IN THE COURT OF SESSIONS AT CHENNAI

Present: Tmt.S.Alli, M.L., Principal Sessions Judge.

Friday, the 18^th day of November, 2022.

Criminal Appeal No.16/2020

(CNR No.TNCH01­001403­2020) against

E.O.C.C.No.243/2012

(On the file of learned Additional Chief Metropolitan Magistrate, (E.O.I), Egmore, Chennai)

From what Court the  appeal	:      Addl. Chief Metropolitan Magistrate,
is preferred	(E.O.I), Egmore, Chennai.
Number of the case in that Court	:       E.O.C.C.No.243 / 2012
Number of the Appeal	:      C.A.No.16/2020
Name and description of the Appellant	:  1.M/s.Penshibabo Wang Private Limited, Represented by its Managing Director, Mr.Rajwant Singh, No.80, Lavanya Apartments, 13th Cross, Ganganagar,                Bangalore­560024. 2. Mr.Rajwanth Sing.
Respondent’s name in the appeal. The sentence and law under which	:      Deputy Commissioner of Customs, Prosecution Unit (Sea), Sea Port (Imports), Chennai.
it was imposed by the lower court	: The appellants / accused were convicted u/s 132 and 135(1)(a) of the Customs Act, 1962 r/w Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and the 1st accused company was convicted and sentenced to pay a fine of Rs.5,000/­ u/s 132 of the Customs Act, 1962 and to pay a fine of Rs.5,000/­ u/s 135(1)(a) of the Customs Act, 1962.  Since A2 Rajwant Singh is representing A1

company, he was directed to pay the fine imposed on A1 company.  The 2^nd accused was sentenced to undergo R.I. for 1 year and shall pay a fine of Rs.5,000/­, in default, to undergo simple imprisonment for 3 months for the offence u/s 132 of the Customs Act, 1962 and the 2^nd accused was sentenced to undergo rigorous imprisonment for 2 years and shall pay a fine of Rs.5,000/­, in default, to undergo simple imprisonment for 3 months u/s 135(1)(a) of the Customs Act, 1962.

Whether confirmed, modified or
reversed; and if modified the				:		In the result, the appeal is allowed.  The
modification						Judgment passed by the Learned Additional Chief Metropolitan Magistrate (E.O.I), Egmore, Chennai in E.O.C.C.No.243/2012, dated 18.12.2019 is hereby set aside.  The accused is set at liberty.
			Date of, or on which
	Presentation	Filing	Notice issued by Court to appear		Bail bond if appellant has been let out on bail.		Respondent ordered to appear.	Hearing	Order.
C.A.16/2020	8.1.2020	9.1.2020	9.1.2020		­­		14.2.2020	13.10.2022	18.11.2022

This appeal came before this court on 18.10.2022 for final hearing in the presence of

M/s.Shabnam Banu and T.Sushil Sarayu, Counsel for the appellants and of Mr.N.P.Kumar, Special Public Prosecutor for the respondent, upon hearing both side arguments and upon perusing the case­records and judgment of the trial court and having stood over for consideration till this date, this Court delivered the following:­

JUDGMENT

1. This appeal has been preferred against the conviction recorded by the learned

Additional Chief Metropolitan Magistrate (E.O.I), Egmore, Chennai in

E.O.C.C.No.243/2012, dated 18.12.2019.

2. The case of the prosecution is that one M/s.Penshibabo Wang Pvt.Ltd. had filed abill of entry No.331475, dated 12.10.2009 for clearing Bio fertiliser under Chapter 31 of Customs Tarrif Act, 1975. It was brought to the notice that several companies were importing insecticide by declaring it as fertilisers under chapter 31 instead of under chapter 38.  But, import of insecticide is covered without under the schedule to the Insecticide Act, 1968. It could by imported only if the importer at registration himself with the Central

Insecticide Board.  Import without such registration attracts prohibition u/s 7 of the

Insecticide Act and also it is violation of the import policy and the Foreign Trade (Development and Regulation) Act 1992.  In such case, the goods should be liable confiscation u/s 111(1)(d)(m) and (o) of the Customs Act, 1962.  The SHB unit at Chennai Customs House had taken up bill of entry No.331475, dated 12.10.2009 filed by M/s.Penshibabo Wang Pvt. Ltd. through CHA M/s.Lotus International Services for detailed investigation.  Based on the scrutiny of the document and investigation conducted it emerged that M/s.Penshibabo Wang Pvt. Ltd. had imported about 18 consignments from September 2007 to December 2009 under various bill of entry declaring goods as Plant Bio fetilisers (Liquid).  Sample of the imported goods was drawn in the presence of CHA of the importer on 27.10.2009.  Pertaining to bill of entry No.331475.  As per oxymatrine policy M/s.Inspectorate Griffith was the recognised testing agency.  The test report conform the imported goods contain oxymatrine and the composition list show the percentage of oxymatrine 0.36% oxymatrine is a restricted item and Sl.No. 706 of the schedule to the Insecticides Act 1968 and it is restricted of import.  As per Section 9(1) of Insecticides Act, any person desiring to import of manufacturing any insecticide has to apply to registration committee.  No person shall import or manufacture any insecticide except in accordance with the condition with the registration.  The importer M/s.Penshibabo Wang Pvt. Ltd. did not obtain any such registration show there has been a contravening of Section 17 of

Insecticide Act.  The data relating to the imports bill of entry No.331475, dated 12.10.2009 and also the past 16 bills of entry were recovered from the premise of CHA.  The total value of the oxymatrine based insecticide import by the importer was Rs.6,65,88,517/­ and duty involved thereupon was Rs.17,45,440/­ for the past 16 consignments Rs.6,54,827/­ for the bill of entry No.331475.  Later on, vide bill of entry No.376967, dated 8.12.2009, the importer had imported 5000 kgs. of Plant fertiliser (Sea Weed origin powder) from and 6000 kgs of Plant fertiliser (Sea Weed Liquid) from which was also found to be oxymatrine based pesticide to the value of Rs.34,46,877/­  The website of both manufacturer Importer would conform that the raw material of their products contains of Sophoraflavescenait and Mellaazedarachlinn they are pesticides which contains of Sophoraflavescenait and Meliaazedarachlinn they are pesticides which contains oxymatrine of 0.36%  The investigation concluded that the goods are pesticides and misdeclared fertilisers M/s.Penshibabo Wang Pvt. Ltd. has evaded the payment additional duty of customs.  Goods were wrongly classified as plant based natural fertiliser instead of classifying it as pesticides.  So that the live consignments seized and they are liable for confiscation u/s 111(d) and (m) r/w 17 of the Insecticides Act, 1968 and section 3(3) of the Foreign Trade

