The appellants / accused were convicted under Section 132 and 135(1)(a) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and the 1st accused company was convicted and sentenced to pay a fine of Rs.5,000 under Section 132 and to pay a fine of Rs. 5,000 under Section 135(1)(a) of the Customs Act.
The case of the prosecution is that one M/s. Penshibabo Wang Pvt.Ltd. had filed a bill of entry No.331475, dated 12.10.2009 for clearing Bio fertilizer under Chapter 31 of the Customs Tariff Act, 1975.
It was brought to the notice that several companies were importing insecticide by declaring it as fertilizers under chapter 31 instead of under chapter 38. But, import of insecticide is covered under the schedule to the Insecticide Act, 1968. It could be imported only if the importer registered himself with the Central Insecticide Board. Import without such registration attracts prohibition under Section 7 of the Insecticide Act and also it is a violation of the import policy and the Foreign Trade (Development and Regulation) Act, 1992.
The adjudicating authority passed an order would whereby the goods imported vide bill of entry No.331475, dated 12.10.2009 was valued at Rs.67,47,325/ and it was confiscated u/s 111(d) and (m) of the Customs Act, 1962 r/w Section 17 of the Insecticides Act. Permission for re export on payment of redemptions fine of Rs. 5 lakhs was also ordered. Penalty of Rs.2,50,000/ was also imposed on M/s. Penshibao Wang Pvt. Ltd.
Shabnam Banu and T Sushil Sarayu, appeared for the appellants-accused and Special Public Prosecutor N P Kumar, appeared for the respondent-state.
The following observations were made regarding the conduct of trial by the lower court in which the appellant was convicted :–
1. It is a peculiar case wherein the primary fact being that there has been a dispute whether or not the import by the appellants is an insecticide or a bio fertilizer but the punishment that has been fastened is under the Customs Act after coming to a conclusion that the import was of an insecticide.
2. The conclusion that the import was an insecticide was drawn by the Judge without any due procedure.
3. Pleadings and statements before Customs, Excise and Sales Tax Appellate Tribunal were taken as is by the trial court, even though the same was not binding for trial courts.
4. No observation on delay of 3 years in commencing prosecution was recorded by the trial court.
It was observed by the Sessions Court in this regard that, “This clearly shows that this was an afterthought of the complainant and they have merely taken recourse through criminal courts after the appeal was decided by the appellate tribunal.”
5. Appellants have been put under trial twice, by the appellate tribunal and the trial court.
6. No procedure was followed while collecting import samples for testing.
7. Failure to produce Authorization/Search warrants.
8. Marking of documents without examining the author.
9. Secondary documents such as e-mail conversations marked as exhibits without the production of a certificate under Section 65B of Evidence Act.
10. Establishment of mens rea or guilty mind of accused by relying on inadmissible evidence (email conversations).
11. In the given backdrop of the facts, even though the trial court Judge has acquitted the Appellants from the offense of Section 17 of Insecticide Act but has chosen to rely upon the Schedule of the same Act to convict them under Section 132 and Section 135 (1) (a) of the Customs Act, 1962.
12. Lab report from private laboratory admitted as evidence.
For the aforesaid reasons among other factors, the Court of Sessions at the Principal Sessions Judge S Alli set aside the conviction of the accused.
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