1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELATE JURISDICTION CRIMINAL WRIT PETITION NO.664 OF 2009 Subhash Chand Rastogi ...Petitioner vs. 1.Union of India 2 Superintendent of CBI, EOW,Mumbai 3.State of Maharashtra ...Respondents Mr.Shirish Gupte, Sr.Counsel i/b Mr.R.R.Shah Advocate for the petitioner Mr.H.V.Mehta for respondent nos.1 and 2 Ms A.T.Javeri, A.P.P for the State CRIMINAL WRIT PETITION NO.737 OF 2005 Subhash Chand Rastogi ...Petitioner vs. 1 Union of India 2 Superintendent of CBI, EOW, Mumbai 3 State of Maharashtra. ...Respondents Mr.Ashok P.Mundagi, Sr.Counsel with Mr.V.M.Advani and Mr.A.M.Sachwani & H.J.Heers for the petitioner 2 Mr.H.V.Mehta for respondent nos.1 and 2 Ms A.T.Javeri, A.P.P for State. CORAM :A.S.OKA,J. DATE OF HEARING THE LAST ARGUMENT :10TH JULY 2009 DATE OF PRONOUNCEMENT OF JUDGMENT : 15TH OCTOBER 2009 JUDGMENT : 1 These petitions can be conveniently disposed of by a common Judgment and order. 2 The petitioner in these petitions is the same. In Writ Petition no.664 of 2009 ,the petitioner has invoked section 482 of the Code of Criminal Procedure,1973 (hereinafter referred to as the said Code) for quashing the criminal proceedings in R.C.No.10/E/2000 (Sessions Case No.70 of 2003). The petitioner has been arraigned as accused no.15. The accused have been charged with offence under section 120-B r/w section 420 of the Indian Penal Code as well as section 13(2) r/w section 13(1) (b) of the Prevention of Corruption Act, 1988. In writ petition no.735 of 2005, the petitioner has invoked section 482 of the said Code for quashing the criminal proceedings in R.C./11/E/2000 (Sessions Case No.71/2003.) 3 As far as writ petition no.664 of 2009 is concerned, the proceedings started on the basis of the show cause notice issued to 3 M/s Gulista Impex Limited, M/s.Unimac India Limited, Sobat India Limited and others under Rule 16 of the Customs and Central Excise Drawback Rules,1995. Notice was issued by the Assistant Commissioner of Customs. The allegation is that M/s.Unimac India Ltd , M/s.Gulishta Impex Limited and M/s. Sobal (I) Limited exported bicycle parts in 1995 through Mumbai and Madras Ports. The allegation in the notice was that the bicycle parts exported by the aforesaid companies were grossly over-invoiced. The allegation is that the over invoicing was so high that the drawback amount claimed by the companies could be more than the market value. It is alleged that under the provisions of the Customs Act, 1962 no drawback shall be allowed in respect of any goods, the market price of which is less than the amount of drawback due thereon. It is stated that the said company is not entitled to claim drawback. But large amounts were paid to the said company is by way of drawback. The amounts were erroneously paid against fraudulent exports. It is stated in the petition that an order was passed by the Commissioner of Customs exonerating the said companies. The said order was confirmed in an appeal preferred by the Commissioner of Customs before the CEGAT. In the month of September 2003 the cognizance of the case was taken by the Sessions court. The Commissioner of Customs preferred an appeal before Apex Court for challenging the order passed by the CEGAT. An order of remand was passed by the Apex Court by directing the CESTAT to pass a fresh order. An application for intervention made by the second respondent CBI was not entertained by the Apex Court by reserving a liberty in favour of 4 the second respondent CBI to move a similar application before the CESTAT. After remand the earlier order passed on show cause notice was confirmed. The order of CESTAT was confirmed by the Apex Court. The allegation made by the CBI is that the aforesaid three companies and their respective directors entered into a criminal conspiracy. The object of the conspiracy was to cheat the Government of India by over invoicing exports of bicycle parts to Russia and Hong Kong with dishonest intention to claim excess custom duty drawback against such exports thereby causing wrongful loss to the Government and corresponding wrongful gain to themselves. Along with the directors of the said company, officers of the concerned department were shown as accused and were charged with offences punishable under section 120-B read with section 420 of the Indian Penal Code and under section 13 (2) read with section 13 (1) (d) of the Prevention of Corruption Act, 1988. 4 As far as writ petition 737 of 2009 is concerned, the petitioner who is arraigned as accused no.12 is being prosecuted for identical offence involving identical allegations against the another company M/s. Sumangal Overseas Limited. However, in this case there is no adjudication made on the basis of a show cause notice. 