4

Arrest  Under Customs Act, 1962- An Analysis of Section 104 vis-a-vis CrPC


Before discussing arrest under Customs Act 1962 let us dive into article 21 of the constitution. According to Article 21 of the Constitution “no person shall be deprived of liberty of his life or personal liberty except according to the procedure established by law.” The aim of said article is to provide protection from encroachment of personal liberty by executive. So, the idea is pretty straight forward. Before a person is arrested procedure established by law must  be followed and any departure from, cannot be made to his disadvantage .

It means apprehension of person by legal authority resulting in deprivation of one’s liberty must be in accordance with  established procedure of law.  When the said deprivation is complete, it amounts to arrest.

Objective of Arrest Under Customs Act, 1962

The power of  arrest is  vested in customs officer for enforcing the provisions of Customs Act and also to curb to the  menace of smuggling to have deterrent effect.  This power is exercised   when  the act of  a person violate the certain  provisions of the act  and meets the essential ingredient of extant provision of law.  This is done to ensure fair and just investigation so that there is no tampering of evidence.

Under Customs Act, the arrest of a person is effected  for  violation of Section 132, 133, 134, 135, 135A and 136 of the Customs Act, 1962. Section 136 is applicable for offence committed by departmental officers.

Section 104 reads as under

SECTION 104. Power to arrest. — [(1) If an officer of Customs empowered in this behalf by general or special order of the [Principal Commissioner of Customs or Commissioner of Customs] has reason to believe that any person in India or within the Indian customs waters has committed an offence punishable under section 132 or section 133 or section 135 or section 135A or section 136, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.]

(2) Every person arrested under sub-section (1) shall, without unnecessary delay, be taken to a magistrate.

(3) Where an officer of customs has arrested any person under sub-section (1), he shall, for the purpose of releasing such person on bail or otherwise, have the same powers and be subject to the same provisions as the officer-in-charge of a police-station has and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898).

[(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence relating to —

(a)          prohibited goods; or

(b)         evasion or attempted evasion of duty exceeding fifty lakh rupees,

shall be cognizable.

(5) Save as otherwise provided in sub-section (4), all other offences under the Act shall be non-cognizable.

[(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974) an offence punishable under section 135 relating to —

(a)          evasion or attempted evasion of duty exceeding fifty lakh rupees; or

(b)         prohibited goods notified under section 11 which are also notified under sub-clause (C) o8f clause (i) of sub-section (1) of section 135; or

(c)          import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds one crore rupees; or

(d)         fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds fifty lakh rupees,

shall be non-bailable.

(7) Save as otherwise provided in sub-section (6), all other offences under this Act shall be bailable.]

Arrest Under Customs Act, 1962, not to be Made in Routine Manner

Yes, arrest under Customs Act, 1962 has not to be made in routine manner but only in matter of exigency. It is emphasized that arrest of persons in terms of section 104(1) of Customs Act, 1962 should be resorted to only where the facts and situations of a particular case demand such action. Persons involved should not be arrested unless the exigencies of certain situations demand their immediate arrest. These situations may include circumstances :

(i)           to ensure proper investigation of the offence;

(ii)         to prevent such person from absconding;

(iii)        cases involving organised smuggling of goods or evasion of customs duty by way of concealment;

(iv)        To nab masterminds or key operators effecting proxy/benami imports/ exports in the name of dummy or non-existent persons/IECs, etc. 

Arrest Under Customs Act, is not Regulated by CrPC

The power to arrest under sub-section (1) is not regulated by the Code of Criminal Procedure, 1973 but in respect of bail, it is provided that an officer of the Customs shall have the same power and be subject to the same provisions as the officer-in-charge of a police station has. However, unlike CrPC , wherein requirement of warrant is dependent upon offence being coginzable/non-cognizable, there is no requirement of warrant for making arrest under Customs Act.