(D & R) Act, 1992.  The statement of 2^nd accused Rajwant Singh, Managing Director of M/s.Penshibabo Wang Pvt. Ltd. was recorded on 7.1.2010 to 29.1.2010.  In his voluntary statement her inter alia stated that a liquid material imported contains oximatrine he had also signed the certificate showing the usage and rate of dilution.  His company website www.damanagro.com shows goods made out raw materials Sophoraflavescenait and

Meliaazedarachlinn to be a pesticide and not a fertiliser.  He initially denied that the website belongs to his company.  Later on he had stated that instruction was given to M/s.Web Bazaar to set up a website and he was not aware it is posted.  The shown material in the website is identical to that given that the bill of entry write up.  Rajwant Singh accepted that they did not have registration under the Fertilizer Control Order to sell their produce and their product did not fall under the same.  He claimed to be unaware that Oximatrine is restricted under Sl.No.706 to the Schedule of the Insecticides Act 1968.  He accepted that he would pay the duty if it was payable and he was proved wrong.  After completion of investigation two show cause notices were issued.  The adjudicating authority passed an order would whereby the goods imported vide bill of entry No.331475, dated 12.10.2009 was valued at Rs.67,47,325/­ and it was confiscated u/s 111(d) and (m) of the Customs Act, 1962 r/w Section 17 of the Insecticides Act.  Permission for re­export on payment of redemptions fine of Rs.5 lakhs was also ordered.  Penalty of Rs.2,50,000/­ was imposed to M/s.Penshibabo Wang Pvt. Ltd.  The past 16 consignments were valued at Rs.6,65,88,517/and ordered to be confiscated u/s 111(d)(m) of the Customs Act r/w 17 of the Insecticides Act, 1968.  Penalty of Rs.17,45,440/­ imposed to M/s.Penshibabo Wang Pvt. Ltd.  So far as bill of entry 376967, dated 8.12.2009 is concerned, adjudicating authority had passed an order whereby the goods were re­classified under Tariff item 38089910 as pesticides.  The imported goods were confiscated which was of the value Rs.34,46,877/­ re­export of the imported goods under bill of entry 376967, dated 8.12.2009 was allowed on payment of redemption fine of Rs.3,50,000/­  Penalty of Rs.1,75,000/­ was also imposed on M/s.Penshibabo Wang Pvt. Ltd., Bangalore and Shri.Rajwant Singh in his capacity as Managing Director of M/s.Penshibabo Wang Pvt. Ltd. willfully and deliberately committed offence u/s 132 a well as 135 of the Customs Act, 1962 and caused loss of revenue to exchequer.

3. In the trial court, on the side of the prosecution, P.Ws.1 to 9 were examined andEx.P1 to P55 were marked. On the side of defence D.W.1 and 2 were examined and Ex.D1 to D8 were marked.
4. The trial court, after considering the evidences on record, found the accused guiltyu/s u/s 132 and 135(1)(a) of the Customs Act, 1962 r/w Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and the 1^st accused company was convicted and sentenced to pay a fine of Rs.5,000/­ u/s 132 of the Customs Act, 1962 and to pay a fine of Rs.5,000/­ u/s 135(1)(a) of the Customs Act, 1962. Since A2 Rajwant Singh is representing A1 company, he was directed to pay the fine imposed on A1 company.  The 2^nd accused was sentenced to undergo R.I. for 1 year and shall pay a fine of Rs.5,000/­, in default, to undergo simple imprisonment for 3 months for the offence u/s 132 of the Customs Act, 1962 and the 2^nd accused was sentenced to undergo rigorous imprisonment for 2 years and shall pay a fine of Rs.5,000/­, in default, to undergo simple imprisonment for 3 months u/s 135(1)(a) of the Customs Act, 1962.  Aggrieved over the said judgment, the appellants / accused No.1 and 2 have preferred the present appeal.
5. Grounds of appeal :

The prosecution has left several lacunae in proving a case against the accused for the offence under S.132 and S.135(1)(a) of the Customs Act, 1962.  The trial court has not weighed the evidence laid down by the prosecution and has convicted the appellants without considering the history of the appellants with the complainant.  The prosecution is based on a mechanical process without any applicability of the laws, procedure or guidelines established by the authorities.  The prosecution miserably failed to bring crucial witnesses on record and have merely marked statements made by them under S.108 of the Customs Act.  The entire case is premised under the Insecticide Act, 1968, wherein the appellants have allegedly imported an insecticide by declaring it as a fertilizer, strangely the rudiments / procedure of the insecticide At, have not been implemented which is admittedly stated by the learned Judge in the impugned judgment, but however the appellants herein have been convicted.  It is a peculiar case wherein the primary fact being that there has been a dispute whether or not the import by the appellants is an insecticide or a bio fertilizer but the punishment that has been fastened is under the Customs Act after coming to a conclusion that the import was of an insecticide.  The sanction order dated 16.10.2012 marked as Ex.P44 clearly relies only on the Insecticide Act, 1968.  However, the learned Judge has given a finding that the procedure with respect to the Insecticide Act will not be required.  In such a situation it is pertinent to point out that in the absence of the procedure implemented as enunciated by the Insecticide Act, 1968, it is far­fetched as to how the learned Judge concluded that the import is that of an insecticide.  The complaint was filed allegedly based on information that several companies were importing insecticide by declaring it as a fertilizer, however, there is no such action taken against any of the alleged companies and it is only the appellants who have been framed here based on this allegedly hearsay information.  The Customs House Agent was never arrayed as an accused nor brought on record as a witness.  It is the representatives of this CHA company who have signed all relevant documents.  The prosecution initiated the proceedings after the dispute was decided before the CESTAT. The learned Judge has clearly mentioned that the order of the CESTAT will not be binding on the prosecution at para 38 of the impugned judgment but has however relied on an alleged admission by the appellants with regard to the presence of Oxymatrine in the live consignment which is not to be found in any of the documents that were marked during the trial.  If the order of the CESTAT is not binding on the prosecution, then how can the alleged statements and pleadings of the same are taken into record.  The prosecution ought to have acted independently dehorn the CESTAT proceedings, which has not taken place in the present case.  There is a clear contradiction of the very own findings in the impugned judgment.

