The High Court · 2025

counsel for the Respondent No.i : sRt ANGOTHU NEHRu (sc FoR GENTRAL Go\/'o Counsel for the Respondent No.2:SRt DOM|N|C FERNANDES, Sr.SC FOR CBIC The Qourt made the fofioving: ORDER 1 TIIE HOT{'BLE SRI JUSTICE P.SAII KOSIIY THE IIOtrt'BLE SRI JUSTICT SUDDAI,A CHALAPATIII RAO w.P. O R D R:fPer tte Hon'bte Sti Ju.stie Svdnda Clalapathi RoD) The present Writ Petition is filed assailing the order of the 2".d respondeqt in C.No,FCCO lt,GLl }OMP I 06 /2o23-lre4"Iat, and illegal, and dt.O4.L2.2O24 as a$ip31Y, of the petitioner, consequenily allciw the dt.25.10.2016, for compounding of the offences in terms of Section 137 of the Customs Act, 1962 (for short the ActJ read u,ith Rul,e a(3f of the Customs (Compounding of Offences) Rules, 2OO5 (for short'the RulesJ.

2. The petitioner was employed with Emirates Airlines, as Cabin Attendant and was frequently visiting India on oflicial duty' While so, on 09.O4.2014 upon her arrival from Dubai by Flight No.EK-526 at Rajiv Gandhi International Airport, Sharnshabad, Hyderabad, the Customs (Air Intelligence Unit) Officers intercepted her at the Exit Gate of the arrival hall of the Airport' On inspection of her handbag, after she passed througtr the Customs Green Channel, the authorities found 13 gold bars ci 1 lrg each 2 and 5 mobile phones and on enquiry, the petitioner denied the knowledge of the said items and.stated ttrat one Mr.Shujat i{li who was also travelling in the same flight, kept few packets in her hand bag at Dubai making her to believe that the said packets contained mobile phones and he would collect them after reaching Hyderabad.

3. The petitioner further eontended that her statement was recorded on thi same day and Ulg authorities registered a case alleglng that the petitioner, in connivance with one Mr.Shujat Ari Mohammed, has attempted to smuggle 13 gold bars wort*r of Rs.3,75,76, 175/- along with tive HTC Mobile phones valued. at Rs.1,25,OOO/- by evading custom duties in contravention of Sections 11,72 & 79 of.the Act, ttre F.oreign Trade policy 2OO}_L4 and Sections 3(3} of tl e Foreign Trade (Development and Regulation) Act, Lgg2. Thereafter, the customs authsrities arrested her and produced before the cornpetent jurisdictional Magistrate on the sarne day i.e., on OL.O4.2OI4 arld she was remanded to judicial custody While so, Mr.Shujat Ali from the customs area and left for Dubai on the same day, and subsequen0y he was brought escaped undetected \ L 3 back to India. The case is pending adjudication before the competent Court of law. 4- The petitioner further contends that subsequently, the authorities issued a show-cause notice, dt-O7.10.20i4, to the proposmg ol' seized goods under Sections 111{1) and 111(d) of the Act artcl Sections ll2 and 114AA of the Act. Further, the Adjudicating of penalty under Offrcer vide Order-in-Original, dt-2g.O7.2016 uide No'78/201-6- Adjn.Cus(ADCt, ordered confiscation of 13 Gold Bars weighing 1 Kg. each, valued at Rs.3,75,76,L751- and also (05) HTC Mqbile Phones valued at Rs. 1,25,0OO/-, imposing redemption line of Rs.37,5O,OOO/- on the petitioner and penalty of Rs'18,OO,OOO/- each on the petitioner and Mr.Shujat Ali Mohammed, under Sections 114AA and 112(a)(i) of the Act' tt is furttrer contended by the petitioner that she had paid 5. customs duty, penatty along with redemption fine imposed and gold wa.s released to the petitioner. Thereafter, t prosecution was launched and after investigation, charge sheet was laid in CC.No.25/2o19, on the file of Special Judge for Trial of Cases under Economic Offences, Hyderabad, agaiflst both the 4 petitioner and Mr.Shujat Ali MohammEd, and the said case is pending adjudication. 6 The petitioner further rcontended that pending of the CC., she had filed an application, dt.2S. 10.2016, for compounding of .offences in cc.No.2s/2or9 before the lst Respondent i.e., the Chief Commissioner of Customs, Hyderabad, undbr Sbction 187 of the Act r/w Rule a(3) of the Rules, and that ttre said application was rejected uide order dt.O2.O2.2OlZ in C.No.VIII/48/ 52 / 20 t6;Cus_CC(HZ).

