1. Heard Sri Anurag Khanna, Learned Senior Advocate, assisted by Sri Rahul Agarwal, Ms. Tanya Makker & Sri Piyush Kant Shukla, Learned Counsels for the applicant and Sri Dhananjay Awasthi, Learned Counsel for the opposite party.

2. The instant bail application has been filed on behalf of the applicant, Peeyush Kumar Jain, with a prayer to release him on bail in Complaint Case No. 80798 of 2022 (DRI Case No. 13 of 2021), under Section 135 of the Customs Act Police Station DRI Lucknow, Zonal Unit, during pendency of trial.

3. The brief facts against the applicant are that during search, the officers of Director General GST Intelligence (DGGI) Ahmedabad, Zonal Unit Ahmedabad at the premises of M/s. Odochem Industries, Jain Street, Kannauj, U.P., also Housing residence of the applicant, 32 foreign original gold bars, weighing approximately 23 Kgs., were recovered on 27-12-2021. The brand of foreign making were found on some of gold bars. The applicant could not produce any document for possessing foreign original gold bars. The Government valuer certified gold bars as 24 carats gold. The officers of DGGI have ceased approximately Rs. 196.57 Crores under Section 67 of CGST Act, 2017 from the applicant and is alleged that it is an amount whereon payment of GST has been evaded. After investigation was completed a complaint under Section 135 of the Customs Act, 1962 has been filed before Special Chief Judicial Magistrate, Economic Offences, Kanpur Nagar.

4. Learned Counsel for the applicant has submitted that in the remand application filed before the Directorate Revenue Intelligence (D.R.I.) reliance on the statements of applicant recorded under Section 108 of the Customs Act have been made. The D.R.I. has no evidence to prove that the applicant was involved in smuggling of the gold of foreign origin. Only because of marking of foreign origin on the gold ceased, it is not established that it was smuggled gold. It may have been imported in the country through proper procedure thereafter sold further. Applicant has stated that he had purchased gold locally and the statement recorded by D.R.I. officers was under duress and coercion and cannot be read against the applicant at this stage. The panch witnesses were brought by D.G.I. Officers and were not local witnesses. Applicant is willing to deposit customs duty, as may be applicable regarding ceased currency amount under protest and without waving his right to contest the alleged liability. The investigation has already been completed against the applicant and hence keeping him in jail will be of no avail. Applicant has no passport and will comply the conditions as may be imposed by this Court.

5. Learned Counsel for the applicant has relied upon the case laws, Shevantilal Karsondas Modi v. State of Maharashtra and Another, (1979) 2 Supreme Court Cases 58; Noor Aga v. State of Punjab and Another,  16 Supreme Court Cases 417; Union of India v. Kisan Ratan Singh and Others, 2020 (372) E.L.T. 714; Gopi Chand Soni v. CESTAT, 

6. Learned Counsel for the opposite party, Shri Dhananjay Awasthi, has vehemently opposed the bail application and relying on his counter affidavit he has submitted that illegal gold of foreign marking and cash has been recovered from the applicant. The sanctioning authority has directed the prosecution of the applicant. He has relied upon the following case laws:- Zaki Ishrati v. Commr. of Customs & Central Excise, Kanpur,2013 (291) EXT. 161 (All.); Surjeet Singh Chhabra v. Union of India,  1997 (89) E.L.T. 646; R.S. Company v. Commissioner of Central Excise, 2017 (351) E.L.T. 264 (M.P.); Romesh Chandra Mehta v. State of West Bengal,  1999 (110) E.L.T. 324; Naresh J. Sukhwani v. Union of India,1995 (11) TMI 106 : 1996 (83) E.L.T. 258 (S.C.).

7. This Court finds that in the case of Kishan Ratan Lal (supra) the Bombay High Court has held in the absence of any corroboration by any independent and reliable witness the statement recorded under Section 108 of the Customs Act cannot be read against the accused and has acquitted the accused. In the case of Noor Aga (supra), relied upon by the Learned Counsel for the applicant, Apex Court has held that more serious the offence stricter is degree of proof in relation to the shifting of burden of proof under Section 54 of Narcotic Drugs and Psychotropic Substances Act, 1985. It has further held that confession made under Section 108 of Customs Act should be in consonance with Article 20 of the Constitution of India and it cannot be used in any manner under Section 138B of the Customs Act. In the case of Gopi Chand Soni and Another (supra) this Court held that unless there was any corroborative evidence the statement under Section 108 of the Customs Act cannot be read against the maker of the statement. The possession of the gold, even if it was smuggled, would not be under purview of the Customs Act unless it was established by reliable evidence that gold was smuggled and brought by the applicant or by his agent. Finally in the case of Shevantilal Karsondas (supra) the Apex Court held that confession made before Customs officer as a result coercion cannot be basis of conviction under Section 135(1)(a)(b) of the Customs Act.

