limitation. It is settled law that if
the complaint is time barred, for which neither any admissible evidence has
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been filed nor sufficient reason has been shown for such delay, then the
proceedings should be quashed.
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8. It is further submitted that as per order dated 4 August 2011 passed
by Custom Commissioner (Preventive) Custom, collective value of all the
goods have been taken as Rs.77,16,288/-. It is further submitted that
respondent no.2 did not prefer appeal against the aforesaid order passed by
the Commissioner, the said order, therefore, attained finality.
9. Learned counsel for the petitioner submitted that the sanction by the
Additional Director, DRI, for prosecution is invalid and void-ab-initio as it
is a result of non-application of mind and suffers from grave lacuna of
being mechanical in nature without going into the correct facts and without
testing the applicability of the provisions of the Customs Act.
10. In support of his arguments the learned counsel has relied on the
case of Canon India Pvt Ltd vs. Commissioner of Customs , Civil Appeal
No.1827 of 2018 in which the Hon’ble Supreme Court held as follows:-
“It is, therefore, clear to us that the Additional Director
General of DRI was not “the” proper officer to exercise
the power under Section 28(4) and the initiation of the
recovery proceedings in the present case is without any
jurisdiction and liable to be set aside.”
11. It is submitted that the complaint and prosecution launched by the
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DRI is contrary to their circular no. 27/2015 customs dated 23 October
2015, according to which the prosecution has been guided. In the present
case, sanction was granted by Additional Director General without
applying the mind and even in the order of sanction nowhere it has been
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KUMAR BABBAR
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mentioned that on which basis he is prima facie making his mind that the
DRI has fit case to prosecute the petitioner. It is further submitted that the
Additional Director General in his order of sanction has not specified
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whether he had any knowledge of order dated 4 August 2011 passed by
the Commissioner of Customs. Thus, the order of sanction is improper and
the complaint filed on the basis of the aforesaid sanction also becomes
improper and invalid.
12. The Hon’ble Supreme Court in the case of Joseph P. Bangera vs.
State of Maharashtra and Anr (2005) 13 SCC 558 held as under:-
“It appears that after interception of a vessel on 24-10-
1982 adjudication proceeding started in which the vessel
in question was confiscated and penalty was imposed
against the appellant. Arising out of the penalty
proceeding, the matter was taken to the Customs, Excise
and Gold (Control) Appellate Tribunal (hereinafter
referred to as “CEGAT”) and, by order dated 18-4-1995,
the appeal has been allowed and penalty has been deleted
on merit. It has been submitted that in view of the fact
that penalty imposed, against the appellant under the
provisions of the Act, has been deleted by CEGAT on
merit, it would be just and expedient to quash the
prosecution as continuance thereof would amount to an
abuse of the process of court. In support of his
submission, the learned counsel has placed reliance upon
the judgment of this Court, in K.C. Builders v. CIT in
which, following its early decisions, this Court quashed
criminal prosecution of the accused under the provisions
of the Income Tax Act on the sole ground that penalty
imposed against him was deleted on merit. In our view,
the present case is squarely covered by the aforesaid
decision of this Court, as such, it would be just and
expedient to quash the prosecution of the appellant.”
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KUMAR BABBAR
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13. It is submitted that the Hon’ble Supreme Court in the aforesaid case
has postulated the law that if the penalty amount is deleted by the
Appellate Tribunal then the criminal prosecution must be quashed. In the
instant case also the Appellate Tribunal has already deleted the penalty
which has been imposed by DRI. Learned counsel for the petitioner
vehemently submitted that in view of the aforesaid law laid down by the
Hon’ble Supreme Court, the criminal complaint filed by the respondent
may be quashed and the subsequent proceedings, i.e., summoning order
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dated 5 March 2014 and revisional order dated 29 July 2016 may be set
aside.