6. The trial court has not gone into the delay of 3 years in commencing prosecutionand only certain bills of entry from certain years of have been looked into by the respondent and the rest has been overlooked. The prosecution has filed the complaint before the lower court after a period of three years since the actual confiscation of the bill of entry No.3311475, dated 12.10.2009. The sanction order dated 16.10.2012 which was marked as Ex.P44 was granted after a period of three years. This clearly shows that this was an afterthought of the complainant and they have merely taken recourse through criminal courts after the appeal was decide by the appellant tribunal.  The delay was not explained. The officer who granted sanction was not examined.  The trial court stated that Oxymatrine is classified as an insecticide; however no detail with respect to the notification under the Act has been relied on is marked.  The trial court erred to note that the appellants have marked Ex.D1 which is the bill of entry dated 21.10.2004 and Ex.D2 which is the chemical examiner’s report regarding this consignment.  The said report clearly states that the sample of the appellant can be used a fertilizer.  The appellants have been punished twice for the alleged same offence and this amounts to double jeopardy.   It was the duty of the prosecution to prove the intentional mis­declaration by the appellants for making out an offence u/s 135(1)(a) of the Customs Act.  The appellants have been involve in importing this product since 2004 and that all the import documents such as bills of entry, invoice list, packing list and composition list have declared the presence of Oxymatrine as 0.36%.  The persons who tested the samples was never examined.  The trial court erred in relying upon the statement of P.W.9 who deposed based on the opinion given in Ex.P7.  This witness has also admitted during her cross­examination that the samples were neither examined by her nor is the lab registered under the Customs Empanelment.  According to P.W.9, she is only a technical advisor in M/s.Inspectorate Griffith India Pvt. Ltd. and she is not an expert in this field of career to testify based on the report in Ex.P7.  It is also recorded during the examination of P.W.8 that in Ex.P7 Dr.Annapoorani has opined that Oxymatrine is to be treated as pesticide rather than a fertilizer.  However, when Dr.Annapoorani was crossexamined, she blatantly stated that she had not personally tested the samples nor has she signed any report.  These contradictions between P.W.8 and P.W.9 clearly show the improbable nature of the test report given by the lab (Ex.P7).
7. As the case may be the said lab is not legally competent to produce such report ofveracity in a criminal prosecution and to add fuel to the fire the credibility of the witnesses and the reports are highly dubious in nature. The learned Judge has committed a grave error in not realizing the several lacunae in the statements of the PW8 and PW9 and hence directly affecting the credibility of such witnesses.   In Ex.P.2 the Mahazar recorded by PW2 has also recorded the fact that the import documents such as invoice list, packing list and the composition list clearly stated that it contains Oxymatrine.  This is a clear indication that the Appellants never intended to mis­diclare to evade duty and to create a loss to the revenue exchequer as alleged by the complainant.  The Lower Court cannot infer an intention to mis­declare when the Appellants themselves have mentioned the same specifically in the list.  The lower court also failed to consider the fact that the  Mahazar dated 27.10.2009 marked as Ex.P.2 does not explain the manner of drawing samples from the drums in the container.  In the Mahazar and the statement given by PW2 it is stated that five samples were collected from two random drums, however, the procedure of collecting this sample has not been recorded.  Both the Mahazar and the statement of PW2 do not mention anything about mixing the liquid mixture before collecting samples for testing. This is a very crucial step to make sure the liquid is homogenous before the drawing of samples.  Since the manner of drawing of the sample in inappropriate, the test reports given on these samples are highly unreliable.  The impugned judgment convicting the Appellants was largely based on the single test report marked as PW7, the credibility of which is highly questionable.
8. The prosecution has failed to produce and mark the authorisation/search warrantsissued to authorise the search conducted on the premises of the Appellants on 11.01.2010 under S.105 of the Customs Act, 1962 during trial. The Mahazar Ex.P.5 dated 11.01.2010 stated that the Superintendent of Customs showed the authorisation letter to the representative of the 1^st Appellant, Mr. Anil Kumar before conducting the search.  PW3 has also stated during his examination that the Additional Commissioner (Preventive), Bangalore issued search warrants under S.105 of Customs Act, 1962.  He has also mentioned that the wife of the 2^nd Appellant was present and that the warrants were show to her and signatures were taken from her as recorded in Ex.P.4.   Based on the search warrant, a search was conducted, and documents and emails were recovered.  In order to validate this recovery, it is necessary that the search warrant ought to have been marked during trial.  The learned Judge has erred in marking the statement given under S.108 of the Customs Act, 1962 by one Mr. Masilamani the representative of the CHA Company.  The statement was recorded before PW5, who was then Appraiser cum Investigating officer for this case.  The prosecution has not examined this witness during the trial, but the statement given by him before PW5 under Section 108 of the Customs Act has been marked as a document as Ex.P.6. When the author of the statement was not examined before the court, marking of the said document entirely vitiates the principles of a fair and unbiased trial before deciding the guilt of the accused.  The prosecution has flagrantly committed an error of marking several secondary documents such as Ex.P.28­P.30 pertaining to the e­mail conversations between the 2^nd Appellant and the importer, without producing a certificate under S.65B of the Evidence Act or a certificate as contemplated under S.138­C (4) of the Customs Act,1962.
9. The emails, the electronic evidence were recovered from PW.4 and PW.5 whowere the Mahazar witnesses. The Learned Judge has arrived at a conclusion that the above said documents and the print outs are confiscated, a certificate under Section 65­B will not be needed.   In the present case,  the Indian Evidence Act and a catena of Judgments by the Hon’ble Apex Court has clearly enunciated that a certificate under 65­B (4) has to be issued by the person who has taken prints of it or is the holder of prints. In this case it is not known who has taken these prints and that has not been disclosed.  Further, the File No.54 has not been marked during the trial hence it is not known where these emails are recovered.  In the absence of such important details, the dismissive finding of not requiring a certificate under Sexton 65­B is absurd.  When the author of the emails i.e. Sharon a representative of M/s. Beijing Multi Grass, China was not brought as a witness to depose,  the e­mails ought to be rejected out rightly when finding of the judgments by the learned Judge.  There has to be a clear demarcation between the file in possession and its’s itinerary and the content that was recovered, which is covered under the ambit of 65­B.  Further in such a situation the learned Judge cannot identify these e­mails as electronic evidence more so when the said documents were highly prone to tampering till the date of submission before the Hon’ble Court.  The emails were in possession of the Respondent from 2010 to 2014, in 2014 these e­mails were separately marked and there are high chances that these documents could have been tampered.
10. The Learned Judge erred to note that the provisions of S.138C of the CustomsAct were hot complied with to use the computer print outs as evidence. There is a gross illegality committed during the retrieval of electronic documents.  It is also derived from the investigating process that the certificate was in fact never prepared even after printing out the e­mail conversations.  This clearly increases the doubt regarding these printouts and that the chances of tampering with such evidences can be very high in the given circumstances . For a moment, even if the 65­B certificate under the Indian Evidence Act is kept aside, the finding that the charges are framed only based on the Customs Act is grossly violated.  The very aspect entails in the entire trial being flawed and a miscarriage of justice.  Inadmissible electronic evidence has been relied on to convict the Appellants.  The learned Judge has established mens­era only based on the emails recovered however in the absence of a 65­B the same is inadmissible.  Further any finding based on this inadmissible evidence is liable to be set aside.
11. The prosecution has clearly neglected to prove the authenticity of the printouts to show that these documents were not tampered. Moreover, it is the duty and responsibility of the investigating Officer to collect all evidences and produce it before the court in such a manner without affecting the authenticity and genuineness of the documents.  In the case at hand, neither the prosecution has produced the certificate nor has the learned Judge recorded any adverse finding in the impugned judgment for the failure to produce the certificate instead  the Learned Judge came to an erroneous conclusion that a certificate under Section 65­B is not required for electronic evidence.  Assuming but not admitting to the admissibility of Ex. P.28­P38, the prosecution has marked all the email conversations through PW5 who was the investigating officer, however they have not recorded the statement of Sharon who is the representative of the manufacture to prove the veracity of the mail conversations.
12. The Learned Judge has committed a grave mistake by giving a finding that thefacts admitted by the accused before the adjudicating authority would have some relevancy.