Proper Officer for Making Arrest Under Customs Act

Generally, Preventive Officer and Examining Officer are empowered by Principal Commissioner /Commissioner of Customs to effect arrest under Customs Act, 1962.

Arrest Under Customs Act needs Prior Permission of Principal Commissioner or Commissioner

Arrest can only be made with the previous permission of Principal Commissioner or Commissioner of Customs . It implies that express permission is mandatory before effecting arrest. The  question arises  why previous permission when , the Board has already empowered Preventive Officer or Examiner for such act, the answer is  scrutiny of the decision of arrest at  higher level, as arrest impinges  the freedom and liberty of an individual, so circumspection and caution is desired to be exercised.  Liberty and freedom is a Constitutional right and it can  be taken away only in  accordance with law . Reputation of a any person is cherished and efforts are taken by any genuine  person to keep it intact , hence arrest of a person contrary to the law  damages  his  reputation, which he is carrying in the eye of society members ,therefore before making arrest  one has to carefully examine the evidence on record , and then if arrest is mandated, it must be given effect. 

Reason to believe

This has not been defined in the customs act, but the same has been defined under Section 2(26) in IPC, 1860 which lays as under:

Reason to believe – A person is said to have “reason to believe “ a thing , if he has sufficient cause to believe that thing but not otherwise.

It implies that reasonable believe must exists on some solid ground viz  some credible piece of evidence or information of contravention of customs law and or allied laws   and  should  not based on whims and fancy or arbitrariness.

Arrest Under Customs Act  u/s 104 does not  cover  the  Violation of Section 134

By perusal of Section 104(1) , it  reveals that barring  Section 134 , it is applicable  for Sections 132, 133, 135 135A and 136  under which arrest can be made, but why  Section 134 is left unmentioned whereas Section 134  lays down provisions for “ for refusal to be X-rayed” and prescribes punishment for violation in form of   imprisonment upto 6 months .

Section 134 comes into play when a person who has secreted inside his body any goods liable to confiscation, resists or refuse radiologist to screen or X- ray his body in accordance with the order of Magistrate under Section 103 or refused or resist registered medical practitioner for taking suitable action for bringing out the goods liable to confiscation under Section 103 of the Customs Act. It connotes that for effecting arrest under 134, there must be non-compliance of Magistrate’s order under Section 103 and the person concerned may be placed in  kept in the custody on the order of Magistrate only.

Arrest under Customs Act has Provided Constitutional Safeguard to Arrestee

Section 104 proceeds on the provisions lays down under Article 22 of the Constitution which says that arrested person must be informed immediately the ground of arrest  and within 24 hours be produced to nearest Magistrate excluding the time of journey. This is done to provide safeguard against arrest and detention and to mitigate undue harassment.

Customs Officer can grant bail but Customs officer is not a police officer

It is clear from the  reading of Section 104(3) of the Customs Act that the Customs Officer exercising power thereunder is not a police officer. Only the powers of a police officer in respect of specific matters are conferred on the Customs Officer . The  customs officers  are bestows with power of police officer respecting grant of bail in accordance with the provisions of Criminal Procedure Code, 1973 ( In short CrPC) . However, all the provisions of CrPC is not applicable to the Customs Act ,  only those  provisions of CrPC is applicable , which  are  expressly mentioned.  Sub-section (3) also exhibits  extent of  applicability   of CrPC into Customs Act but limit itself to bail.

Special Law Prevails over General Law

This also implies that application of certain provisions of  criminal law procedures is subject to enactment in the Custom Act by making express mentioning  of the same. Broadly stated   special law prevails over general law. Conjoint reading of Section 4(2) and Section 5 of CrPC also indicates that offence would be tried , investigated and tried or otherwise dealt with provisions of CrPC , if there is no special enactment to regulate the offence. Even if the offences can be dealt under two different enactments , it would be dealt by special law rather general law.

