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CASE NO.: Writ Petition (crl.)  114 of 2006

PETITIONER: Alpesh Navinchandra Shah

RESPONDENT: State of Maharashtra & Ors

DATE OF JUDGMENT: 26/02/2007

BENCH: Dr. AR. Lakshmanan & Altamas Kabir

JUDGMENT:

J U D G M E N T

Dr. AR. Lakshmanan, J.

The above writ petition was filed under Article 32 of the  Constitution of India for issuance of a Writ of Habeas Corpus  or any other appropriate writ quashing and setting aside the  order of detention dated 12.01.2005 under COFEPOSA Act,  1974 issued against the petitioner by respondent No.2 -  Principal Secretary (Appeals and Security), Government of  Maharashtra, Mumbai.   The petitioner was detained under Section 3(1) of the  Conservation of Foreign Exchange and Prevention of  Smuggling Activities Act, 1974 (hereinafter referred to as  "COFEPOSA Act") in pursuance of the impugned order of  detention.  The petitioner by way of this writ petition is  challenging the legality and validity of the impugned order of  detention passed by respondent No.2 at pre-execution stage in  the peculiar facts and circumstances of this case.  It is stated  that two similar orders of detention dated 12.01.2005 and  31.01.2005 were issued under the COFEPOSA Act by  respondent No.2 against the petitioner Alpesh Navinchandra  Shah and his brother Kamlesh Shah respectively.  The  detention order has already been served upon Kamlesh Shah.   The grounds of detention order and the documents relied upon  in the case of the petitioner are identical in content and  material.   The brief facts of the case are mentioned in seriatim as  under:          In or about, August, 2004 M/s. Perfect Trading Co.  (proprietorship firm of Shri Rajendra Mamgaim) imported Ball  bearings in five containers. On 3.9.2004, consignments of mis- declared consignments were intercepted by the DRI officials.  The petitioner and his brother were arrested on 4.9.2004 by  the Intelligence Officers, DRI, Mumbai Zonal Unit primarily on  the allegations that they have been indulging in import of high  quality and high value Ball Bearing and were clearing the  same by evading duty of custom. The Addl. Chief Metropolitan Magistrate, 3rd Court,  Esplanade, Mumbai vide Order dated 23.9.2004 directed to  release the petitioner and his brother on bail imposing  conditions including their regular attendance in the  Department and the imposition of an embargo not to leave the  country without the prior permission of the Court. Impugned Detention Order bearing No. PSA 1204/21 (2)/  SLP-3(A) dated 12.1.2005 was issued by respondent No.2 for  detaining the petitioner ostensibly under the provisions of  COFEPOSA Act 1974.  Similar Order No. PSA 1204/21