8. In the judgment in the case of Zaki Ishrati (Supra) relied upon by the Learned Counsel for the opposite party, this Court found that since the accused did not recorded his retraction of admission before the Revenue Authorities on production before the Magistrate when he was produced before him therefore it could at best be treated as representation/complaint to the Collector of Central Excise. The judgment of the Apex Court in the case of Surjeet Singh Chhabhra (supra) held that statement under Section 108 of the Customs Act even after the retraction is binding. The Madhya Pradesh High Court in the case of R.S. Company (Supra) has held that there being cogent, clear and clinching evidence of clandestine manufacture and removal of tobacco product, Gutkha, the tribunal was justified in concluding that it was done by assessee without payment of excise duty. In the case of Romesh Chandra Metha (supra) the Apex Court held that Customs officer is not a police officer and statements made before him under Section 108 of the Customs Act. are admissible in evidence and not hit Section 25 of the Evidence Act. In the case of Naresh J. Sukhwani (Supra), it has been, held that statement under Section 108 of Customs Act cannot be read against the co-accused.

9. After hearing rival contentions this Court finds that at present the prosecution is relying upon the statement of applicant recorded under Section 108 of Customs Act which as per the judgment in the cases of Kishan Ratan Singh (supra) Gopi Chand Soni (supra) and Shevantilal Karsondas Modi (supra) cannot be a sole basis of conviction in absence of corroborative evidence. At the stage of consideration of bail application of the accused this Court finds that complaint against the applicant has already been filed, show cause notice for confiscation of gold and imposing penalty has already been issued against the applicant. In order to attract Section 123 of Customs Act, 1962, it is essential that goods must be smuggled. It means goods of foreign origin and imported from abroad. There must be something proving their importation from abroad. Only an account of being unaccounted they cannot be inferred to be smuggled, they may be stolen too. Applicant claims that he has no passport and will not leave the country his whole family and business is at Kannauj and Kanpur. There is no possibility of tampering with witnesses. He has no criminal history and therefore as per the judgment of the Apex Court in Sanjay Chandra v. C.B.I., 2012 (1) SCC 40 bail cannot be refused to the applicant only because of being involved in economic offence and it would not be in the interest of justice. The applicant is in jail since 27-12-2021 and has no criminal history. The Apex Court in the case of Sanjay Chandra (supra) has held:-

"23. Apart from the question of prevention being the object of refusal of bail, one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted for it or not or to refuse bail to an unconvicted person for the purpose of giving him a taste of imprisonment as a lesson.

24. In the instant case, we have already noticed that the "pointing finger of accusation" against the appellants is "the seriousness of the charge". The offences alleged are economic offences which have resulted in loss to the State exchequer. Though, they contend that there is a possibility of the appellants tampering with the witnesses, they have not placed any material in support of the allegation. In our view, seriousness of the charge is, no doubt, one of the Bail Appln. 21/2022 Page 6 of 7 relevant considerations while considering bail applications but that is not the only test or the factor; the other factor that also requires to be taken note of is the punishment that could be imposed after trial and conviction both under the Penal Code and the Prevention of Corruption Act. Otherwise, if the former is the only test, we would not be balancing the constitutional rights but rather "recalibrating the scales of justice".

25. The provision of Cr.P.C. confer discretionary jurisdiction on criminal courts to grant bail to the accused pending trial or in appeal against convictions; since the jurisdiction is discretionary, it has to be exercised with great care and caution by balancing the valuable right of liberty of an individual and the interest of the society in general. In our view, the reasoning adopted by the Learned District Judge, which is affirmed by the High Court, in our opinion, is a denial of the whole basis of our system of law and normal rule of bail system. It transcends respect for the requirement that a man shall be considered innocent until he is found guilty. If such power is recognised, then it may lead to chaotic situation and would jeopardize the personal liberty of an individual."

10. Keeping in view the nature of the offence, argument advanced on behalf of the parties, evidence on record regarding complicity of the accused, larger mandate of the Article 21 of the Constitution of India and the dictum of Apex Court in the case of Dataram Singh v. State of U.P. and Another reported in (2018) 3 SCC 22 and recent judgment dated 11-7-2022 of the Apex Court in the case of Satendra Kumar Antil v. C.B.I., passed in S.L.P. (CRL.) No. 5191 of 2021 and without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail. The bail application is allowed.

11. Let the applicant be released on bail on his furnishing a personal bond and two sureties each in the like amount to the satisfaction of the Court concerned subject to following conditions. Further, before issuing the release order, the sureties be verified.

(1) The applicant will surrender his passport, if any, and not to leave the country without permission of the Trial Court concerned.

(2) He will furnish bank guarantee of Rs. one crore in favour of the opposite party which shall be forfeited in favour of opposite party in case of violation of any of conditions imposed in this order.

(3) The applicant shall not tamper with the prosecution evidence by intimidating/pressurizing the witnesses, during the investigation or trial.

(4) The applicant shall cooperate in the trial sincerely without seeking any adjournment.

(5) The applicant shall not indulge in any criminal activity or commission of any crime after being released on bail.

(6) That the applicant shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer.

(7) The applicant shall file an undertaking to the effect that he shall not seek any adjournment on the dates fixed for evidence and when the witnesses are present in Court. In case of default of this condition, it shall be open for the Trial Court to treat it as abuse of liberty of bail and pass orders in accordance with law to ensure presence of the applicant.

12. In case of breach of any of the above conditions, it shall be a ground for cancellation of bail granted to the applicant.