14. Per Contra , learned counsel for the respondent vehemently
submitted that there is no illegality in the orders impugned. Learned CMM
after considering the facts and circumstances and material on record passed
the summoning order and issued summon to the petitioners. The
petitioners filed the criminal revision before learned Additional Sessions
Judge. The said revision was dismissed after considering the contentions
of the petitioners herein as well as after perusing the reasons given by
learned CMM while passing the summoning order. The Revisional Court
did not find any illegality or error in the impugned order passed by the
learned CMM. Learned counsel for the respondent submitted that on the
intelligence report, search was conducted and investigation was carried out
by the DRI and on the basis of the said search and investigation, the
criminal complaint was filed before the Trial Court after obtaining the
sanction from the competent authority of DRI for purpose of prosecuting
the petitioners. It is submitted that while passing the summoning order, the
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Trial Court is only required to appreciate the evidence and to consider
whether the material on record is sufficient to prima facie make out a case
against the accused persons and is not required to go into the merits of the
case and conduct a roving enquiry into the matter of summoning. It is pre-
mature stage to raise all the contentions before this Court and therefore the
instant petition lacks of merits and deserves to be dismissed.
15. Heard learned counsel for the parties and perused the material on
record.
ANALYSIS AND FINDINGS
16. The question, before this court, is whether from the facts and
circumstances, enumerated above, it could be inferred that the Court below
has passed the impugned order summoning the petitioners without taking
into consideration the material as well as the provisions of the statute.
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17. The impugned order dated 5 March 2014 passed by the Court of
learned CMM, Patiala House Courts, New Delhi and relevant portion of
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order dated 29 July 2016 passed by learned ASJ, Patiala House Courts,
New Delhi, are reproduced herein below:-
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i. Order dated 5 March 2014
“Present: Ms. Pooja Bhaskar, Ld. SPP for complainant
with Complainant Shri Rajeev Sadana
Accused persons are stated to be on court bail but not
Present today
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Digitally Signed By:PRAVEEN
KUMAR BABBAR
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An application for exemption of personal
attendance of complainant and for dispensing of
recording preliminary evidence is filed along with the
complaint.
As this complaint is filed by a public servant in
discharge of his public duties, hence, recording of
preliminary evidence is dispensed with. Personal
attendance of complainant is also dispensed with till
further orders. Complainant is allowed to be
represented through Ld. SPP for complainant.
Complaint and documents perused. Heard.
After going through the complaint, the documents
and arguments raised before me by Ld. SPP, I am of the
opinion that at this stage there are sufficient grounds to
proceed against accused U/s. 132/ 135 (1) (a) of The
Customs Act, 1962 and. therefore I take cognizance for
the offence U/s. 132/ 135 (1) (a) of The Customs Act,
1962.”
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ii. Order dated 29 July 2016
“9. I have heard the counsel for the parties and have
perused the record of the trial Court. My findings are
as under:-
10. With respect to the submission regarding market
value of the goods for which the petitioner was being
prosecuted not exceeding one crore, the records
contains statement of Ramesh Gupta of M/s Gupta
Brothers stating that they had outsourced their
contract to the petitioner for public announcement
systems and value of work given to the petitioner was
worth Rs. 1 crore.
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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:25.05.2022
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11. The next submission made was that the complaint
was barred by limitation. In this regard the provisions
of the Economic Offences (Inapplicability of
Limitation) Act 1974 excludes the applicability of
Chapter XXXVI of the Code of Criminal Procedure in
respect of prosecution for certain economic offences.
The Schedule to the said Act included offences under
the Customs Act 1962. Hence, the issue of limitation
cannot arise for the present case.
12. The petitioner had submitted that without
summoning panch / seizure witnesses at the pre-
summoning stage summons could not have been
issued. He relied upon the case of Customs vs. Dina
Aruna Gupta (supra). Perusal of the said judgment
reveals that in that case the said finding was given in
a case at the final stage i.e. after recording of pre-
summoning, pre-charge and post charge-evidence
under sections 244 and 246 of the Cr.P.C. There is no
ratio laid down in the said judgment that without
summoning panch witnesses at the presummoning,
summons cannot not be issued to the accused.