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(1)/SLP-3 (A) dated 31.1.2005 was also issued to detain Shri  Kamlesh Shah, the brother of the petitioner. Show Cause Notice dated 23.2.2005 was issued to the  petitioner and his brother by the DRI, Mumbai Zonal Unit.  Pursuant to the said show cause notice, the application for  settlement under Section 127 B of the Customs Act, 1962, was  filed on 19.4.2005 by M/s Perfect Trading Co. as Applicant  and the petitioner, his brother and others as Co-Applicants  before the settlement Commission, Mumbai.  During the course of the admission hearing of the  aforesaid settlement application, the petitioner came to know  that the Order dated 27.12.2005 has been passed by  respondent No.2 for detaining him while invoking section 3 (1)  of the COFEPOSA Act, 1974. Accordingly, at the stage of the  admission hearing, the Settlement Commission was urged to  make recommendation to the Detaining Authority for the  revocation of the Detention Order.         The Settlement Commission, vide order dated  03.01.2006, rejected the prayer by adopting the reasoning  narrated in the case of Vipul Gor, Proprietor of M/s Sonam  Enterprises (Misc. Order No.12/2005 \026 CUS dated 19.12.2005)  wherein it was, inter alia, held that the Commission did not  have any jurisdiction to make a recommendation to the  Detaining Authority for revocation of a Detention order and  further held that the petitioner and his brother would be at  liberty to take recourse to any other legal remedy available to  it for lifting of the detention order whether by the sponsoring  authority, detaining authority or the courts.  However, the  Settlement Commission allowed the application for settlement  to be proceeded with.    The case was finally heard by the Settlement Commission  on 1.3.2006. Vide Final Order bearing No.17/CUS/2006 dated  7.3.2006, the Settlement Commission allowed the Settlement  Application and settled the case on payment   of Customs  Duty of Rs. 1,40,52,959/-. In terms of sub-section (1) of  section 127 H of the Customs Act, 1962, and in view of full  and true disclosure, the Commission granted immunity to all  the Applicants including the petitioner from any penalty that  could be levied under the Customs Act and also from the  prosecution under the Customs Act, 1962, as well as under  IPC. It is evident from the Order that a copy of the said Final  Order of complete settlement of the case, was also forwarded  to the Detaining Authority by the Settlement Commission.  It is also pertinent to note that though the Settlement  Commission vide Section 127H of the Customs Act, 1962 is  empowered to impose such conditions as it may deem fit for  grant of immunities, deemed it fit not to impose any condition  on the petitioner, in spite of the fact that detention Order  having been issued against the petitioner, was before the  Commission and granted full immunities and settled the case  giving quietus to all issues. In spite of complete settlement of all disputes among the  petitioner and the Revenue, after the case was fully settled by  the said Final Order dated 7.3.2006 of  ’compromise"/"settlement" of the entire case, the officers of  DRI apprehended the Petitioners brother and he was detained  under the Detention Order dated 31.1.2005. The petitioner is also relying upon the copy of order dated  5th May 2005 published in Gazette of Maharashtra  Government at page 56, Page IV-A, inter alia, showing that the  Order No. PSA 1204/21(2)/ SLP-3(A) was issued against the  petitioner on 12th January, 2005 by the respondent. Being aggrieved by the said order of detention which is  based upon the same grounds as reflected in the show cause

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notice and which were considered in the proceedings before  the Settlement Commission, the petitioner preferred the above  writ petition for quashing of the impugned detention order.  We heard Mr. Vikram Chaudhri, learned counsel for the  petitioner and Mr. Ravindra Keshavrao Adsure, learned  counsel for the contesting respondent.   Learned counsel for the petitioner, at the time of hearing,  made the following submissions:- In the light of the fact that as per provisions of Customs  Act, 1962, the case of the petitioner is ’settled’ and he has  been granted unconditional immunities by the Settlement  Commission, chasing the petitioner for detaining him under  the COFEPOSA Act would be contrary to the settled  proposition of law that: i.      the personal liberty is one of the most cherished  freedoms more important than any other guaranteed  under the constitution and in a democracy governed  by rule of law the drastic power to detain a person,  without trial, must be strictly construed. ii.     Draconian power of detention must be exercised in  rarest of rare cases and only as a preventive measure  and not punitive. iii.    The law pertaining to preventive detention must be  meticulously followed with substantively and  procedurally by the detaining authority. iv.     Section 3(1) of the Act allows the detention of a person  only if the appropriate detaining authority is satisfied  that with a view to preventing such person from  carrying on any of the offensive activities enumerated  therein, it is necessary to detain such person. v.      The satisfaction of the detaining authority is not a  subjective one based on the detaining authority’s  emotions, beliefs or prejudices.  There must be a real  likelihood of the person being able to indulge in such  activities, the inference of such likelihood being drawn  form objective data based on surrounding  circumstances. vi.     The possibility of prosecution is having a direct  bearing on the subjective satisfaction of the Detaining  Authority. vii.    Unsuccessful judicial trial may not operate as a bar to  a detention order, but the discharge cannot be said to  be entirely irrelevant and of no significance. viii.   The detention power cannot be used to subvert,  supplant or to substitute the punitive law of penal  code. At the time of hearing, the judgment rendered by this  Court in Hira Lal Hari Lal Bhagwati vs. CBI, New Delhi,  2003 (5) SCC 257 (Brijesh Kumar and Dr. AR. Lakshmanan,  JJ) was also relied on and our attention was invited to paras  44 & 45 of the said judgment which read as under:  "44. \005\005. The declarant could not be dragged and chased in  criminal proceedings after closing the other opening making  it a dead end. It is highly unreasonable and arbitrary to do  so and initiation and continuance of such proceedings lack  bonafides. 45. In the background given above, there is every reason to  legally infer that the position as it stood, in regard to the  criminal prosecution and conviction on the date the  declaration was filed, as conditions precedent to settlement  under the Scheme, would also stand finalized on full and  final settlement of the matter under the Scheme. That is to  say the position that no criminal prosecution was pending  against the declarant on the date of filing of the declaration  nor he stood convicted for such an offence in relation to the

