Madras HC Slams DRI for Shoddy Probe In Gold Smuggling Case; Says Main Culprits Let Off, Mule Punished

The Madras High Court has reduced the penalty on hired labour for transportation of smuggled gold bars to Rs. 1 Lakh and held that Directorate of Revenue Intelligence (DRI) has conducted an incomplete probe into SIM Cards with Fake IDs in Gold Smuggling Case.

The bench of Justice R.Suresh Kumar and Justice C.Saravanan has observed that there are several infirmities in the shoddy investigation carried out by the Directorate of Revenue Intelligence (DRI). The investigation was shoddy only to allow the actual smugglers of the gold bars to go scot-free and to punish the Respondent who merely used cheap labour to transport the smuggled gold bars. It is clear that the Customs Department and the Directorate of Revenue Intelligence (DRI) have allowed the main culprit to go scot-free.

The bench stated that it was incumbent on the part of the Customs Department to have also taken steps to get to the root of modus operandi adopted by the smugglers right from the registration of mobile numbers with fake names / identity and how an ordinary person like the Respondent with modest means of income could possess huge quantity of gold bar and where the Respondent was employed.

The bench noted that no serious steps were taken by the Customs Department or by its elite wing of investigators in the Directorate of Revenue Intelligence (DRI) to trace out the said Murugan and Batcha alias Pitchai or the Murgan even though there were several calls made from the mobile SIM numbers registered in the name of Krishanaveni, Nagendran and Latha which were given by the Respondent on 23.01.2017 to the Officers at the time of seizure.

The bench pointended out that the accused has not stated why he was using a Mobile Phone with SIM which was in the name of Krishnaveni. The accused has also not given any explanation as to why he was not having a mobile SIM registered in his name. It is quite possible this information was elicited but was deliberately not kept in the official records to allow the real persons behind the scene out of the bounds of law.

The bench noted that the accused was merely a puppet in the hands of the smugglers, who are funding and bankrolling the litigation for the accused both before the Original Authority, First Appellate Authority before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and before the Court. A person like accused with modest means cannot possibly have the resource except in case of pro bono appearance.

Background

On a specific intelligence that a person, who was said to be travelling from Devakottai and was carrying 2 smuggled crude gold bars of foreign origin/foreign marked weighing 1720 grams and 1377 grams in a black colour backpack, the Directorate of Revenue Intelligence (DRI) intercepted the Respondent when the Respondent reached the Pallavaram Bus Stand. The Respondent was arrested on 23.01.2017 and was later released on a personal bond.

On the date of arrest of the Respondent i.e., on 23.01.2017, a mahazar was drawn and the two crude gold bars were seized from the Respondent. At the time of arrest and during the interrogation, the Respondent had initially denied possessing the smuggled gold bars of foreign origin with foreign mark in person or in his luggage.

However, on a persistent enquiry by the officers of the Directorate of Revenue Intelligence (DRI), the Respondent admitted that he was indeed carrying gold bars which were concealed and kept in his bag. The Respondent thus handed over the bag to the Officers of the Directorate of Revenue Intelligence (DRI).

In a voluntary statement, the Respondent also stated that one person named Murugan aged about 55 years from Pudhupattinam in Ramanathapuram District had approached him on 22.01.2017 for carrying the smuggled gold from Srilanka for being handed over and delivered to one Batcha alias Pitchai at Chennai for a monetary consideration of Rs.5,000 and that the Respondent agreed to carry the gold and thus carried the gold packed in a plastic cover and got into the bus that would go to Aranthangi and further proceed to Chennai via., Trichy.

Conclusion

The court noted that Order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) is liable to be set aside. Since the Respondent was only a carrier with no means, the court is inclined to partly modify the penalty imposed on him. It is reduced to Rs.1,00,000/- to allow him to start his life afresh.

Case Details

Case Title: Commissioner of Customs Versus Mohammed Ali Jinnah

Case No.: C.M.A.No.2685 of 2023 and C.M.P.No.24899 of 2023

Date: 09.05.2025

Counsel For Petitioner: Sai Srujan Tayi, Senior Standing Counsel

Counsel For Respondent: B.Kumar, Senior Counsel

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