IMPORTANT POINT
The immunity granted by Settlement Commission from fine, penalty and prosecution under the provisions of Customs Act, 1962 and Indian Penal Code are matters which pertain to the jurisdiction of the Settlement Commission but the revocation of the preventive detention order issued in respect of the detenu is different issue and not governed by the provisions of Section 127F(2) of the Customs Act.

Headnote:PREVENTIVE DETENTION—Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974—Section 3(1)—Customs Act, 1962—Sections 127B to 127J—Detention order u/s 3(1) of COFEPOSA Act—Revocation of order on ground that customs duty which was required to be paid by detenu before execution of detention order was paid by them—Petitioner and his brother were arrested by the Intelligence Officers, DRI on allegations that they have been indulging in import of high quality and high value Ball Bearing and were clearing the same by evading duty of custom—Detention orders issued u/s 3(1) COFEPOSA Act against petitioner and his brother—Petitioner filed application for settlement u/s 127B of Customs Act —At the stage of admission hearing, Settlement Commission was urged to make recommendation to the Detaining Authority for the revocation of the Detention Order—Settlement Commission settled the case on payment of Custom Duty and granted immunity to all the applicants including the petitioner from any penalty that could be levied under the Customs Act—However Settlement Commission rejected the prayer to recommend to the Detaining Authority for revocation of Detention Order—Writ petition filed for quashing the detention order—Whether impugned order of detention is liable to be quashed considering order passed by the Settlement Commission granting immunity from fine/penalty—(No)—Immunity granted by the Settlement Commission from fine, penalty and prosecution under Customs Act have no bearing on order of detention passed under COFEPOSA Act—However, detention order against petitioner quashed considering peculiar facts and circumstances of the case—Constitution of India—Article 32.
       Held : The admittance of the case and imposition/condonation of fine or penalty is the prerogative of the Settlement Commission and application praying immunity from fine/penalty and prosecution are matters pertains to the jurisdiction of the Settlement Commission but the revocation of the detention order issued in respect of the detenu is different issue and not governed by the provisions of Section 127F(2) of the Customs Act. (Para 32)
       Nowhere it is stated in the provisions of Section 127H of the Customs Act, 1962 and in the order of the Settlement Commission dated 08.03.2006 that the opportunity of further indulgence in smuggling activities is sealed or plugged. In our view, the Settlement Commissioner’s order only dealt with true and full disclosure of the disputed duty and acceptance of the entire duty, liability by the petitioner and his brother. Nowhere it is mentioned in the Settlement Commission’s order that the petitioner would not indulge in smuggling of goods in future. Therefore, in order to prevent the detenu from indulging in smuggling activities, the said detention order was passed and there is no illegality in the detention order. In the instant case, the customs duty of Rs.1.4 crores was sought to be evaded by the petitioner and his brother was accepted in full by them. This acceptance of entire duty demanded in the impugned show cause notice was interpreted as full and true disclosure by the Settlement Commission and as such the petitioner and the co-applicants were directed to pay the said amount of duty during the Settlement Commission proceedings. The said customs duty of Rs.1.4 crores was expected to be paid by the petitioner and others at the time of import of the impugned consignments during September, 2004. However, the said amount of evaded customs duty was ordered to be paid in the month of March, 2006 by the Settlement Commission. The Settlement Commission, while extending the benefits as envisaged in the true spirit of settlement, have granted immunity from fine, penalty and prosecution under the Customs Act, 1962 and IPC. The final order of the Settlement Commission has, by no means, undermined the surroundings of the offence committed by the petitioner and his brother.(Para 36)
       In the instant case, the petitioner’s brother has already been released on the ground there was no sufficient cause for the detention of the detenu under Section 3(1) of the Act. The Government also accordingly revoked the detention order issued against him and the Government of Maharashtra, after considering the report of the Advisory Board and the material on record and in exercise of the powers conferred by Section 8(f) of the COFEPOSA Act revoked the aforesaid detention order and further directed that Kamlesh Navinchandra Shah be released forthwith on receipt of the said order dated 05.06.2006. In our opinion, the petitioner before us who is also similarly placed and who has also paid the customs duty etc. pursuant to the order of the Settlement Commission and got the unconditional immunity by the Settlement Commission is entitled to the same treatment. At the time of hearing, it is pointed out that the petitioner has ceased his activities in the field of import or export and has already paid the tax with penalty as demanded by the authority and there is nothing on record that the appellant has indulged in any such activity in the recent past. It is settled by law that the purpose of passing the detention order is to prevent the detenu from continuing his prejudicial activity but not to punish him. Considering the peculiar facts and circumstances of the case, no purpose will be served by continuing the detention order and we, therefore, allow the writ petition and quash and set aside the detention order.(Paras 44 and 45)