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matter covered under the declaration, it would stand  finalized with acceptance of the declaration and settlement of  the matter fully and finally. Later on, the declarant could not  be or continued to be subjected to criminal prosecution to  alter the position as it stood on the relevant date of the  submission of declaration and get him convicted for such  offences in respect of which, if he stood convicted earlier  while filing statement he would not have been entitled to  seek the benefit under the Scheme. The appellants virtually  foreclosed their right to further pursue the proceedings  before the authorities or courts of law challenging the  legality, validity or the tax liability in terms of the Scheme.  Undoubtedly, if the appellants’ appeal which was pending in  this Court against the order of CEGAT relating to the tax  liability, had been allowed it might have affected the criminal  proceeding too on merits. In certain circumstances, it could  be put up as a defence by the declarant, in the criminal case  but in terms of the scheme he was bound to withdraw his  appeal. The criminal prosecution could not be allowed to  proceed by putting an end to a possible defence, before  hand. It certainly amounts to abuse of process of law. The  appeals thus deserve to be allowed. Placing reliance on the above judgment, learned counsel  for the petitioner urged that the detention order No. PSA  1204/21(2)/SPL-3(A) issued against the petitioner be quashed  and set aside without insisting the petitioner to undergo  detention.  Learned counsel for the petitioner further submitted that  the impugned order of detention is contrary to the spirit of  settlement and legislative intent behind the scheme of  settlement enacted under the Customs Act, 1962.  i.      The Settlement Commission came into being as a  culmination of the report submitted by the Wanchoo  Committee set up for toning up the administration of  direct taxes.  Para 2.32 of the Wanchoo Committee’s report  reads as:  "This however, does not mean that the door for  compromise with an errant tax-payer should forever  remain closed. In the administration of fiscal laws,  whose primary objective is to raise revenue, there has  to be room for compromise and settlement. A rigid  attitude would not only inhibit one-time tax-evader or  an unintending defaulter from making a clean breast  of his affairs, but would also unnecessarily strain the  investigational resources of the Department in cases of  doubtful benefit to revenue, while needlessly  proliferating litigation and holding up collections. We  would, therefore, suggest that there should be a  provision in the law for a settlement with the tax-payer  at any stage of the proceedings. In the United  Kingdom, the ’confession’ method has been in vogue  since 1923. In the U.S law also there is a provision for  compromise with the tax payer as to his tax liabilities.  A provision of this type facilitating settlement in  individual cases will give this advantage over general  disclosure schemes that misuse thereof will be difficult  and the disclosure will not normally breed further tax  evasion. Each individual case can be considered on its  merits and full disclosures not only of the income but  of the modus operandi of its build up can be insisted  on, thus sealing off chances of continued evasion  through similar practices."  

The recommendation of Wanchoo Committee has been

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quoted with approval by this Court in the case of CIT  (Central) vs. B.N.Bhattacharjee and Another (1979)  118 ITR 461- SC. On the above basis, in the course of the Budget Speech  in 1992, Hon’ble the then Finance Minister announced as  under:- "A settlement Commission was established in 1976  under the Income Tax Act, 1961. I propose to set up  a Settlement Commission, on similar lines, for  dealing with Customs and Central Excise disputes  between the Department and the assesses. I trust  this will help in speedy settlement of tax disputes."