The regulations given by Customs as well as certain decisions of the Apex Court, have clearly laid down that the adjudication proceedings and prosecution proceedings are two completely different proceedings and they would have no relevancy of any kind whatsoever. The learned Judge has erred in not considering the reply letter dated 01.02.2017 given by the Deputy Director of the Central insecticide Laboratory, Faridabad which has been marked as Ex.D5.  The learned Judge was completely erred in not taking into consideration the evidence given by the Central Insecticide Laboratory, which is the supreme authority as per the Insecticide Act to decide the veracity of any sample.  The Learned Judge failed to consider that that DW2 was a Deputy Director,  Plant Pathology, Central Insecticide Laboratory from the Central Insecticide Laboratory, Faridabad which is the highest authority and the emphasis of this Laboratory has been reiterated in many cases which were also relied by the Appellant during their arguments.  The report of the  Central Insecticide Laboratory is conclusive however an uncorroborated report given by a private agency was preferred over the same.

13. The prosecution has entirely based their case that the Appellants did not have thenecessary registration and license to import pesticides and has hence committed an offence under S.17 of Insecticide Act. Though the charges were framed under S.17 of the Insecticide Act, but the prosecution had failed to establish a case under the said provision since the procedure as per this Act was not followed by the investigating officer.  Hence, the Learned Judge has acquitted the Appellants from the said charge.  In the given backdrop of these facts,  even though the Learned Judge has acquitted the Appellants from the offence of S.17 of Insecticide Act but has chosen to rely upon the Schedule of the same Act to convict them under S.132 and S.135 (1) (a) of the Customs Act, 1962.  This is entirely untenable in laws as the said observation does not confirm or even remotely relate to the ingredients of the offence under S.132 and S.135 (1)(a) of the Customs Act, 1962 and is hence violative of criminal justice system and settled legal principles.
14. The learned Judge erred in bi­furcating the charges under the Insecticide Act andthe Customs Act. The charges under the Customs Act will not arise in the absence of the elements of the Insecticide Act but however the Learned judge has proceeded to pass the impugned Judgment with findings that are not comprehensible.   There was no Insecticide Inspector present as per Section 22(5) to take any sample and neither was the procedure for taking the sample followed.  Further grave error has been committed by non ­compliance under section 24(40 of the Insecticide Act.  The Learned Judge has also admitted to the fact that none of these procedures have been followed and the same also is not required as the offence falls squarely under the Customs Act.  The proposition is not within the understanding of any layman.  If the Appellants are held liable for importing ana Insecticide, it is pertinent that they should be held liable under the Customs Act f the same is proved as per the parent Act which is the Insecticide Act.  In the present case the Learned Judge has brushed aside all mandatory requirements necessary to prove if the sample is an insecticide but has picked and chosen only the work “Insecticide” which is highly arbitrary and erroneous.  There is established that the import was an insecticide, ignoring all mandates and proceeding to conclude that the same is an insecticide is premature and unjust.  There has been no sanction obtained from the State Government as stipulated under Section 3 of the Insecticide Act, 1968.  The statement given by DW2 has clearly opined that the contents of the live consignment are not a pesticide but a fertilizer.  In spite of not testing the sample of the live consignment, the authorities have relied upon the composition list as per Ex.­D3 which correlates to the test report given by the private agency which is marked as Ex.P7.  If the learned Judge does not reply upon the reply given by DW2 for the reason that it is based on the composition list by the manufacturer (Ex.D3), then the authenticity of the test report given marked as Ex.P7 should also be questioned since it also states that the results have complied with the composition list given by the Appellants.  The Learned Judge has conveniently chosen to consider only the test report submitted by the prosecution however, the document in Ex.D5 was not taken into consideration.
15. The prosecution has failed to conduct a fair investigation since they investigatethe CHA Company at any point of time. The representative of the said company was summoned by the adjudicating authority but however, no investigation was initiated against them.  Even the representative’s statement was not recorded before the Lower Court.  The prosecution has been biased only against the Appellants for reasons best known to them initiated criminal prosecution against them.  Nowhere in the  documents is the CHA scrutinized and they were not even arrayed as a witness during the trial much less as an accused in the proceedings.  This very fact vitiates the whole procedure of a fair trial as enunciated by the criminal justice.  The said clearing agents ought to have been arrayed as an accused or at least brought on record as witnesses because the job of the Appellants is to only provide authorization to such agents to execute work with respect to the consignments whereas the said agents do the actual work by signing all documents which are necessarily marked in the trial as bills of entry.  This being the case how could a necessary party to a proceeding not be brought on record and this reflects a conspiracy theory on behalf of the prosecution.  Further, the most crucial aspect of all being the Appellants have been importing the very same fertilizer from 2004, however the prosecution has only been holding them liable for the import with respect to the year 2007­2009.  The conduct of instituting a delayed prosecution and not arraying necessary parties and only insisting on the import for the year 2007­2009 when this is the business that the Appellant has been carrying on since 2004 displays a concocted framed plan.  In any event, the reasons given by the Lower Court to convict the Appellants are not sound and the Judgment is cryptic and does not provide any valid legal reasons to hold the Appellants liable. Hence, the appeal may be allowed and the judgment of the trial court has to be set aside.
16. The points for consideration are :

