Amendment to Customs Act, 1962, worries trade

EXIM MATTERS

Some of the proposals in the Finance Bill, 2008 to amend the provisions of the Customs Act, 1962, have spread concern in the trade that the government is trying to put too much power in the hands of its officers and prescribe more stringent punishments.

The government proposes an amendment to Section 108 of the Customs Act, 1962 empowering any gazetted officer of Customs to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.

The government wants to increase from Rs 10,000 to Rs 100,000 the maximum penalty for contravention of any provision of the Customs Act, 1962, for which no specific penalty is provided.

More powers in the hands of Customs officers means more worry for the trade because such powers have, in the past, been misused. In an enquiry regarding valuation of imported goods, the Superintendent of Customs had summoned high ranking officers of Tata Iron and Steel Co Ltd. The Orissa High Court held [995 (75) ELT 502] that charge of undervaluation would make the goods liable for confiscation bringing them within the ambit of definition of 'smuggled goods' in the Customs Act. The High Court, on the argument that status of the person summoned is of no consequence, dismissed the protests that Tatas cannot be said to be involved in smuggling activities and that the impugned notices were nothing but harassment to the high ranking officers of the Company.

Before July 13, 2006, any gazetted officer of Customs could issue summons. Thereafter, the law was amended restricting the powers to summon to 'any gazetted officer duly empowered by the Central government in this behalf'.

However, no notification was issued empowering any officer to summon till February 20, 2008, when notification no. 8/2008-Cus empowered 'all gazetted officers of Customs' to issue summons.

Now, the Finance Bill seeks to formalise that position through amendment to Section 108.

The legality of statements recorded between July 13, 2006 and Feb 20, 2008 is doubtful. The Courts have held that a person summoned must be informed if the investigating officer desires to record a statement and use any inculpatory statement against the summoned person. The person may consult a legal practitioner and he/she is not an 'accused' but one considered as having information material to the investigations.

Section 108 does not compel a person summoned to incriminate himself. He can maintain studied silence, if the answers to the questions put to him are likely to incriminate him. In such a situation, Section 193 I.P.C. is not attracted. Right of silence is also not an offence and it cannot be said to be an obstruction to the proceedings referred to under Section 108 ibid. [1992 (57) ELT 568 (AP)].

Awareness of such judicial pronouncements can help cope with the charade of summons and investigations.

tncr@sify.com