It is submitted that in spite of the above speech of the  Finance Minister in 1992, it was only in the Finance Bill 1998  that provisions were made to insert Chapter XIVA in the  Customs Act for creation of Settlement Commission and the  provisions relating to the Settlement Commission came into  effect vide Act 21 of 1998, Section 102 w.e.f. 01.08.1998.  In  the Finance Bill of 1998, Clause 105 seeks to insert Chapter in  the Customs Act, 1962 to provide for setting up of a Customs  and Central Excise Settlement Commission on the lines of a  similar commission already working under the Income Tax  Act, 1961.  Learned counsel for the petitioner further submitted that:   i.      Since the legislature itself has created Settlement  Commission for generating Revenue and has also made  provisions for release of the goods on payment of duty  and has also made provisions for granting immunity from  prosecution under the Customs Act, 1962 under the  Indian Penal Code and also under the other Central Law,  it is clear that the intention of the Legislature was more  on Revenue aspect rather than prosecution and  punishment aspect or in continuing with multiple  litigations.  He submits that it would be unjust unfair  and unreasonable if a person is made to suffer preventive  detention mainly after his application for settlement is  allowed to be proceeded with, and after realisation of the  Customs duties not only the goods are ordered to be  released, but on considering the co-operation extended  by him in the settlement proceedings, the Settlement  Commission has also granted to him immunity from  prosecution under the Customs Act, 1962 as well as  under the IPC.  He further submits that this Court in the  case of Sadhu Roy has held that, if there is cast iron  case against the person, then he should be prosecuted  rather than detained under the preventive detention law,  which is softer measure. He submits that when under the  law the person is immuned from prosecution which is a  stronger deterrent than detention, there is no reason as  to why the same person should be detained preventively  under a softer measure.  ii.     the act of detaining such person whose Settlement  Application under the statutory provisions of Customs  Act, 1962 has been allowed to be proceeded with and  specifically whose case has been settled, would be  discriminative and arbitrary as against the person who  does not approach the Settlement Commission and does  not settle their case and thus continue to damage the  economy of the country. Learned counsel submits that  for the reason of discrimination and arbitrariness of the  detention order against a person who is willing to or has  settled the case against the petitioner, the detention  Order is liable to be quashed and set aside because it  would become punitive and how would the punitive

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Order would survive when the application for settlement  of the case with prayers for immunity from prosecution  has been allowed to be proceeded with and the case has  been fully settled? iii.    when the Settlement Commission grants immunity to a  person under Section 127H of the Customs Act, 1962,  the Settlement Commission regularizes the act of the  person which was supposed to be violative of the  provisions of the Customs Act, 1962, meaning thereby  that whatever was alleged to have been committed by the  said person becomes non-est, as if he has not committed  any breach of the Customs Act, 1962, the person  becomes a person who has not at all committed any act  or omission in respect of the goods under section 111 of  the Customs Act, 1962 and therefore in such a situation  where there is no act or omission on the part of the  person who approaches the Settlement Commission and  gets immunity from prosecution and penalty, a Detention  Order under any clause of section 3(1) (i) to 3(1) (v)  cannot sustain. Learned counsel for the petitioner,  therefore, submits since the petitioner’s application for  settlement of the case has been allowed to be proceeded  with and his case has been finally settled, the impugned  order of detention against the Petitioner has become an  order which is not sustainable in law.

Our attention to the preamble of COFEPOSA Act, 1974  was invited which reads as under:  "COFEPOSA Act, 1974, as per its preamble is an Act to  provide for preventive detention in certain cases for the  purpose of conservation and augmentation of foreign  exchange and prevention of smuggling activities and for  matters connected therewith because the violations of  foreign exchange regulations and smuggling activities are  having an increasingly deleterious effect on the national  economy and thereby a serious adverse effect on the  security of the state."  