• Whether the Trial Court erred in convicting the appellant / accused?
• Whether the appeal deserves to be allowed?

POINT Nos.1 and 2 :

17. The learned counsel for the appellant would submit in her arguments that the accused No.1 was convicted and sentenced to pay a fine of Rs.5000/­ u/s 132 of Customs Act, 1962 and to pay a fine of Rs.5000/­ u/s 135(1)(a) of Customs Act, 1962 and the 2nd accused was also convicted and sentenced to undergo One Year Rigorous Imprisonment and to pay a fine of Rs.5,000/­ in default, to undergo 3 months of Simple Imprisonment for the 132 of Customs Act, 1962 and to undergo two years Rigorous Imprisonment and to pay a fine of Rs.5000/­ u/s 135(1)(a) of Customs Act, 1962, in default, to undergo 3 months S.I. Against the judgment of the trial court, they have preferred this appeal. The learned counsel has also submitted the following arguments in favour of the accused  for consideration of this court :
    • Non­production of physical evidence / witnesses.
    • The provisions of Indian Evidence Act and Criminal Procedure Code has not been followed and the Customs Act has been prioritized by the trial court.
    • The accused were convicted under the Customs Act though they were

acquitted under the Insecticide Act by virtue of Sec.17.

• Physical samples were not produced before the trial court.
• Independent and mahazar witnesses were not examined.
• Expert Opinion is not admissible in Law and it has not been proved by examining the author of the opinion.
• Chain of custody of seized samples not proved.
• Sanction u/s 131 of Insecticide Act not obtained for prosecution and therefore, the complaint itself is not maintainable.
• Report of the Private Lab is not admissible and the conviction on the basis of the Lab Report is not sustainable.
• Non­production of Sec.65B Evidence Act Certificate for the Electronic Documents Ex.P25, P28, P29 and P30.
• Prosecution has miserably failed to prove the mis­declaration and evasion of duty beyond all reasonable doubt.
• The result of the adjudication proceedings is not binding upon the criminal court.
• Search Warrants were not produced before the trial court.

8. The learned counsel would further submit that the trial court, without considering those facts in proper perspective, found guilty and sentenced the accused for imprisonment and fine and it has to be set aside by allowing the appeal.

19. The learned Special Public Prosecutor for the respondent would submit that the1st accused filed a Bill of Entry on 12.10.2009 for clearing bio­fertilizer under Chapter XXXI of Customs Act, 1975. Earlier, it has come to the knowledge of the authorities that the accused company has imported insecticide by declaring it as Fertilizer under Chapter XXXI instead of Chapter XXXVIII.  Fertilizers can be imported without CV duty, but, the insecticide is covered under the Schedule of Insecticide Act and it can be imported only after registration with Central Insecticide Board.  The SIIB Unit at Chennai, Customs House, has taken up the Bill of Entry filed by the 1st accused through CHA M/s.Lotus International Services for investigation and it has been revealed that the 1st accused company have imported 18 consignments under various bills of entries.  The learned Special Public Prosecutor would further submit that the respondent officials have taken the samples and sent it to M/s.Inspectorate Griffith for testing and the test result reveals that 0.41 % of Oxymatrine has been found in the samples.  The five samples from 18 Bill of Entries were taken by different officials from different places.  Also, in the Website of the accused company, confirms the fact that the product contains Oxymatrine in the samples.  The accused company has mis­declared the pesticide as fertilizers and it has been imported under Chapter XXXI instead of Chapter XXXVIII of Customs Act.  The prosecution has examined 9 witnesses as P.W.1 to 9 and also produced Ex.P1 to P55 to prove the charges against the accused.  The import of pesticides are prohibited u/s 17(1)(a) of Insecticide Act 1968.  Also, the Confiscation of Goods ordered by the  Adjudicating Authority is liable to be upheld and the request of the appellant has been considered by the Adjudicating Authority and allowed for re­export of the goods on imposition of redemption of fine of Rs.5,00,000/­  The learned Special Public Prosecutor would further submit that the adjudication proceedings and criminal prosecution can be launched simultaneously and decision in the Adjudicating Proceedings is not necessary before initiating criminal prosecution.  Also, the accused have admitted their guilt before the said CESTAT proceedings and paid the differential duties and filed an application for refund of excess payment made by him and it shows that he has not agitated the orders of the CESTAT and on that basis also the charges against the accused has been proved by the prosecution.  The accused has tried to import insecticide by declaring it as fertilizers by way of misdeclaration and without payment of CV duty.  The charges against the accused were proved by the prosecution through the oral and documentary evidence of P.Ws.1 to 9 and Ex.P1 to P55.  The trial court, after careful consideration, found the accused guilty and sentenced. Therefore, the appeal deserves to be dismissed and the judgment of the trial court has to be confirmed.
20. The first appellant / 1st accused is in the business of import bio­fertlizers from1994 and based on the hearsay information, the respondent has initiated proceedings for mis­declaration of consignments, which has a component of an insecticide, but imported as a fertilizer. After detailed investigation, based on the scrutiny of the documents and statements of the Managing Director of the accused company, it is found by the respondent that during the period from September 2007 to December 2009, the accused company herein have imported 18 consignments under various Bills of Entries, including the consignment in BE No.331475, dated 12.10.2009 and BE No.376967, dated 8.12.2009.  Samples of the imported goods were taken in the presence of CHA of the Importer and sent for testing with M/s.Inspectorate Griffith and the Report of the Lab shows that the goods contained Oxymatrine of 0.41 % and therefore, it has to be treated as pesticide rather than fertilizer.