7. Petitioner further contends that assailing the rejection order passed by the Compounding Authorier, the petitioner had approached th,is Court by filing a writ petition urde W.p.No.g349 of 2017, whieh was dismissed by giving liberty to the avail the remed5r of appeat before the Customs, Centr.al Excise and serrrice Tax Appe[ate Tribunar. pursuant thereto, ttre petitioner filed Customs Appeal No.30266y'2o18 before the Appetrate ltibunal and ttre learned Tribunal aide order No.A/30O39/2O23 remanded tJ.e matter to the Chief Comrnissione.r/prinaipal Chief Commissioner, to decide the application of the petitioner by glrring an opportrrnity of hearing to the petitioner. The said order was 5 by the 13t before ttris Court in CEA.No.5/2O23, which was disanissed on O4'O9'2O23 and aggrieyed ttrereby, SLP No.1144212O24 was filed by ttre tr* respondent before the Hon'ble Ape:r Court, and the said SLP was dismissed on 15.04.2024.

8. Pursuhnt to the remand b5r the Appellate Tribunal, the 2d respondent, after due enquiry 'and consideration, uid'e order dt.O4.L2.2O24 once-again rejected the petitioner's compounding application in the light of the judgment of the Apex Court in Union o! Indla a. Anll Chanand and aggrieved ttrereby, the present Writ Petition has been filed-

9. We have given earnest to the submissions made by Sri Vedula Srinivas, learned Senior Counsel representing Sri S.J.A.Nadeem, for the petitioner, Sri A'Nehru, learned Standing Counsel appearing for respondent No'l, Sri Dominic Fernandaz, learned Standing Counsel appearmg for respondent No.2, and perused the material on record.

10. Now the point for consideration before us is, whether the 2"4 respondent has properly appreciated the facts by applying the r 2008(4) SCC 175 6 principles laid down by the Hon,ble Apex Court in Anlt Ahanantds case(l supra), and whether the dismissal of tlie application, dt-25.1O.2O16 for compormding of offences, is just and valid? 1 1. The findings of the 2\d respondent in rejecting the petitioner's compounding application is extracted hereunder for ready reference and '13' In uteut of tte aboue disqtssions, I haue no hesitation in anduding that tle 1utplicant herein has not mad.e a fiue and. fut! dbdosure of the.fa* -a ter appliation. Her uersion has been awgiri lrom time-to-time and from Duen in tle written sabmission dafed. 28.11.2024 rahetein she lws ame forutard. to a@pt her guitt, there is na d.i.sdosure of the acfuat sequene of euents and. onlg a referene to tlrc panclwnama d.ated O9.O4.2O14 is nwde. It bearc ra reiteration fi,wt no reasonable person of otdinary prudene unuld mistalee a pa&age antaintq, 13 fus of Gotd for a pdc.tcage ontainhg ell plwaq utfiiclt are much tighter h urei.sltt, that too, ulan sach a pacleoge is in tle hand baggage. Tlats, it is apparent *1ot the Applicottt l:us, at no sfuge, made a true disctasare artd euen in these pr@edittgs appears to luue ame fonlard ta a@pt her guitt in order to somelow obtain a fawurable decision utd. seatrc tmmunitg from proseattion., \ \ 7 L2. Sri Vedula Srinivas, learned Senior Counsel appearing for the petitioner contended that the only test put forth for compounding of offences by the Honble Apex Court in the case of Anll Cttotnana's case(l supra) is that i/ the applicant should be one time evader, d/ she/he.has to make a clean breast of aJfairs, and iiil she/he has to grve extraustive account of the circumstances, in whictr stre/he.came to India, and that thq 2na respondent, despite ttre petitioner fullilling the said criteria, dismissed the application of the petitioner under misconception of facts and law. IS