Learned counsel for the petitioner submits that it was  clear from the preamble of the COFEPOSA Act that only in  certain cases the preventive detention is provided for  conservation and augmentation of foreign exchange and  preventing the smuggling activities which have deleterious  effect on the national economy. He submits that the above  objective of the COFEPOSA Act, 1974 is fulfilled by the Order  of the Settlement Commission in as much as when a case is  settled on payment of the Customs duty, there would be no  deleterious effect on the national economy, on the contrary,  even if after settlement of case the detention order is allowed  to be continued, the legislative intent in introducing the  settlement provision would be defeated which may have  adverse and deleterious effect on the national economy. It is further submitted that the Settlement Commission is  a forum of legal criterion and the powers are drawn from the  enacted statutes such as Customs Act, 1962 and Central  Excise Act, 1944 in the case of eligible persons, who in  addition to fulfilling the other criteria admit additional duty  liability of a minimum of Rs. 2 lacs, the option of knocking the  doors of Settlement Commission is available, inter alia, in the  cases under the Customs Act.  According to the learned  counsel, the functional mechanism of the Settlement  Commission pertaining to the customs cases can be broadly  described as follows:- On receiving an application, the statutory report is called  for by the Settlement Commission from the jurisdictional

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Commissioner. The Commission considers the report and after  hearing both the sides decides on the admissibility of the case.  Again after hearing both the sides, the Settlement  Commission, after being satisfied that a true and full  disclosure has been made by the applicant, determines the  duty liability, redemption fine in lieu of confiscation and the  penalty on the persons. Further, the question of extending  immunity from prosecution under the Customs Act, 1962,  Indian Penal Code and any other Central Acts is also decided  by the Commission. The Commission has got power to reject  any application. Further the decisions of the Settlement are  not appealable in the regular course. Above all, once the  Commission admits a case, it is vested with the exclusive  powers of all the Customs authorities till the finalization of the  case.         In this regard it is apt to extract Sections 127B to 127J of  the Customs Act, 1962 which are as under: -  "127B. Application for settlement of cases. - (1) Any  importer, exporter or any other person (hereinafter in this  Chapter referred to as the applicant)  may, at any stage of a  case relating to him make an application in such form and in  such manner as may be specified by rules, and containing a  full and true disclosure of his duty liability which has not  been disclosed before the proper officer, the manner in which  such liability has been incurred, the additional amount of  customs duty accepted to be payable by him and such other  particulars as may be specified by rules including the  particulars of such dutiable goods in respect of which he  admits short levy on account of misclassification or  otherwise of goods, to the Settlement Commission to have  the case settled and such application shall be disposed of in  the manner hereinafter provided :  

Provided that no such application shall be made unless -  

(a) the applicant has filed a bill of entry, or a shipping bill, in  respect of import or export of goods, as the case may be, and  in relation to such bill of entry or shipping bill or a show  cause notice has been issued to him by the proper officer;

(b) the additional amount of duty accepted by the applicant  in his application exceeds two lakh rupees :

Provided further that no application shall be entertained by  the Settlement Commission under this sub-section in cases  which are pending in the Appellate Tribunal or any Court:  

Provided also that no application under this sub-section  shall be made in relation to goods to which section 123  applies or to goods in relation to which any offence under the  Narcotic Drugs and Psychotropic Substances Act, 1985 (61  of 1985) has been committed:  

Provided also that no application under this sub-section  shall be made for the interpretation of the classification of  the goods under the Customs Tariff Act, 1975 (51 of 1975).  

(2) Where any dutiable goods, books of account, other  documents or any sale proceeds of the goods have been  seized under section 110, the applicant shall not be entitled  to make an application under sub-section (1) before the  expiry of one hundred and eighty days from the date of the  seizure.  

(3) Every application made under sub-section (1) shall be

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accompanied by such fees as may be specified by rules.  

(4) An application made under sub-section (1) shall not be  allowed to be withdrawn by the applicant.  

127C. Procedure on receipt of application under section  127B. - (1) On receipt of an application under section 127B,  the Settlement Commission shall call for a report from the  Commissioner of Customs having jurisdiction and on the  basis of the materials contained in such report and having  regard to the nature and circumstances of the case or the  complexity of the investigation involved therein, the  Settlement Commission may, by order, allow the application  to be proceeded with or reject the application :  

Provided that an application shall not be rejected under this  sub-section, unless an opportunity has been given to the  applicant of being heard :  

Provided further that the Commissioner of Customs shall  furnish such report within a period of one month of the  receipt of the communication from the Settlement  Commission, failing which it shall be presumed that the  Commissioner of Customs has no objection to such  application; but he may raise objections at the time of  hearing fixed by the Settlement Commission for admission of  the application and the date of such hearing shall be  communicated by the Settlement Commission to the  applicant and the Commissioner of Customs within a period  not exceeding two months from the date of receipt of such  application, unless the presiding officer of the Bench extends  the said period of two months, after recording the reasons in  writing.  