The Oxymatrine cannot be imported without registration with the Central Insecticide Board. However, the accused company has not obtained any such registration and therefore, there was a contravention of Sec.17 of Insecticide Act.  Those facts were admitted by both sides.

21. The first and foremost contention of the appellants is that physical samples werenot produced before the trial court. The present case has been filed under Customs Act.

However, being a criminal case, the prosecution has to follow the provisions of the Indian Evidence Act and the Criminal Procedure Code.  It is the case of the prosecution that five samples were taken from 18 consignments from the accused company and sent for testing to M/s.Inspectorate Griffith Pvt. Ltd.  Out of the five samples, one sample has been sent to the

Lab for testing and the remaining four samples were at the hands of the respondent. Therefore, there is every possibility to produce the samples before the trial court to prove their contention that they have taken five samples out of the 18 consignments, though the prosecution has relied on the seized samples for the alleged charge of mis­declaration to be bio­fertlizer.  The prosecution at the first instance, is expected to prove that the appellants have imported pesticide by falsely declaring it as bio­fertilizer, but, it has not been proved by the prosecution by producing the samples, though it is available with them.  On this aspect, the learned counsel for the appellant would submit that the trial court ought to have taken adverse inference u/s 114(g) of the Indian Evidence Act against the respondent for the non­production of the samples, that is, the physical evidence.  The learned counsel has also placed reliance of the Judgment of Hon’ble Supreme Court in Noor Aga ­ vs ­ State of Punjab and others (2010 (96) AIC 176),  in which it has been held that “Physical Evidence of a case of this nature being the property of court should have been treated to be sacrosanct.  Non­production thereof should warrant drawing of a negative inference within the meaning of section 114(g) of the Evidence Act. While there are such large number of discrepancies, if a cumulative effect thereto is taken into consideration on the basis of the permissive inference would be that serious doubts are created with respect to the prosecution’s endeavor to prove that fact of possession of contraband by the appellant.” In the present case also, the prosecution has not come forward to produce the samples as physical evidence before the trial court, though it is very much available with them.   Apart from this, the prosecution has not stated any reason for the non­production of physical evidence.  One another judgment relied on the side of the appellants in Jitendra vs ­ State of MP. (2003 (11) AIC ­ 390), in which it has been held that “In the trial it was necessary for the prosecution to establish by cogent evidence that the alleged quantities of charas and ganja were seized from the possession of the accused.  The best evidence would have been the materials which ought to have been produced during trial and marked as material objects.  There is no explanation for this failure to produce them. Mere oral evidence as to their features and production of panchanama does not discharge the heavy burden which lies on the prosecution.”

22. As stated earlier, the prosecution is on the bounden duty to prove that the seized samples were insecticides and not bio­fertilizer to prove the charges against the accused. In the absence of non­production of physical evidence, the court may take adverse inference against the respondent.   The respondent ought to have produced and established the charges against the accused through cogent evidence, for which, the best evidence would have been the seized samples.  Only on the basis of the Ex.P7 Lab Report, the trial court has come to a conclusion that the seized samples were insecticides and not bio­fertilizer. Also, the trial court has failed to consider the fact that the prosecution has never produced the seized samples before the trial court and no explanation has been given by them for the nonproduction of the seized samples.  In these circumstances, this court is of the view that the non­production of physical evidence, though it is available with the respondent, is fatal to the prosecution.
23. The learned counsel for the appellants would further submit that the prosecutionhas not examined Mahazar / Independent witnesses to prove the seizure and the confiscation of the goods from the appellants’ company and residential premises. W.1 Tmt.Shanthi, Examiner in SIIB, Customs House, Chennai and P.W.2 Tmt.Meenakshi Lakshminarayanan working in SIIB, Customs House, Chennai have been examined to prove the seizure and recovery of materials from the accused company.  In which, P.W.1 would depose that she had examined the goods of M/s.Penshibao Wang Pvt. Ltd. vide Bill of Entry 342786, dated 26.10.2009.  She had also deposed that she prepared a mahazar in the presence of two independent witnesses and the representative of CHA and obtained their signatures in that mahazar Ex.P1. However, the prosecution has not come forward to examine those independent witnesses to prove the alleged seizure of samples and confiscation of goods. She would further depose in cross­examination that “Except putting the signature in the mahazar, I do not know anything about the seizure, no sample seal was affixed in the mahazar.”  From which, the court could infer that the P.W.1 Tmt. Shanthi has acted in a mechanical manner.  The P.W.2 Meenakshi Lakshminarayanan would also depose that as per the instruction of Assistant Commissioner and Appraiser of SIIB on 27.10.2009 in the presence of two independent witnesses, namely, Hussain and Baskar, opened the Cargo in 80 drums and five samples were taken and sealed with SIIB Seal No.113.  She would further depose that the composition list revealed that the goods contained oxymatrine, which is a pesticide.  She had prepared Ex.P2 mahazar in the presence of the above mentioned independent witnesses.  The alleged independent witnesses for the mahazar have not been examined by the prosecution and no explanation has been given for the same.  Further, P.W.2 Tmt.Meenakshi Lakshminarayan on 29.1.2010, at 11 hours, said to have examined another container in Bill of Entry 376967, dated 8.12.2009 and samples were drawn from the consignments in five plastic bottles, sealed with Sl.No.113.  She had also confiscated the consignments and prepared mahazar Ex.P3 in the presence of witnesses Rangaraju and

Rajkumar.  On 11.1.2010, P.W.4 Thiru.Harendra has accompanied the Superintendent of

