Legal principle

The purpose of passing a detention order is to prevent the detenu from continuing his prejudicial activity but not to punish him, so where the case has been fully settled before the Settlement Commission with duty paid and unconditional immunity granted, no purpose is served by continuing the detention order.

Court decision

The Supreme Court allowed the writ petition and quashed and set aside the detention order No. PSA 1204/21(2)/SPL-3(A) dated 12.01.2005 issued against the petitioner, holding that he, being similarly placed to his brother and having paid the customs duty pursuant to the Settlement Commission's order with unconditional immunity, was entitled to the same treatment.

Facts

In August 2004 M/s Perfect Trading Co. imported ball bearings in five containers, and on 3.9.2004 DRI officials intercepted the mis-declared consignments; the petitioner Alpesh Navinchandra Shah and his brother Kamlesh Shah were arrested on 4.9.2004 on allegations of importing high-value ball bearings and evading customs duty, and were later released on bail. Two COFEPOSA detention orders under Section 3(1) were issued by the Principal Secretary (Appeals and Security), Government of Maharashtra — dated 12.01.2005 against the petitioner and 31.01.2005 against his brother. After a show cause notice dated 23.2.2005, a settlement application under Section 127B of the Customs Act, 1962 was filed before the Settlement Commission, Mumbai, which by Final Order No. 17/CUS/2006 dated 7.3.2006 settled the case on payment of customs duty of Rs. 1,40,52,959 and granted immunity under Section 127H(1) from penalty under the Customs Act and from prosecution under the Customs Act and IPC, without imposing any conditions, forwarding a copy to the Detaining Authority. Despite the settlement, the brother was detained, but the Advisory Board opined there was no sufficient cause for his detention and the Government revoked his detention order under Section 8(f) of COFEPOSA on 5.6.2006.

Key provisions

• Section 127B, Customs Act, 1962 — Application for settlement of cases
• Section 127H, Customs Act, 1962 — Power of Settlement Commission to grant immunity from prosecution and penalty
• Section 127F(2), Customs Act, 1962 — Power and procedure of Settlement Commission
• Section 127, Customs Act, 1962 — Award of confiscation or penalty by customs officers not to interfere with other punishments
• Section 111, Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 127J, Customs Act, 1962 — Order of settlement to be conclusive