(2) A copy of every order under sub-section (1) shall be sent  to the applicant and to the Commissioner of Customs having  jurisdiction.  

(3) Subject to the provisions of sub-section (4), the applicant  shall, within thirty days of the receipt of a copy of the order  under sub-section (1) allowing the application to be  proceeded with, pay the amount of additional duty admitted  by him as payable and shall furnish proof of such payment  to the Settlement Commission.  (4) If the Settlement Commission is satisfied, on an  application made under sub-section (1) that the applicant is  unable for good and sufficient reasons to pay the amount  referred to in sub-section (3), within the time specified in  that sub-section, it may extend the time for payment of the  amount which remains unpaid or allow payment thereof by  instalments, if the applicant furnishes adequate security for  the payment thereof.  

(5) Where the additional amount of customs duty referred to  in sub-section (3) is not paid by the applicant within the time  specified or extended period, as the case may be, the  Settlement Commission may direct that the amount which  remains unpaid, together with simple interest at the rate of  eighteen per cent. per annum or at the rate notified by the  Board from time to time on the amount remaining unpaid,  be recovered as the sum due to the Central Government by  the proper officer having jurisdiction over the applicant in  accordance with the provisions of section 142.  

(6) Where an application is allowed to be proceeded with

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under sub-section (1), the Settlement Commission may call  for the relevant records from the Commissioner of Customs  having jurisdiction and after examination of such records, if  the Settlement Commission is of the opinion that any further  enquiry or investigation in the matter is necessary, it may  direct the Commissioner (Investigation) to make or cause to  be made such further enquiry or investigation and furnish a  report on the matters covered by the application and any  other matter relating to the case.  

(7) After examination of the records and the report of the  Commissioner of Customs received under sub-section (1),  and the report, if any, of the Commissioner (Investigation) of  the Settlement Commissioner under sub-section (6), and  after giving an opportunity to the applicant and to the  Commissioner of Customs having jurisdiction to be heard,  either in person or through a representative duly authorised  in this behalf, and after examining such further evidence as  may be placed before it or obtained by it, the Settlement  Commission may, in accordance with the provisions of this  Act, pass such order as it thinks fit on the matters covered  by the application and any other matter relating to the case  not covered by the application, but referred to in the report  of the Commissioner of Customs or the Commissioner  (Investigation) under sub-section (1) or sub-section (6).  (8) Subject to the provisions of section 32A of the Central  Excise Act, 1944 (1 of 1944), the materials brought on record  before the Settlement Commission shall be considered by the  Members of the concerned Bench before passing any order  under sub-section (7) and, in relation to the passing of such  order the provisions of section 32D of the Central Excise Act,  1944 shall apply.  

(9) Every order passed under sub-section (7) shall provide for  the terms of settlement including any demand by way of  duty, penalty or interest, the manner in which any sum due  under the settlement shall be paid and all other matters to  make the settlement effective and shall also provide that the  settlement shall be void if it is subsequently found by the  Settlement Commission that it has been obtained by fraud,  or misrepresentation of facts.  

(10) Where any duty payable in pursuance of an order under  sub-section (7) is not paid by the applicant within thirty days  of the receipt of a copy of the order by him, then, whether or  not the Settlement Commission has extended the time for  payment of such duty or has allowed payment thereof by  instalments, the applicant shall be liable to pay simple  interest at the rate of eighteen per cent. per annum or at  such other rate as notified by the Board on the amount  remaining unpaid from the date of expiry of the period of  thirty days aforesaid.  

(11) Where a settlement becomes void as provided under  sub-section (9) the proceedings with respect to the matters  covered by the settlement shall be deemed to have been  revived from the stage at which the application was allowed  to be proceeded with by the Settlement Commission and  proper officer may, notwithstanding anything contained in  any other provision of this Act, complete such proceedings at  any time before the expiry of two years from the date of the  receipt of communication that the settlement became void.  