Customs, Headquarters Preventive Unit for the search conducted at the residential premises of Shri.Rajwant Sing in Bangalore.  He would depose that no incriminating documents were seized by the Superintendent of Customs and he had prepared a mahazar Ex.P4, which was written by him.  Through the evidence of P.W.4 it is made clear that nothing was recovered under the mahazar Ex.P4.  P.W.4 Thiru.Vijay Sri Ballari would depose in respect of the search of the residential premises of the accused at Bangalore on 11.1.2010.  At that time of search, three files and a cotton box are said to have been seized under the mahazar Ex.P5. However, those documents and cotton­box were not produced before the trial court.  On the other hand, Ex.P5 mahazar only produced before the trial court.  The independent witnesses for the mahazars Ex.P4 and P5 were also not examined and the documents and material objects seized through mahazars were also not produced before the trial court.  Therefore, the argument of the defence counsel that the non­examination of mahazar witnesses, would greatly affect the case of the prosecution, is an acceptable one.

24. Also, those samples were recovered by different officials from different places ondifferent dates. But, those samples have been given to the P.W.5 Leo Ilango and sealed under one and the same number, that is, 113.  The P.W.1 Tmt Shanthi and P.W.2 Meenakshi Lakshminarayan have prepared the mahazars Ex.P1, P2 and P3. As stated earlier, nothing has been recovered under the mahazar Ex.P4.  But there were independent witnesses.  Also as per Ex.P5 mahazar, three files and a cotton­box were said to have been recovered in the presence of two independent witnesses. The search and the seizure under Ex.P5 has been done by the Superintendent of Customs and the P.W.4 Shri.Vijay C.Bellari has only written the mahazar as per the instruction of the Superintendent of Customs.  However, the respondent has not come forward to examine the Superintendent of Customs to establish the search and seizure on 11.1.2010 and also the independent witnesses for the mahazar to prove the seizure of documents and cotton­box. Non­examination of the Superintendent of Customs, who has conducted the search and seized documents under mahazar, is not explained by the prosecution and it is considered as a fatal to them. Only on examination of independent witnesses to the mahazar Ex.P1 to P5, the court get to know about the procedure adopted by the witness for the seizure of the samples and confiscation of goods from the accused company and residential premises.  On this aspect, the learned counsel for the appellant has pointed out a judgment in 1994 ­ Crl.L.J. 020 (Mohammed Hussain Babamiyan Ramzan ­ vs ­ State of Maharashtra), wherein, it has been observed that “In veiw of this if the said panch witnesses, even if they were available for examination, their evidence would be required to be discarded on the ground that they were pliable witnesses.  Therefore, it does not mean, now, that prosectuion can contend that as the two panch witnesses were not available, the evidence of the police witnesses should not be accepted, if on scrutiny the same is found to be trustworthy.  Normally, it is expected that the investigating officer will take independent panch witnesses and if knowingly he has taken pliable witnesses as panch witnesses the entire raid would become suspect and, in such case, it would not be possible to hold that the evidence of police witnesses by themselves would be sufficient to base a conviction.  Therefore, really speaking, on this ground itself the conviction cannot be sustained.”  Once a procedure has been done in the presence of the independent witnesses, the prosecution has to examine those witnesses to prove the said procedure.  In the present case, the P.W.1 Tmt.Shanthi, P.W.2 Tmt.Meenakshi Lakshmi Narayanan and P.W.3 Thiru.Harendra have seized sampled and confiscated the consignment goods from the accused company under the mahazar Ex.P1 to P3 in the presence of two independent witnesses each. P.W.4.   Through Ex.P4 mahazar, no incriminating materials or goods were seized by the P.W.3 Thiru.Harendira.  He has prepared the mahazar in the presence of independent witnesses, but he has not come forward to say the names of the witnesses. Thiru.Vijay C.Bellari would depose in respect of the search and seizure conducted by the Superintendent of Customs and preparation of Ex.P5 mahazar in the presence of two independent witnesses. However, none of the witnesses were examined to prove the alleged seizure. Therefore, the non­examination of mahazar witnesses by the prosecution to prove the seizure of samples and recovery of goods creates a serious doubt on the alleged seizure and confiscation.
25. The next contention of the appellant is that the author of the Test Reports werenot examined before the trial court and it creates a serious doubt in the case of the prosecution. On the side of the respondent, the Test Results of M/s.Inspectorate Griffth Pvt. Ltd. were marked as Ex.P7, P47 and P48 and those documents have been marked through P.W.5 Leo John Ilango, who is the Investigating Officer of the respondent.  The samples have been sent to M/s.Inspectorate Griffth Pvt, Ltd. and they have conducted test and reports have been sent to the respondent.  However, the prosecution has not preferred to examine the Chemical Analyst of the Lab to prove the procedure in which the test have been conducted.  W.8 Thiru.Ramanan and P.W.9 Dr.Annapoorani were examined on the side of the prosecution to prove the test results Ex.P7, P47 and P48.  Both of the witnesses were from M/s.Inspectorate Griffth Pvt. Ltd.  P.W.8 Thiru.Ramanan would depose in the crossexamination that he is only a Valuer and not a Tester and also admitted the fact that he has no knowledge about the chemical analysis.  P.W.9 Dr.Annapoorani has given an opinion on the basis of the Test Report Ex.P7 given by the M/s.Inspecorate Griffth Pvt. Ltd. and she has not done the chemical analysis of the samples.  Therefore, it is made clear that the prosecution has examined two witnesses P.W.8 and P.W.9 to prove the Test Reports Ex.P7, P47 and P48, but, the said witnesses are not the witnesses for the chemical analysis and they are not competent to do the analysis. The Test Reports were marked through P.W.5 Leo John Ilango, who is the Investigating Officer in this case.  The witnesses P.W.8 and P.W.9 are neither qualified nor they have conducted the test to give evidence before the trial court. Further, they have not affixed their signature in Ex.P7, P47 and P.48.  Therefore, the nonexamination of the author of the test report is considered as fatal to the prosecution since the respondent has failed to establish the veracity of the test results.  In this regard, the learned counsel for the appellant would also pointed out a judgment in Vishakha Agro Chemicals Pvt. Ltd. and others ­ vs ­ Fertilizer Inspector cum Assistant Director of Agriculture,

