judgment

Kapadia, J. —

1.Leave granted.

2.This appeal is directed against judgment and order dated 17.10.06 in Writ Petition (C) No.12912 of 2006 passed by the Delhi High Court whereby the writ petition filed by Union of India against the Order dated 25.5.06 of the Chief Commissioner of Customs (DZ) in a Compounding Case stood dismissed. By the impugned judgment, High Court has upheld Order No.2/CCC(DZ)/SCM/2006 passed by Chief Commissioner of Customs (Compounding Authority) compounding the offences under Sections 132 and 135(1)(a) of the Customs Act, 1962.

3.On the basis of specific information Anil Chanana-respondent No. 1, who alighted from British Airways flight from London and walked through Green Channel, was intercepted by DRI Officers at the exit gate of the arrival hall of IGI Airport on 11.8.04. On personal search, two sets of diamond earrings were recovered from his coat pocket along with US$1900. Further, an invoice dated 10.8.04 evidencing sale of such earrings to respondent No.1-Anil Chanana along with VAT Declaration Form filed by Anil bearing stamp of Customs Authority, London, was also recovered. Further, the search of his baggage resulted in recovery of two empty plas