127D. Power of Settlement Commission to order  provisional attachment to protect revenue. - (1) Where,

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during the pendency of any proceeding before it, the  Settlement Commission is of the opinion that for the purpose  of protecting the interests of the revenue it is necessary so to  do, it may, by order, attach provisionally any property  belonging to the applicant in such manner as may be  specified by rules.  (2) Every provisional attachment made by the Settlement  Commission under sub-section (1) shall cease to have effect  from the date the sums due to the Central Government for  which such attachment is made are discharged by the  applicant and evidence to that effect is submitted to the  Settlement Commission.  

127E. Power of Settlement Commission to reopen  completed proceedings. - If the Settlement Commission is  of the opinion (the reasons for such opinion to be recorded  by it in writing) that, for the proper disposal of the case  pending before it, it is necessary or expedient to reopen any  proceeding connected with the case but which has been  completed under this Act before application for settlement  under section 127B was made, it may, with the concurrence  of the applicant, reopen such proceeding and pass such  order thereon as it thinks fit, as if the case in relation to  which the application for settlement had been made by the  applicant under that section covered such proceeding also :  

Provided that no proceeding shall be reopened by the  Settlement Commission under this section after the expiry of  five years from the date of application under sub-section (1)  of section 127B.  

127F. Power and procedure of Settlement Commission. -  (1) In addition to the powers conferred on the Settlement  Commission under Chapter V of the Central Excise Act,  1944 (1 of 1944), it shall have all the powers which are  vested in an officer of the customs under this Act or the  rules made thereunder.  

(2) Where an application made under section 127B has been  allowed to be proceeded with under section 127C, the  Settlement Commission shall, until an order is passed under  sub-section (7) of section 127C, have, subject to the  provisions of sub-section (6) of that section, exclusive  jurisdiction to exercise the powers and perform the functions  of any officer of customs or Central Excise Officer as the case  may be, under this Act or in the Central Excise Act, 1944 (1  of 1944), as the case may be, in relation to the case.  

(3) In the absence of any express direction by the Settlement  Commission to the contrary, nothing in this Chapter shall  affect the operation of the provisions of this Act in so far as  they relate to any matter other than those before the  Settlement Commission.  

(4) The Settlement Commission shall, subject to the  provisions of Chapter V of the Central Excise Act, 1944 (1 of  1944) and this Chapter, have power to regulate its own  procedure and the procedure of Benches thereof in all  matters arising out of the exercise of its powers, or of the  discharge of its functions, including the places at which the  Benches shall hold their sittings.  

127G. Inspection, etc., of reports. - No person shall be  entitled to inspect, or obtain copies of, any report made by  any officer of the Customs to the Settlement Commission;

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but the Settlement Commission may, in its discretion,  furnish copies thereof to any such person on an application  made to it in this behalf and on payment of such fee as may  be specified by rules :  

Provided that, for the purpose of enabling any person whose  case is under consideration to rebut any evidence brought  on record against him in any such report, the Settlement  Commission shall, on an application made in this behalf,  and on payment by such person of such fee as may be  specified by rules, furnish him with a certified copy of any  such report or part thereof relevant for the purpose.  

127H. Power of Settlement Commission to grant  immunity from prosecution and penalty. - (1) The  Settlement Commission may, if it is satisfied that any person  who made the application for settlement under section 127B   has co-operated with the Settlement Commission in the  proceedings before it and has made a full and true disclosure  of his duty liability, grant to such person, subject to such  conditions as it may think fit to impose, immunity from  prosecution for any offence under this Act or under the  Indian Penal Code (45 of 1860) or under any other Central  Act for the time being in force and also either wholly or in  part from the imposition of any penalty, fine and interest  under this Act, with respect to the case covered by the  settlement:  

Provided that no such immunity shall be granted by the  Settlement Commission in cases where the proceedings for  the prosecution for any such offence have been instituted  before the date of receipt of the application under section  127B.  