JUDGMENT

Dr. AR. Lakshmanan, J.—The above writ petition was filed under Article 32 of the Constitution of India for issuance of a Writ of Habeas Corpus or any other appropriate writ quashing and setting aside the order of detention dated 12.01.2005 under COFEPOSA Act, 1974 issued against the petitioner by respondent No.2 - Principal Secretary (Appeals and Security), Government of Maharashtra, Mumbai.

2. The petitioner was detained under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as “COFEPOSA Act”) in pursuance of the impugned order of detention. The petitioner by way of this writ petition is challenging the legality and validity of the impugned order of detention passed by respondent No.2 at pre-execution stage in the peculiar facts and circumstances of this case. It is stated that two similar orders of detention dated 12.01.2005 and 31.01.2005 were issued under the COFEPOSA Act by respondent No.2 against the petitioner Alpesh Navinchandra Shah and his brother Kamlesh Shah respectively. The detention order has already been served upon Kamlesh Shah. The grounds of detention order and the documents relied upon in the case of the petitioner are identical in content and material.

3. The brief facts of the case are mentioned in seriatim as under:

In or about, August, 2004 M/s. Perfect Trading Co. (proprietorship firm of Shri Rajendra Mamgaim) imported Ball bearings in five containers. On 3.9.2004, consignments of mis-declared consignments were intercepted by the DRI officials. The petitioner and his brother were arrested on 4.9.2004 by the Intelligence Officers, DRI, Mumbai Zonal Unit primarily on the allegations that they have been indulging in import of high quality and high value Ball Bearing and were clearing the same by evading duty of custom.

4. The Addl. Chief Metropolitan Magistrate, 3rd Court, Esplanade, Mumbai vide Order dated 23.9.2004 directed to release the petitioner and his brother on bail imposing conditions including their regular attendance in the Department and the imposition of an embargo not to leave the country without the prior permission of the Court.

5. Impugned Detention Order bearing No. PSA 1204/21 (2)/ SLP-3(A) dated 12.1.2005 was issued by respondent No.2 for detaining the petitioner ostensibly under the provisions of COFEPOSA Act 1974. Similar Order No. PSA 1204/21 (1)/SLP-3 (A) dated 31.1.2005 was also issued to detain Shri Kamlesh Shah, the brother of the petitioner.

6. Show Cause Notice dated 23.2.2005 was issued to the petitioner and his brother by the DRI, Mumbai Zonal Unit. Pursuant to the said show cause notice, the application for settlement under Section 127 B of the Customs Act, 1962, was filed on 19.4.2005 by M/s Perfect Trading Co. as Applicant and the petitioner, his brother and others as Co-Applicants before the settlement Commission, Mumbai.

7. During the course of the admission hearing of the aforesaid settlement application, the petitioner came to know that the Order dated 27.12.2005 has been passed by respondent No.2 for detaining him while invoking section 3 (1) of the COFEPOSA Act, 1974. Accordingly, at the stage of the admission hearing, the Settlement Commission was urged to make recommendation to the Detaining Authority for the revocation of the Detention Order.

8. The Settlement Commission, vide order dated 03.01.2006, rejected the prayer by adopting the reasoning narrated in the case of Vipul Gor, Proprietor of M/s Sonam Enterprises (Misc. Order No.12/2005 CUS dated 19.12.2005) wherein it was, inter alia, held that the Commission did not have any jurisdiction to make a recommendation to the Detaining Authority for revocation of a Detention order and further held that the petitioner and his brother would be at liberty to take recourse to any other legal remedy available to it for lifting of the detention order whether by the sponsoring authority, detaining authority or the courts. However, the S