Bailable or non-bailable  offence under Customs Act and basis  of classification

This compel us to take a look at the sub-section 104(7) , which says that besides offences mentioned in 104(6) and punishable under Section 135 of the Customs Act, all offences under this Act shall be bailable. In other words, only offences listed in sub-section 104(6) punishable under Section 135, are non-bailbale. It does not mean that in non-bailable offences, bail is not granted but the right of grant of bail lies with Magistrate Court. Further, bailable or non-bailable offences are not defined in the Customs Act but in Criminal Procedure Code, 1973. Section 2(a) of CrPC defined bailable offence as umder;

Section  2(a) – “bailable offence” means an offence which is shown as bailable in the First Schedule, or which is made bailable by any other law for the time being in force; and “non-bailable offence” means any other offence.

As per this definition offence would be bailable when either it is shown in the First Schedule of CrPC or made bailable by any other law. Except offences listed in Section 104(6), all offences are made bailable. Plain reading of Section 104(6) indicates that only four types of offences are non-bailbale  which are as under;

(a)  evasion of attempted evasion of duty exceeding fifty lakhs rupees or,

(b) prohibited goods notified under section 11 which are also notified under sub-clause (C) of clause (i) of sub-section (1) of section 135,

(c) import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds one crore rupees

(d) fraudulently availing or  attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds fifty lakh rupees.

Section 104(6)(a)(c) and (d) are lucid and can be easily comprehended but Section 104(6)(b) is quite tricky  which says that prohibited goods must be notified under Section 11 as well as under Section 135. Reading of notification issued under Section 135 revealed that only goods which is notified is Fake Indian Currency Notes(FICN) . It means offence in relation to the  prohibited goods under clause 104(6)(b) respecting FICN is non-bailable only . And what about the offence related to  other prohibited goods , whether they fall under the category of  bailable offence. It may be bailable  but falls  under clause Section 104(4) , which says that offence related to prohibited goods are cognizable.

Further, 104(6)  speaks of non-bailable offences but speaks of violation of Section 135, why other sections viz 132, 133, 135A and 136 are not mentioned under which arrest are made. Answer is that incarceration in all the offence is up to 3 years and imprisonment up to three years is bailable , hence these section are not mentioned.

Under Customs law ,in Bailable offence bail is given by AC/DC, as the customs officer exercise the power of police officer.

Condition for Bail – It is governed by Board Circular 38 of 2013 dated 17.09.2013

Relevant Para is as follows;

Para 3.2 – Under sub-section (3) of section 104 an officer of Customs (arresting officer) has the same powers as an officer in charge of a Police Station under the Cr.PC. Thus, a Customs officer (arresting officer) is bound to release a person on bail for offences categorized as bailable under the Customs Act, 1962. Thus, release on bail must be offered to a person arrested in respect of bailable offence and bail bond accepted for bailable offence. The amount of bail bond/surety for bailable offences should not be excessive and the bail conditions should be informed by the arresting officer in writing to the arrestee and also informed on telephone to the nominated person (as per details provided by the arrestee) and the arrestee should be also allowed to talk to nominated person. If the conditions of the bail are fulfilled by the arrestee, he shall be released by the officer concerned on bail forthwith. The arresting officer may, and shall if such a person is indigent and unable to furnish surety, instead of taking bail from such person, discharge him or her executing a bond without sureties for his appearance as provided under Section 436 of Cr.PC. However, only in cases where the conditions for granting bail are not fulfilled, the arrestee shall be produced before the appropriate Magistrate without unnecessary delay and within twenty-four (24) hours of arrest.

Section 104(4) – Cognizable Offence

However, wide interpretation does not give free hand to perpetrator of crime as any offence in relation to prohibited goods is cognizable as per sub-section 104(4). Under cognizable offence arrest is effected by Police Officer without warrant . Means these are serious offence so similarly in customs act , arrest is  also be made.  Though for effecting arrest  under Customs Act, warrant is not condition precedent  as mandated  by law.

