Misuse Green Channel at Airport, Face Prosecution
Times of India
NEW DELHI, Jan 30: Supreme Court has put a full stop on people using the green channel to bring in goods without paying duty. Monday's ruling undercuts the assumption of those taking the "green channel" when they should be using the "red" that they can, if caught, get away by paying the customs duty and a fine.
Writing the judgment for the Bench, Justice Kapadia agreed with solicitor-general G E Vahanvati that compounding of offence — it enables offenders to escape punishment if they cough up penalty — is based on "Principles of Disclosure" which come into force only if the declaration is honest. "The basic rule of disclosure underlying Section 137(3) of the Act is that if there are demonstrable contradictions or inconsistencies or incompleteness in the case of the applicant, then application for compounding cannot be entertained. Applications for compounding ought to be disallowed if there are such contradictions, inconsistencies or incompleteness," it said.
This ruling came in a case pertaining to one Anil Chanana, who was intercepted by customs officials at IGI airport on August 10, 2004. On personal search, he was found to have smuggled in two pairs of diamond ear-rings worth Rs 1.16 crore.
He was arrested as he had not mentioned the ear-rings in his declaration form and had aggravated the crime by taking the "green channel", which is meant for those who have nothing to declare. Four days after his arrest, he voluntarily deposited the customs duty of Rs 47.72 lakh. He was later released on bail.
In his first bail application in August 2004, he accused the DRI officials of forcibly taking him through the "green channel" when he was intending to take the "red channel". In January 2006, he moved the authorities for compounding of the offence saying that he took the "green channel" by oversight as he was tired.
The compounding authority allowed the application imposing an additional fine of Rs 15 lakh on Chanana. The government challenged the decision before the Delhi High Court, which rejected its plea.
Before the apex court, Vahanvati argued that a person who knowingly makes a false declaration with regard to dutiable goods solely to evade customs duty has committed offences punishable under Section 132 and 135(1) of the Customs Act.
Agreeing with the SG, the Bench said the contradictions in the two versions given by Chanana made the application for compounding of the offence liable to be rejected.
While deprecating Chanana's conduct, the Bench also rapped the compounding authority for not discharging its duty of making a proper inquiry before accepting the defaulter's request. "The compounding mechanism is to be allowed in cases of doubtful benefit to the revenue and to prevent needless proliferation of litigation and holding up collections," the court said.
"Compounding cannot be allowed if there are apparent contradictions, inconsistencies or incompleteness in the case of the applicant before the Compounding Authority. It is the duty of the Compounding Authority to ascertain such contradictions before ordering compounding," it said.