5 The learned senior counsel in support of the writ petition no. 664 of 2009 submitted that adjudication was made on the show cause notice and the proceedings were dropped. In an appeal preferred by the Commissioner of Customs before the Central Excise 5 and Gold (Control) Appellate Tribunal (CEGAT), the order of adjudication was confirmed. Against the order of CEGAT, Commissioner of Customs moved the Apex Court. Apex Court passed an order of remand with a direction to pass a fresh order. After remand, the matter was heard and earlier order of adjudication was confirmed. Thereafter, an Appeal was preferred before the Apex Court which was dismissed. His submission is that the Competent Authority has come to the conclusion that the allegation of over invoicing with object of claiming excess duty drawback has not been established. He submitted that on the same set of facts, the petitioner cannot be prosecuted. He placed reliance on the decision of this court in case of Manojkumar Sarangi Vs.Deputy Commissioner of Customs (P) R & I in Criminal Writ Petition no.1812 of 2005 decided on 29th June 2007. He placed reliance on the decision of the Apex Court in the case of Uttam Chand & others Vs. Income Tax Officer, Central Circle [1982 (133) ITR 909 (SC)]. He relied upon the decision of this court in the case of Raichand C. Jain Vs.Surendra Prasad (Criminal Application no.1792 of 2003 decided on 21st February 2006). He lastly relied upon the decision of Apex Court in case Zandu Pharmaceutical Works Ltd and others Vs. Mohd. Sharaful Haque and others (AIR 2005 SC page 9). 6 The learned counsel for the respondents submitted that there is a prima facie material to proceeds against the petitioner in these petitions and even before the evidence is adduced by the prosecution, the proceedings of the criminal case cannot be quashed 6 especially when the offence is under the provisions of the Prevention of Corruption Act,1988. 7 As far as writ petition no.737 of 2005 is concerned, the learned senior counsel in support of the petition submitted that though there is no adjudication made by the Statutory Authority in this case, the allegations of the prosecution are virtually identical. He submitted that the allegations in this case are based on documents which are similar to the documents in companion case. He submitted that merely because there is no adjudication by the statutory authorities in this case, it will not make any difference in as much as in the companion case similar allegations could not be established. He submitted that this is a fit case to exercise power under section 482 of the said Code. 8 The learned counsel for the respondents in the writ petition no. 737 of 2005 submitted that in any case in the facts of the case, there is no adjudication made by the authorities. Therefore, by no stretch of imagination power of quashing can be exercised. 9 The learned senior counsel appearing in writ petition no.664 of 2009 pointed out that though liberty was granted by the Apex Court to the second respondent (Central Bureau of Investigation, Economic Offences wing) to file intervention application before the Central Excise Gold (Control) Appellate Tribunal, no such application was filed. He submitted that in both the cases, the Customs Department 7 has not taken any steps. 10 I have carefully considered the submissions. It must be noted here that as far as writ petition no.664 of 2009 is concerned, the ground for quashing is based on the adjudication made by the Commissioner of Customs, Excise & Service Tax Appellate Tribunal, Mumbai . Along with charge sheet, statements of number of witnesses as well as various documents have been produced. The adjudication made by the Commissioner of Customs is on the basis of show cause notice. The allegation is of over invoicing of the goods exported to Russia and Hongkong with the object of claiming excess duty drawback. Whether there was over invoicing or not is a question of fact which will have to be determined on the basis of evidence adduced by the prosecution. There is a finding of the Commissioner of Customs, Excise & Service Tax Appellate Tribunal, Mumbai on this aspect. There are statements of 65 witnesses produced along with the chargesheet. There are documents running into more than 1400 pages. As of today it is not possible to determine whether the same documents were considered by the authorities. The question of over invoicing is a question of fact which will have to be determined on the basis of evidence which may be adduced by the prosecution. If the chargesheet is perused it cannot be said that there is no material to proceed against the petitioner. The question whether the petitioner was a director of the concerned companies can be decided only on evidence. Moreover, section 120- B of the Indian Penal Code has been applied and the offences 8 alleged are also under the Prevention of Corruption Act,1988. Only on the basis of adjudication made on show cause notice, at this stage when even charges not framed, power under section 482 of the said code cannot be exercised. 11 In the second petition, admittedly there is no adjudication made by the authorities. Even in the said case there is voluminous material produced alongwith the chargesheet. The said case is also pending at the stage of framing charge. 12 In both the cases the amounts of alleged drawback benefit are very large. It is well settled that power under section 482 of the said code has to exercised sparingly and in rare cases. Considering the nature of allegations and material forming part of the charge sheet it is not a case where power under section 482 of the said Code can be invoked. Hence, the petitions deserve to be dismissed. It is however made clear that the dismissal of the petitions shall not be construed as any finding recorded on merits of the case. All contentions of the petitioner including the contentions which can be raised at the stage of framing charge are expressly kept open. 13 Hence, I pass following order: . Writ petitions are dismissed. Ad-interim relief granted earlier will continue to operate till 31st December 2009. JUDGE