The  word cognizable offence  is defined under Section 2(c) of  CrPC as under;

Section 2(c)”cognizable offence” means an offence for which, and “cognizable case” means a case in which, a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant.

Reading of the above definition gives notion that Police Officer either under CrPC or any other law for time being in force arrest without warrant. First Schedule to CrPC enumerates such classification and categorized all the offences as bailable/non-bailbale  and Cognizable/ Non-Cognizable.

No fixed rule to define cognizable offence

Broadly speaking, cognizable offence are considered as serious offences. Seriousness of the offence depends upon length of imprisonment .  Generally , offence for which punishment is in excess of three years is considered as cognizable offence. However , under  criminal law such classification  also give divergent result  as some  offences for which punishment is less than three years are also cognizable such as offences under Section 295, 296 of IPC Similarly offences relating to marriages under Chapter XX of CrPC under Section 493 to 498 , wherein  prescribed punishment is  in excess of three years but are non-cognizable and bailable too.

Relation between cognizable and bailable

Conjoint reading of bailable, non-bailable offences and cognizable, non-cognizable offences indicate that generally cognizable offences are non-bailable and non-cognizable offence is bailable .

Applying these explanation in Customs Act, it can be concluded that in view of maximum punishment prescribed for 7 years under section 135(1)(i), offence under Section 135 is would be cognizable and non- bailable if it is covered under 135(1)(i) (A)(B),(C,),(D) and punishment is 7 years.  However, in the case of unauthorized importation of baggage falling between value Rs 20 lakhs to 1 Crore, is covered under 135(1)(ii) , where  imprisonment is up to three years and is bailable. Further, going by the length of punishment , offence under Section 132, 133, 135(1)(ii) and 136 are non-cognizable and bailable.

Warrant is not sine qua non for Making Arrest Under Customs Act

Under Customs Act, no occasion arises wherein arrest by the Customs Officers is made with  warrant. The Act per se does not lay down any express  or implied provisions for making arrest with warrant or without  warrant .  Arrest is made on the basis of reasonable belief  in the case of offence under this Act, if it satisfies the ingredients of Section 104 and Board Circular 28 of 2015 dated 23.10.2015  . This   Para 2.3 of the existing guideline issued vide Board Circular 28 of 2015 dated 23.10.2015   reads as under;

Para “2.3 While the Act does not specify any value limits for exercising the powers of arrest, it is clarified that arrest in respect of an offence, should be effected only in exceptional situations which may include :

(a)       Cases involving unauthorised importation in baggage/cases under Transfer of Residence Rules, where the CIF value of the goods involved is Rs. 20,00,000/- (Rupees Twenty Lakh) or more;

(b)       Cases of outright smuggling of high value goods such as precious metal, restricted items or prohibited items or goods notified under section 123 of the Customs Act, 1962 or offence involving foreign currency where the value of offending goods is Rs. 20,00,000/- (Rupees Twenty Lakh) or more;

(c)       In a case related to importation of trade goods (i.e. appraising cases) involving wilful mis-declaration in description of goods/concealment of goods/goods covered under section 123 of Customs Act, 1962 with a view to import restricted or prohibited items and where the CIF value of the offending goods is Rs. 1,00,00,000/- (Rupees one crore) or more;

(d)       Fraudulent availment of drawback or attempt to avail of drawback or any exemption from duty provided under the Customs Act, 1962, if the amount of drawback or exemption from duty is Rs. 1,00,00,000/- (Rupees One Crore) or more. In cases related to exportation of trade goods (i.e. appraising cases) involving (i) wilful mis-declaration in value/description; (ii) concealment of restricted goods or goods notified under section 11 of the Customs Act, 1962, where FOB value of the offending goods is Rs. 1,00,00,000/- (Rupees One Crore) or more.