Vishakapatnam and others (1997 (2) Crimes ­ 648 (AP)), in which, it has been held that “In the absence of such provision available in the Fertilizer Control Order, I am inclined to say, that in light of the provisions of Section 293 Cr.P.C., the prosecution ought to have taken steps to examine the author of the document Ex.P4.  Non­examining the author of the document Ex.P4, in my considered view, is fatal to the prosecution case to convict the accused guilty of committing the offence under these provisions when the prosecution case depends only on the report issued by the authority under the Fertilizer

Control Order, 1985”.  In the case on hand also, the prosecution has not taken any steps to examine the author of the documents Ex.P7, P47 and P48 and the non­examination of the author of those documents is considered as fatal to the prosecution to convict the accused guilty of committing the offences under these provisions, since the prosecution has entirely depends upon the Test Reports Ex.P7, P47 and P48 issued by M/s.Insepctorate Griffth Pvt.

Ltd.  The said facts have not been taken into consideration by the trial court.

26. One another contention raised on the side of the appellants is that the Test

Reports of the M/s.Inspectorate Griffth Pvt. Ltd., a private lab is not maintainable.  P.W.9 Dr.K.S.Annapoorani, in her cross­examination has conceded that “our laboratory is not registered under the Customs Empanelment.”  Therefore, through the evidence of P.W.9, it came to know that M/s.Insepctorate Griffth Pvt. Ltd. is not empanelled by the Customs for Chemical Analysis.  On perusal of records, it came to know that the respondent has not produced any document to prove the fact that M/s.Insepctorate Griffth Pvt. Ltd. has been empaneled by the customs for chemical analysis and testing.  Admittedly, the said company is a private lab.  In the nature of the present case, the respondent has to send the samples to the Central Insecticide Laboratory for the Analysis of the sample, but, it has been sent to a private lab, which has not been empaneled by the Customs.  Ex.P55 is only a circular, issued by the Customs, which contains the empanelment of Chartered Engineers, in which P.W.8 has also been recognised in the capacity as an Engineer for testing second hand machinery. As stated earlier, the prosecution has mainly depends upon Ex.P7,  Test Report, prepared by a private lab, but, the prosecution has failed to prove the veracity and credibility of the report. Though P.W.9 Dr.Annapoorani has admitted in her evidence that she has never tested the sample and gave her opinion on the basis of the Test Result Ex.P7.  Ex.P7 has not been proved by examining the person, who had conducted the chemical analysis. However, Ex.P7 has been relied on by the trial court to found the accused guilty.

27. Further, the main contention of the appellant / accused is that the prosecutionthough produced electronic evidence Ex.P25, 28, 29 and 30, it has not been proved by producing the certificate under Sec.65B of Indian Evidence Act. Those documents were marked without the  certificate under Sec.65B of Indian Evidence Act.  The trial court has also not called for the said certificate before marking of those documents.  It is mandatory as per Sec.65­B of Indian Evidence Act, that an electronic document shall be marked only after the production of the certificate  under Sec.65B of Indian Evidence Act.  However, in the case on hand, the trial court has not only marked those documents without the said certificate, but also, placed reliance on those documents without the certificate under Sec.65B of Indian Evidence Act and it is considered as a lacuna, which affects the case of the prosecution.  Also, Sec.138(C)(4) of Customs Act mandates an officer, who has given a statement and wherein the admissibility of a computer printout is considered, a certificate identifying the document and its particulars ought to be produced.  Neither the provision under Sec.65B Indian Evidence Act, nor the provision u/s 138(C)(4) of the Customs Act has been followed though it is mandatory.
28. Further, to prosecute the accused under Insecticide Act, 1968, sanction isnecessary. As per Sec.31 of Insecticide Act, the prosecution cannot be launched without prior sanction from the State Government, especially, when the complaint is filed u/s 17 of the Insecticide Act. Obtaining sanction for prosecution is a condition precedent and therefore, the respondent ought to have obtained proper sanction from the State Government before filing a complaint u/s 17 of the Insecticide Act. In Indofil Chemicals Company,

Bombay and others ­ vs ­ Kunwarsingh, Madhaosingh Mahane and another (AIR

2017, SC 3421), it has been held by the Hon’ble High Court that “as far as the question of sanction is concerned, there is no dispute that a sanction is a condition precedent for a prosecution under the Act.  Sec.31 of the Insecticide Act, 1968 clearly provides that no prosecution lies except with the written sanction of the State Government.”  In the case on hand, the accused have been charged u/s 17 of the Insecticide Act and therefore, written sanction of the State Government as per Sec.31 of the Act is mandatory.  Without such sanction, the complaint itself is not maintainable.  It is the argument of the Special Public Prosecutor that the appellants were acquitted from the charges u/s 17 of the Insecticide Act and therefore, sanction of the State Government is not at all necessary.  As already stated, to launch a prosecution, sanction u/s 31 of the Insecticide Act is mandatory and therefore, the argument of the respondent is not sustainable.

29. The P.W.1 Tmt.Shanthi, P.W.2 Tmt.Meenakshi Lakshmi Narayanan and P.W.3

Thiru.Harendra have deposed before this court that they have been instructed by the Assistant Commissioner, Customs to make a search and as per the instruction, they have gone to the accused company and premises, made the search and seized the samples and confiscated the goods.  However, Search Warrants have not been produced before the trial court to prove the said fact, which is also considered as fatal to the prosecution.

30. Considering all the above discussion, the court is of the view that the prosecutionhas miserably failed to prove the charges against the accused through oral and documentary evidence and the trial court has also, without considering those facts, convicted the accused and sentenced them to undergo imprisonment and to pay fine and it has to be interfered with by setting aside the judgment.
31. In the result, the appeal is allowed. The Judgment passed by the Learned

Additional Chief Metropolitan Magistrate (E.O.I), Egmore, Chennai in

E.O.C.C.No.243/2012, dated 18.12.2019 is hereby set aside.  The accused is set at liberty.

Dictated to the stenographer, typed by him directly, corrected and pronounced by me in  the open Court, on this the 18^th day of November, 2022.

Sd/­xxxxx

PRINCIPAL SESSIONS JUDGE.