Mere Registration Of FIR Cannot Be Interpreted To Mean That It Constitutes Initiation Of Proceedings: Supreme Court
The Supreme Court observed that the mere registration of an FIR cannot be interpreted to mean that it constitutes the initiation of proceedings.
The Court quashed the criminal proceedings against Baccarose Perfumes and Beauty Products Pvt. Ltd. (Company), setting aside the orders of the Gujarat High Court and the Special CBI Judge after the Central Bureau Of Investigation (CBI) alleged customs violations relating to the declaration of the Maximum Retail Price (MRP) and Countervailing Duty (CVD) obligations of the Company.
A Bench of Justice Abhay S. Oka and Justice Augustine George Masih observed, “A perusal of the scheme of the CrPC 1973 allows us to infer that mere registration of FIR cannot be interpreted to mean that it constitutes the initiation of such proceedings. A registration of FIR necessitates an investigation by a competent officer as per the detailed process outlined in Sections 155 to 176. It is only after a Final Report (or as referred in the common parlance, a Challan or a Chargesheet) is submitted as per the compliance of Section 173(2) of CrPC 1973, cognizance for the offence(s) concerned is taken. However, undoubtedly, the Court is not bound by the said report.”
Senior Advocate Kapil Sibal represented the appellant, while Advocate Chitrangda Rastavara appeared for the respondents.
The CBI alleged that certain customs officials of the Kandla Special Economic Zone (KASEZ), in criminal conspiracy with the Company, allowed them to clear their goods into the Indian Market on payment of CVD on the invoice value of the concerned goods, rather than the payment of the CVD on the MRP, thereby causing a wrongful gain to themselves and a corresponding wrongful loss to the Government exchequer to the tune of 8 Crores.
The CBI alleged violation of Section 3(2) of the Customs Tariff Act, 1975 and Section 4A(2) of the Central Excise Act, 1944.
However, the Company submitted that the clearances it made from its KASEZ unit into the Domestic Tariff Area (DTA) complied with the applicable legal provisions. It argued that products either containing alcohol, weighing less than 20 grams or 20 milliliters, or wholesale packs did not require MRP declaration under the Standards of Weights and Measures Act, 1976.
After Show Cause Notices were issued to the Company between 2004 and 2005, the company responded by appealing the assessment orders before the Commissioner of Customs (Appeals), which held that declaration of MRP is necessary on packages intended for retail sale and not for bigger packages for wholesale trade.
The company then approached the Settlement Commission and was granted immunity under the Customs Act, 1962, Central Excise Act, 1944, and IPC through a final order.
Despite the same, the CBI pursued criminal charges against the company. After the Company moved an application for discharge, the Special Judge dismissed this application, after which the company appealed before the Gujarat High Court, which upheld the dismissal.
The Supreme Court referred to the decision in Hira Lal Hari Lal Bhagwati v. CBI, New Delhi (2003), wherein it was held that when a certificate for full and final settlement gets issued for a company, then the continuation of prosecution would be inconsistent with the intent and provisions of the law.
“The above ratio, as laid down by this Court, would be fully applicable to the case-at-hand, especially when it is not in dispute that the Commissioner of Customs (Appeals), Kandla returned a finding that the Appellant-Company was not required to pay the CVD on the basis of MRP, but as per the invoice value. This is in consonance with the submission of the Appellant-Company,” the Court remarked.
The Court stated that cognizance for an offence can be taken only after a Chargesheet is submitted in compliance with Section 173(2) of the CrPC. The Bench reiterated the “cardinal principle” that investigation and taking of cognizance operate in “parallel channels, without an intermingling.”
Consequently, the Court observed, “In light of the above, the present Appeal is allowed. The proceedings against the Appellant-Company are quashed by setting aside the Impugned Order.”
Accordingly, the Supreme Court allowed the appeal.
Cause Title: Baccarose Perfumes And Beauty Products Pvt. Ltd. v. Central Bureau Of Investigation & Anr. (Neutral Citation: 2024 INSC 662)
Appearance:
Appellant: Senior Advocate Kapil Sibal; AOR Shamik Shirishbhai Sanjanwala; Advocates Raheel Patel and Prabhakar Yadav
Respondents: Advocates Chitrangda Rastavara, Shagun Thakur, Shantanu Sharma, Rajat Nair, Rajeshwari Shankar, Akshaja Singh, Prashant Bhagwati and Devyani Bhatt; AOR Mukesh Kumar Maroria and Swati Ghildiyal