(e)       The above criteria of value mentioned in sub para 2.3 (a) to 2.3 (d) would not apply in cases involving offences relating to items i.e. FICN, arms, ammunitions and explosives, antiques, art treasures, wild life items and endangered species of flora and fauna. In such cases, arrest, if required, on the basis of facts and circumstances of the case, may be considered irrespective of value of offending goods involved.”

Important Case Laws on Arrest Under Customs Act

In  Kishin  S. Lougani  Versus Union  of  India  in  W.P. (Crl.) No. 333 of 2015 (S)

In this case decided on 19-12-2016  reported in 2017 (352) E.L.T. 433 (Ker.)  Kerala H.C held that  arrest  under Section 104 of Customs Act, 1962 for offences under Sections 133 to 135   is not regulated by Cr.P.C.  It was also observed that  arrest  not necessarily  to be preceded by FIR and it need not end in final report as provided under Section 173(2) of Code of Criminal Procedure, 1973. Purpose of arrest is also for smooth conduct of inquiry under Customs Act  and Customs Officer is neither “Police Station” under Section 2(s) nor “officer in-charge of police station.

Parmeshwar  Vyas  v  Union  of  India in   S.B. Criminal Misc. (Pet.) No. 319 of 2017,

In the instant case decided on 21-2-2017, reported in  2017 (351) E.L.T. 44 (Raj.), it was held by the Rajasthan H.C  that  DRI officials are not police officers . Directorate of Revenue Intelligence (DRI) Officers appointed with power of investigation under Section 53 thereof are not ‘police officer’ . Such officers empowered to search, seizure and arrest a person without lodging of FIR.

High Court of Gujarat: Case of Bhavin Impex Pvt. Ltd. v. State of Gujarat, reported in 2010 (260) E.L.T. 526 (Guj.)

In the instant case it  was   held that ‘Central Excise officer/Customs officer can arrest a person whom they have reason to believe to be liable to punishment under Section 13 of the Central Excise Act, 1944 and Section 104 of the Customs Act, 1962 without warrant, FIR or complaint before Magistrate. Powers of arrest of Revenue officers are for enforcing provisions of the above statutes and not for detecting commission or prosecution offence under those statutes, as that of police officers….’ [paras 26, 29, 30, 31 of the case laws]

The Hon’ble Kerala  High Court in  Inspector  of  Customs , Cochin  v  Shajan  Thayyil

This case was reported in 2017 (349) E.L.T. 420 (Ker.) in  W.A. Nos. 1668 & 2227 of 2016 in W.P.(C) No. 7108 of 2016, decided on 14-11-2016 has   held that  evasion of duty exceeding ` 50 lakhs is cognizable offence  as it  fell within provisions of Section 104(4) of Customs Act, 1962. The officer  of Customs empowered by general or special order of Principal Commissioner of Customs  shall arrest such person and thereafter inform him of grounds for such arrest ,  appellant cannot contend that he may not be arrested before completion of investigation . In view of the aforementioned legal position, it is not open for Mr. Shajahan Thayyil to contend that he may not be arrested before completion of investigation. The law empowers the investigating officer to arrest such person and thereafter inform him of the grounds for such arrest. In view of the same, the order passed by the learned Single Judge directing the investigating officer to arrest Mr. Shajahan Thayyil only after issuing notice is liable to be set aside and hence the same stands set aside. [para 6]

High Court  of Rajasthan  in Mohamad  Nazim Versus U.O.I

Filed vide S.B. Cr. Misc. Bail Application No. 6447 of 2015, decided on 27-7-20152 reported in 2016 (334) E.L.T. 47 (Raj.)  it was held that  clubbing of past incidences of gold smuggling is permitted for grant of bail. They  relied on the decision of  a Co-ordinate Bench in similar matter in 2015 (321) E.L.T. 590 (Raj.), wherein total quantity/value of gold of alleged smuggling on previous occasions, clubbed for deciding bail .  Accordingly application for bail was dismissed as in the instant case, total value of clubbed cases of gold smuggling, was  more than ` 1 crore, so  accused not entitled to bail . [paras 2, 3]