13. Iearned senior counsel further contends that the petitioner being the first time evader and also as the Principal of Crrstoms, Hyderabad vid.e . tepott in C.No.I/10/65/2016-Pros., dt.gO.L2.2OL6, confrmed the correctness of the application and ir$er alia informed that the applicant had paid customs duty of Rs.1,19,71,947/-, redemption frne of Rs.37,SO,OOO /- rrrrd totat penalty of Rs'36,OO,OOO/- as per dt-29.o7.20L6 uide TR6 Challan' dt.12.08.iO16 and pursuant thereto, seized gold was released and that the petitioner has disclosed all the information without there laid down bY the being any concealment. Thus, the (1r Hon:ble Apex Court in Anll case(l supra) would squarely apply to the present cabe,.anrd the impugned oider, does not stand judicial scrutiny.

14. Per contrq learned Standing Counsel for the 2nd respondent would submit that payment of fenalties dnd releases of goods do not automatically entitle an applicant for compounding of offences. The application filed by the petitioner for compounding is to be dealt independenfly. 15' Further' the learned senior starding counsel submits trrat if only the petitioner had made furl and truthfur discrosure of the facts sequentially, the petitioner is entitled to the relief as claimed. Further contended that the 2na respondent after considering the contradictions, pardcularly those noted in paragraph 12.4 of the impqgned order, opined that the petitir:ner has been changing her version from time to time by glvins inconsistent statements to suit her convenience and failed to furnish a complete and truthful account of tl-re circumstances, and the 2.d responderrt is justified in disrnissing the application as the petitioner has not made a full and truthfut disclosure of facts and the impugned order warrants no interference by thirs Court. 9

16. Having considered the rival submissions and the record, it is evident that the Principal Cononrissioner's report has revealed that the petitioner as a first-time offender and genuineness of the

17. The Principal Couutrissioner has reported that ttre petitioner is first time evader. Now the only issue for 15, whether tlre petitioner has made a frrll and truthful disclostre of facts, so as to qualify for cornpounding of the offences in light of the principles laid down by the Hon'ble Apex Court in AnlI Chanartds Case(suPra).

18. tn the light of the above, so as to arrive at a just conclusion, the statements and versions made by the applicant at various levels as extracted in the impugned order at Para 12'4 are hereby "i) ii) ii1) In the Panchanama dtS9.O4.2OL4, tJle Applicant had cLaimed that ttre Gold was handed over by an unknown person, whereas in her Statement recorded on the d"y, after seizure, she identilied Shri Shujat Ali ""ro" as the person who had handed orrcr tlee C}'old. It has been claimed by the Applicant that she was tricked into believing that the packages handed over to her by Shri Shujat Ali contained cell phones. As per Panchanama dt.o9.o4.2oL4, tlre Gold was recoiered from the hand baggage of the Applicant' In her reply, dt.O4.l2.2}l4 filed before the adjudicating 10 ln her first bail authority, the Applicant has subrnitted that Shri Sujath Ali had kept the package, from which the Gold was recovered, in her stroller bag in her own presence This position is also stated in her first Statement, dt.09.04.2014. dt.1t.o4.2014 t has submitted before tl.e Economic Offences Court that Shri Shujat Ali, after landing at Hyderabad, had given her one bag to hold from which 13 Gold Bars wetre recovered. In tlee second bail application dt.O2.OS .2O14, itts stared that the bag was handed over to her at Dubai by Shri Shujat Ali. The same position has been reiterated in the bail application dated 14.O5.2O14. it) The Applicant^lT ,*^*qfga her stance regarding 4e point of seizure of CoH"from her. While in the panchanama dated O9.O+.ZO1+, ii-L-o_.aed that she was intercepted- and Gold was seizeJ from her after stre had crossed. the Green ch;"ui. Hovrever, in the proceedings before the adjudicating a"ttr".ity, ;;; been stated that she ,r.u"i.-""J ?he creen Channel and that interception and seizure was made before that.' -i; lg. A bare reading of the above contradictions reveals material inconsistencies. The .cl;aim of the petitioner in her cornpounding application that she was unaware of the gold bars contradicts her earlier statements in the customs proc€edings cause notice dt.OZ.l0.2ol4, initiated vide show into the Order-in- Original, dt.2g.O7.2OL6. The changing versions of the as to suit her convenience, be it at the stage of seizure, issuance of show-cause notice, or during the creates serious dou,bt as to the credibility of her version and SO \ 11 negate her claim of making futl and complete disclosure of factual events.

