Point of law : An application under Section 482 of the Criminal Procedure Code is maintainable to quash proceedings which are ex facie bad for want of sanction, frivolous or in abuse of process of court.

ORDER :

This petition is filed by the petitioners-A2 and A3 under Section 482 Cr.P.C. to quash the proceedings in CC No.57 of 2016 on the file of XII Additional Chief Metropolitan Magistrate, Hyderabad.

2. The case of the petitioners was that the 1st petitioner was an Intelligence Officer and the 2nd petitioner was a Senior Intelligence Officer of the Directorate of the Revenue Intelligence (DRI), Hyderabad Regional Unit. The DRI was the Intelligence and Enforcement Agency of the Anti Smuggling matters under the Ministry of Finance, Government of India.

3. The 2nd respondent was the founder Director of a family concern, by name, M/s. Flytech Aviation Limited (FAL) and held 69% of shares in FAL. On the basis of specific intelligence about evasion of Customs Duties by FAL, the DRI, Regional Unit, Hyderabad initiated investigation into the import of 180 LED Panels (5 LED Boards) from Hong Kong and Aerophile Helium Baloon from United Kingdom. The imports of FAL were made from Sigma Resources Group Incorporation, New York, USA (Sigma), which was also solely owned by the 2nd respondent. Sigma, in turn, purchased the goods from Strongbase Investment Ltd., and Benson International HK Ltd., both based in Hong Kong. Both the purchaser and vendor companies were owned by the 2nd respondent. The essence of the illegal transaction was that FAL paid small amounts to Sigma for the imports, but the Sigma and other entities paid huge amounts to the Benson International and Strongbase Investment Ltd., for the same imports. Lesser amounts were shown in invoices to FAL from Sigma to evade customs duty to Indian Government, among other illegal motives of money laundering. The Additional Director, DRI, Hyderabad issued orders for search on 28.12.2007. The petitioners, along with a team of other members, conducted search at the office premises of FAL and at the residence of the 2nd respondent. The 1st petitioner was one of the four member search team in respect of the search at the office premises of the FAL. The 2nd petitioner was one of the four-member search team in respect of the search at the residence of the 2nd respondent. During the search, a detailed panchanama of the seized items was recorded. The search at both the places resulted in recovery of documents revealing that the 2nd respondent held 69% shares in FAL and he was also the sole owner of Sigma and he purchased the LED Boards from M/s.Benson International (HK) Ltd., and Strongbase Investment Ltd., Hong Kong and supplied them by grossly under invoicing the same to his own company FAL in contravention of the provisions of Section 14 of the Customs Act, 1962 and the Customs Valuation Rules, 1988.

4. To facilitate the undervaluation, the 2nd respondent issued invoices of Sigma to FAL indicating a value of US$ 81,000/- for all the five Boards, though he actually remitted more than above invoice value to the actual suppliers. The email correspondence between the 2nd respondent and the alleged suppliers recovered during the searches would show that the 2nd respondent procured the same in the name of Sigma at a much higher price and caused loss to the Government exchequer. The above documentary evidence collected made it clear that the 2nd respondent remitted US$ 76,500/- from his ICICI Bank Singapore account, US$ 98,000/- from North Fork Bank, New York and paid US$ 1,41,000/- from the account of M/s.Ariel Technologies, New York to the supplier of LED Boards. Evidence also indicated that in addition to the above, the 2nd respondent remitted an amount of US$ 1,27,500/- through his friend Mr. Badruddin Syed Hyder in Dubai. As per the email correspondence between the 2nd respondent and the supplier in Hong Kong, the 2nd respondent had to pay balance of US$ 2,08,000/- totalling to US$ 6,52,000/- against a value of US$ 81,000/- declared to the Indian Customs for assessment and thereby evaded customs duty. The other documents recovered would show that the 2nd respondent imported spares removed from th