Supreme  Court  of  India  in Union  of  India  Versus Padam  Narain  Aggarawal

In  Criminal Appeal No. 1575 of 2008, decided on 3-10-2008, reported in 2008 (231) E.L.T. 397 (S.C.)  it was  held that   power to arrest a person by a Customs officer is statutory in character and cannot be interfered with . However,  such power of arrest can be exercised only in those cases where the Customs officer has ‘reason to believe’ that a person has been guilty of an offence punishable under Sections 132, 133, 135, 135A or 136 of Customs Act, 1962 .  Power to arrest circumscribed by objective considerations and cannot be exercised on whims, caprice or fancy of officer .  The law thus, on the one hand, allows a Customs Officer to exercise power to arrest a person who has committed certain offences, and on the other hand, takes due care to ensure individual freedom and liberty by laying down norms and providing safeguards so that the power of arrest is not abused or misused by the authorities. [paras 51, 53]

The Hon’ble   High Court  of  Bombay in Vikram  Singh  Versus Union  of  India

In  Criminal Application No. 695 of 2007, decided on 6-3-2007, reported in  2015 (321) E.L.T. 431 (Bom.) has decided the matter of jurisdiction in respect of grant of bail and held that offence of smuggling of bonded stores meant for vessels of Indian Coast Guard and Indian Navy punishable under Section 135(1)(ii) of Customs Act, 1962 and is  bailable and no Magistrate can refuse to grant  bail. They disapprove the direct filing of application for bail before High Court without invoking the jurisdiction of Additional Chief Metropolitan Magistrate.

Final Words  on Arrest Under Customs Act

The arresting a person is an exceptional  power which is conferred on the customs officer for smooth conduct of enquiry to ensure free and fair investigation. It is to be exercised in just manner keeping in view constitutional safeguards provided for protection of personal freedom and liberty. Thus, C.B.I & C. has notified guidelines and clarifications to bring attention of the field formation officials, for arrest and bail under  Customs. Arrest brings criminal law in motion, therefore only in exigency , this power is required  to be exercised. All the provisions of  CrPC  is not applied in Customs Act, only those provisions which have been mentioned under this Act. Generally speaking ,wherein punishment is upto three years , that offence is bailable and non-cognizable. In case of prescribed punishment upward three years, the offence is non-bailable and cognizable.

Hope You Would Love Checking These Valuable Reads on this Blog:

How does SIIB(X) Functions- A Complete Guide

Compounding of offences under Customs Act vis-a-vis- CrPC

Searches Under Customs Act 1962- The Know How of the Procedures

Clearance of Liquid Bulk Cargo- Shore Tank Report and Ullage Survey Report

Recovery of Drawback Amount Where Exports Proceeds not realized


Shekhar

4 Comments

  1. Wow. Very exhaustive and informative. Before reading this article I had only a vague idea about power to arrest under section 104 of Customs Act, 1962. However, after reading it I’m feeling a bit enlighten about it. Thanks for posting this article for our benifit and congratulations for writing such a superb article.

  2. Excellent write up, I want to appreciate you on the para where you emphasised on ” Arrest under Customs Act, 1962 not be made in routine” .
    Very helpful to the intelligence officer.

  3. This article is very well explained and speaks about objectives of arrest that is to ensure fair and just investigation so that there is no tampering of evidence.Persons to be arrested only in exigencies which demands immediate arrest. Most important of all is it is to be made only with prior permission of Principal Commissioner or Commissioner failing which such arrests are liable to be quashed by Court of law. Bail able, non- bail able, cognizable, non- cognizable offence has also been very well explained here. It is very easy to understand and reliable article under the Act.

  4. Superb mind-blowing article. It is written in very simple language and it covers all aspects of Arrest under Customs Act,1962. It is really impeccable and very useful for all Customs officers in whole of India.

Leave a Reply

Your email address will not be published. Required fields are marked *