13. The petitioner had submitted that since the
CESTAT had stayed the departmental proceedings
against the petitioner, the complaint was not
maintainable. He had relied upon the judgment in the
case of Dinesh Aggarwal vs. DRI (supra). Having
gone through the said judgment it appears that the
ratio laid down in the said case is that once there is a
final finding of the CESTAT in favour of the importer
against a charge of mis-declaration and
undervaluation, proceedings of a criminal complaint
for offences under section 132 and 135 (1) (a) of the
Customs Act 1962 for the same charge cannot
proceed. In the present case counsel for the petitioner
himself had stated that the proceedings before the
CESTAT were pending and only an order of stay had
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KUMAR BABBAR
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been passed. In these circumstances the ratio laid
down in the case of Dinesh Aggarwal vs. DRI (supra)
will not apply to the present case.
14. Petitioner had submitted that he could not have
been prosecuted for smuggling of non-notified goods
and goods which are easily available in the market.
He had relied upon the case of Sayed Ibrahim & Ors.
vs. CC (supra). The said judgment is of a Tribunal at
Bangalore and cannot be said to be a binding
precedent.
15. The petitioner had submitted that the Ld. CMM
did not have the territorial jurisdiction to entertain
the complaint. There is a notification of the Registrar
General vide No. 3089/DHC/Gaz./ VI.E.2(a)2008 of
the Delhi High Court as per which prosecutions for
violation of, amongst others, the Customs Act are to
be dealt with by the criminal courts at Patiala House
Courts, New Delhi. Therefore the Court of the CMM,
New Delhi District at Patiala House Courts has been
specifically, conferred the jurisdiction to entertain all
prosecutions under the said Act pertaining to Delhi.
16. The counsel for the petitioner had submitted that
the impugned order was a non-speaking order-TMs
Court has gone through the contents of the complaint
and the documents attached to the same. Issuance of
summons to the petitioner does not suffer from any
illegality whatsoever.
17. Hence for the reasons recorded above, the
revision petition has no merit and is dismissed….”
18. Section 135 of the Act reads as under:-
135. Evasion of duty or prohibitions .—
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KUMAR BABBAR
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(1) Without prejudice to any action that may be taken
under this Act, if any person—
(a) is in relation to any goods in any way
knowingly concerned in misdeclaration of value or
in any fraudulent evasion or attempt at evasion of
any duty chargeable thereon or of any prohibition
for the time being imposed under this Act or any
other law for the time being in force with respect
to such goods; or
(b) acquires possession of or is in any way
concerned in carrying, removing, depositing,
harbouring, keeping, concealing, selling or
purchasing or in any other manner dealing with
any goods which he knows or has reason to believe
are liable to confiscation under section 111 or
section 113, as the case may be; or
(c)
attempts to export any goods which he knows or
has reason to believe are liable to confiscation
under section 113; or
(d) fraudulently avails of or attempts to avail of
drawback or any exemption from duty provided
under this Act in connection with export of goods,
he shall be punishable,—
(i) in the case of an offence relating to,—
(A) any goods the market price of which
exceeds one crore of rupees; or
(B) the evasion or attempted evasion of duty
exceeding thirty lakh of rupees; or
(C) such categories of prohibited goods as
the Central Government may, by notification
in the Official Gazette, specify; or
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(D) fraudulently availing of or attempting to
avail of drawback or any exemption from
duty referred to in clause (d), if the amount
of drawback or exemption from duty exceeds
thirty lakh of rupees, with imprisonment for
a term which may extend to seven years and
with fine: Provided that in the absence of
special and adequate reasons to the
contrary to be recorded in the judgment of
the court, such imprisonment shall not be for
less than one year;
(ii) in any other case, with imprisonment for a term
which may extend to three years, or with fine, or
with both. 2[(2) If any person convicted of an
offence under this section or under sub-section (1)
of section 136 is again convicted of an offence
under this section, then, he shall be punishable for
the second and for every subsequent offence with
imprisonment for a term which may extend to
seven years and with fine: Provided that in the
absence of special and adequate reasons to the
contrary to be recorded in the judgment of the
court such imprisonment shall not be for less than
one year.
