Legal principle

The Settlement Commission constituted under the Customs Act, 1962 can grant immunity only from prosecution and penalty under the Customs Act in cases involving the levy, assessment and collection of customs duty, and its immunity cannot extend to offences under FERA, which is a self-contained code with its own immunity mechanism (Section 60 FERA) that must be invoked.

Court decision

The revision petition was dismissed and the ACMM's order refusing discharge was upheld: the Settlement Commission neither was competent to, nor did it, grant any immunity to the petitioner for the offence punishable under Section 56 FERA, and any such purported immunity would be without jurisdiction and void ab initio.

Facts

The petitioner, Anil Kapoor, proprietor of M/s Beeta Exports, exported goods (woollen garments and fountain nibs) to buyers in Moscow, Sweden, Dubai and UAE during 1997-1999 under GR forms, with export proceeds of approximately Rs. 40,06,34,929/- remaining unrealised. Canara Bank reported the overdue export bills to the Enforcement Directorate; DRI was separately investigating the firm for evasion of customs duty through fraudulent means and seized its current account under Section 110 of the Customs Act, and the ED searched the petitioner's business and residential premises on 06.12.1999 under Section 37 of FERA 1973. The ED filed Complaint No. 48/1 dated 20.02.2002 under Section 56 of FERA 1973 read with Sections 49(3) and (4) of FEMA 1999 for contravention of Sections 18(2) and 18(3) of FERA (non-realisation of export proceeds without RBI permission). The petitioner had earlier filed Application No. 1/99 dated 05.11.1999 before the Settlement Commission constituted under Section 127 of the Customs Act, 1962 seeking immunity, and later sought discharge before the ACMM on that basis; the ACMM dismissed the discharge application, and the present criminal revision under Sections 397/401 Cr.P.C. challenged that order.

Key provisions

• Section 18(2), Customs Act, 1962 — Provisional assessment of duty
• Section 127B, Customs Act, 1962 — Application for settlement of cases
• Section 127, Customs Act, 1962 — Award of confiscation or penalty by customs officers not to interfere with other punishments
• Section 127A(b), Customs Act, 1962 — Definitions
• Section 75, Customs Act, 1962 — Drawback on imported materials used in the manufacture of goods which are exported
• Section 49(4), The Foreign Exchange Management Act, 1999 — Repeal and saving.
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things