20. More $, even in thb compounding application, dt.25.10.2016, ttre petitioner has casually stated the facts, as if she is deemed to be entitled for compounding of offences, and ttris creates a serious doubt in the mind of this Court, as to the of the case. truthful disclosure of facts and Further, the changing versions of tlre petitioner at all stages of the case and ttre casual narration of facts indicate that the petitioner has fited the application for compounding, as if she is deemed to be entitled for compounding of offencei.

21. At the cost of repetition, the Hon'bte Supreme Court in Anil Cll.ananta's case(l supraf, set out the conditions for allowing application for.compounding offence under Sec 137 of Customs Act r/w .Rufe (3| of Customs. (Compounding) Rules 2005 i.e., i/ the applicant should be one time evader, ii/ he/she has to make a clean breast of his alfairs, and iii/ he/she has to give exhaustive account of the circumstances, in which he/she came to India.

22. Furtlrer, a Division Bench of ttris Court(to uthich one of us (PSK,J) i.s a Member/ in Shr{. Moltammed Ismall Syed as t2 l,.a^ Pt'lnc:tpa.l Chtef Commlssloner O/ GST And, othersc following tJre ratio laid down in Anll Chanana,s case (1 supra), Deepesh Mamodlga a; ChteJ Commlssloner o! Crtstottt-{Dea, Aggarwal v. tlnlon of and Asslstanf, Commtssioner of Cnstoms, Ptpseqttlon Cefi, &*,oms Hquse, Cochln u, Edutln Mlnlhans, held that that substantial contradictions between statements under Section l0g and the compound.ing application justify rejection. In tlie present case, the petitioner has failed to substantiate her case.

23. In view of the above contradictions and following the law down by the Apex Court in Anit Chananc,s case (1 supra),and the judgrnent of the Division Bench of this Cotrrt in SftrL Ismall syeds case(2 supna) and arso the Iaw raid down iz Ilemant Aggarwats case(4 supra), we are of the considered opinion that the petitibraer has fa,ed to rnake a furl and exhaustive disclosure of facts and filed the application only to evade criminal and as such, she is not entitled. to the relief of compounding. Thus, the find.ings arrived at by the 2na in tl-e impugned order are proper and justified, warranting no z W_P.No.4996 of 2025, dt. t9.O3.2O25 :yii;l#s#::-irl11,T;i1iie?,'&'J..,l;s".,Ti jlH,"""#lt, r3 rnterference by this Court. He the writ petitioner and * *,.,JI;:t H;:"*"* against Accordirlgly. the Writ petitioh 24 costs. is dismissed. No orddr as to As sequel thereto, miscellaneous shaII stand closed. petitions, if iuly, .pending //TRUE COPYII One faircopy to the Hon'ble Sri Justice (for His Lordships Kind SEGTrclN, Koshy ' OFFICER One faircopy To, 1 ' Iis &"r":tary, 'I*8#ff Btf HYderabid - 5 RCo (Revenue) (customs and csT), North Brock, New Derhi - Hfifff ma:mr,"ll,:,ln8s:rTff i"^:T,.s:f;n?,,* rqul o{'atllum Koad

3. One CC to SRI S.J.A.NADEEM, Advocate. tOpUCl 4. ONE CC tO SRI ANGOTFIU NEHRU (SC FOR CENTRAL GO,') IOPUCJ 5' One cc to sRr DoMrNrc FERNANDES, Seniorstanding . . : cBtc. IoPUCI "ornr"iar- 7' The under secretary, unbn of rndia, Ministry of Law, Justide and - : A Company Affairs, w6w Oefri o' Adrrccates' Associatirrn Library, Hish court Buitdinss; i I I tiffi"ffi:?Yry, 9. Two CD Copies BSK wLS . { HIGH COURT DATED:31 l10l2O2S ORDER WP.No.26986 of 2O2S ct1 THE S 14 I$ ( o 2 2 ttou 296 * r.' I rreO DISMISiSING THE WRIT PETITION WITHOUT COSTS I It l14-