(3) For the purposes of sub-section (1) and (2), the
following shall not be considered as special and
adequate reasons for awarding a sentence of
imprisonment for a term of less than one year, namely:—
(i) the fact that the accused has been convicted for
the first time for a reference under this Act;
(ii) the fact that in any proceeding under this Act,
other than a prosecution, the accused has been
ordered to pay a penalty or the goods which are
the subject matter of such proceedings have been
ordered to be confiscated or any other action has
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been taken against him for the same act which
constitutes the offence;
(iii) the fact that the accused was not the principal
offender and was acting merely as a carrier of goods or
otherwise was a secondary party to the commission of the
offence;
(iv) the age of the accused.”
19. As per Section 135(1)(a) of the Act, prosecution can be initiated if
the market price of the goods exceeds Rs.1 Crore. It is an admitted fact
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that in the order dated 4 August 2011 passed by the Commissioner of
Customs (Preventive), collective value of all the goods was taken to be
Rs.77,16,288/- and it is further admitted that no appeal was preferred
against the said order, which therefore, attained finality.
20. Section 132 of the Act reads as under:-
“Whoever makes, signs or uses, or causes to be made,
signed or used, any declaration, statement or document
in the transaction of any business relating to the customs,
knowing or having reason to believe that such
declaration, statement or document is false in any
material particular, shall be punishable with
imprisonment for a terms which may extend to [two
year], or with fine, or with both.”
21. At the outset, it may be observed that in the present case there is
nothing to show that the petitioners made any false declaration or prepared
false documents and, therefore, he is not liable to be prosecuted under
Section 132 of the Act. In this case, moreover the complaint is barred by
limitation inasmuch as per the provisions of Section 132 of the Act, which
existed at the relevant time the punishment which could have been imposed
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for violating Section 132 of the Act could have extended for a period for a
period of six months or with fine or with both and limitation in this case as
provided under Section 468 of Cr.P.C. is only 1 year.
22. This Court has perused the aforesaid orders. I find that the learned
Courts below did not consider that at the stage of Section 200 of Cr. P.C.,
the exemption can only be given to a public servant who has filed a case in
his official capacity, but such exemption is not available with the other
witnesses. In the present case, it was the duty of respondent no.2 to prove
its case against the petitioners and show sufficient evidence on record,
however, the respondent no. 1 in the present case did not examine even the
panch witnesses to prove its case. Therefore, the Court below has
summoned the petitioner without any material on record for prima facie
satisfaction. The impugned order, passed in the instant case, is bad in law
in five folds: firstly, the prosecution of the petitioner cannot be initiated
under Section 135(1)(a) of the Act as valuation of the goods is less than
Rs.1 Crore; secondly, the respondent-department has not examined any
witness to prove its case against the petitioner; thirdly, the complaint was
admittedly barred by limitation; fourthly; the sanction by the Additional
Director for prosecution is invalid and void-ab-initio ; and lastly, the Court
below while passing the summoning order has not assigned any reason for
summoning the petitioner.
CONCLUSION
23. In view of the aforementioned facts, circumstances and law
established, I am inclined to hold that the impugned orders passed by the
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Courts below summoning the petitioners and dismissing the criminal
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revision are bad in law. The summoning order dated 5 March 2014
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passed by learned CMM and order dated 29 July 2016 passed by learned
ASJ are set aside. Accordingly, criminal complaint bearing CC
No.75/1/2013 filed under Sections 132 and 135(1)(a) of the Customs Act
and all proceedings emanating therefrom are hereby quashed. The petition
is allowed and stands disposed of.
24. Pending application, if any, also stands disposed of.
25. The judgment be uploaded on the website forthwith.
(CHANDRA DHARI SINGH)
JUDGE
MAY 25, 2022
Aj/ct
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KUMAR BABBAR
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