Arvind Chandrakant Kadam vs. Union Of INDIA

Facts

The applicant, Arvind Chandrakant Kadam, was intercepted by DRI officers on January 6, 2024, at Deen Dayal Upadhyay Junction Railway Station, along with co-accused Amit Srirang Jadhav, in connection with smuggled golden bars. A search yielded 16 golden bars valued at Rs. 1,66,27,499/- from the applicant and 4 golden bars valued at Rs. 41,56,640/- from the co-accused. The applicant claims to be innocent and states he runs a jewellery shop. He allegedly confessed to receiving the gold on January 5, 2024, from an unknown person at Kamakhya and intended to deliver it to one Mustafa. The prosecution contends the gold is foreign and smuggled. The applicant's bail application was rejected by the Sessions Court. This bail application is before the High Court.

Held

The Court allowed the bail application. The Court considered the rival submissions and the entire record. It noted that the trial had not yet commenced, and the applicant's complicity was yet to be determined. The seized gold remained in the possession of the Department. The offence appeared to be compoundable by virtue of Section 137(3) of the Customs Act. There was nothing on record to suggest that the applicant, if enlarged on bail, would adversely affect the trial. The applicant had no criminal antecedents. He expressed willingness and readiness to deposit the adequate customs duty over the gold. The applicant had been in jail since January 7, 2024. Without commenting on the merits of the case, the Court was of the opinion that the applicant had made out a case for bail. The applicant was released on bail subject to furnishing a personal bond and two sureties, appearing before the trial court, not committing similar offences, not inducing or threatening witnesses, not indulging in criminal/anti-social activities, and surrendering his passport.

Key Issues

1. Whether the alleged confession made by the applicant before DRI officers is admissible and reliable, given the applicant's claim of false implication and the alleged lack of corroborative evidence? (Question of law and fact, turning on Section 108 of the Customs Act, 1962). 2. Whether the recovered gold falls under the 'restricted' or 'prohibited' category, and if it is 'restricted', does it necessitate only payment of customs duty? (Question of law, turning on the classification of goods under the Customs Act, 1962). 3. Whether the offence alleged is compoundable, and if so, can the applicant be granted bail on willingness to pay customs duty? (Question of law, turning on Section 114 and Section 137(3) of the Customs Act, 1962). 4. Whether the value of the recovered gold, being less than Rupees Two Crores, precludes prosecution or warrants bail, considering the Circular No. 13/22-Customs? (Question of law, turning on Circular No. 13/22-Customs and Section 135 of the Customs Act, 1962). Petitioner's Arguments: The applicant is innocent, falsely implicated, and has no concern with the alleged offence. The alleged confession is false. No smuggled gold was recovered. The offence under Section 135 of the Customs Act is punishable only up to one year. The investigation is faulty. The recovered gold is 'restricted' and requires only customs duty. The offence is compoundable under Section 114 of the Customs Act, and the applicant is willing to pay duty. A compounding notice was issued. The purpose of the Act is recovery, not punishment. The order rejecting bail is illegal. The co-accused was granted bail. Circular No. 13/22-Customs states prosecution should be launched only in exceptional situations, with the threshold for arrest now being Rupees Two Crores. The applicant has been in jail since January 7, 2024. Revenue's Arguments: The recovered gold is of huge quantity, falls within the 'prohibited category', and its market price exceeds Rupees One and a half Crore. No plausible explanation for possession was offered. The applicant was intercepted based on cogent information and involved in smuggling. Prosecution complied with statutory provisions. The applicant acted as a carrier. The offence is not bailable as the value exceeds Rupees One Crore. The value is not material, but the gold being in the prohibited category is key. No notice for compounding was sent; the notice dated January 31, 2024, is under Section 150, not for compounding. The offence under Section 135(i)(A) is punishable with seven years imprisonment, not one year. The purpose of the Act is punishment as well as recovery. Section 125 of the Customs Act gives discretion to the adjudicating officer to offer an option to pay fine in lieu of confiscation, which has not been exercised.