(2) An immunity granted to a person under sub-section (1)  shall stand withdrawn if such person fails to pay any sum  specified in the order of the settlement passed under sub- section (7) of section 127C within the time specified in such  order or within such further time as may be allowed by the  Settlement Commission, or fails to comply with any other  condition subject to which the immunity was granted and  thereupon the provisions of this Act shall apply as if such  immunity had not been granted.  

(3) An immunity granted to a person under sub-section (1)  may, at any time, be withdrawn by the Settlement  Commission, if it is satisfied that such person had, in the  course of the settlement proceedings, concealed any  particulars, material to the settlement or had given false  evidence, and thereupon such person may be tried for the  offence with respect to which the immunity was granted or  for any other offence of which he appears to have been guilty  in connection with the settlement and shall also become  liable to the imposition of any penalty under this Act to  which such person would have been liable, had no such  immunity been granted.  

127-I. Power of Settlement Commission to send a case  back to the proper officer. - (1) The Settlement Commission  may, if it is of opinion that any person who made an  application for settlement under section 127B has not  cooperated with the Settlement Commission in the  proceedings before it, send the case back to the proper  officer who shall thereupon dispose of the case in accordance  with the provisions of this Act as if no application under

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section 127B had been made.  

(2) For the purpose of sub-section (1), the proper officer shall  be entitled to use all the materials and other information  produced by the assessee before the Settlement Commission  or the results of the inquiry held or evidence recorded by the  Settlement Commission in the course of the proceedings  before it as if such materials, information, inquiry and  evidence had been produced before such proper officer or  held or recorded by him in the course of the proceedings  before him.  

(3) For the purposes of the time limit under section 28 and  for the purposes of interest under section 28AA, in a case  referred to in sub-section (1), the period commencing on and  from the date of the application to the Settlement  Commission under section 127B and ending with the date of  receipt by the officer of customs of the order of the  Settlement Commission sending the case back to the officer  of customs shall be excluded.  

127 J. Order of settlement to be conclusive. - Every order  of settlement passed under sub-section (7) of section 127C  shall be conclusive as to the matters stated therein and no  matter covered by such order shall, save as otherwise  provided in this Chapter, be reopened in any proceeding  under this Act or under any other law for the time being in  force."

Learned counsel for the petitioner further submits that  the Settlement Commission vide final order dated 07.03.2006  has allowed the settlement application and granted complete  immunity to the petitioner as well as his brother from penalty  and prosecution.  In these circumstances, the detention of the  petitioner in pursuance to the impugned order of detention  would result in blatant infringement of Article 21 of the  Constitution of India as the order has been rendered totally  non est in the eyes of law.  It is further submitted that in view  of the acceptance of the settlement Application by the  Settlement Commission, all matters stand concluded and  settled. In these circumstances, the execution of the detention  order is wholly uncalled for, unwarranted and absolutely  illegal, being based on wrong reasons and the execution would  be apparently mala fide. The very constitution of the  Settlement Commission and insertion of the provisions  relating to the settlement of the cases under the Act is to  achieve the twin objective of collection of evaded revenue as  well as the prevention of further evasion through similar  practices. Necessarily implying thereby that by making true  and full disclosure of his liabilities and settling them, the  prejudicial activities of the evader are put to an end. Therefore,  the detention order on the same accusations that have been  considered by the Settlement Commission would be rendered  otiose and not worthy of execution.  Learned counsel would further submit that a perusal of  section127H would clearly reveal that the Settlement  Commission has to arrive at a complete satisfaction that the  Applicant before it has made a full and true disclosure of his  duty liability and while granting the immunity from  prosecution/penalty, the Commission is competent to impose  "such conditions as it may think fit". It is therefore crystal  clear that while allowing the settlement of the case, the  Settlement Commission has comprehensively looked into the  aspect of sealing the opportunity of any further indulgence of  the Applicants in any such activity of evasion of duty.

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Section 127J of the Customs Act, 1962, categorically  stipulates that any matter that has been settled by the  Commission would be conclusive and the same cannot be re- opened in any proceeding under the Customs Act, 1962, or  "under nay other law for the time being in force". Viewed in  this perspective, the detention of the petitioner on the same  grounds that have been considered by the settlement  Commission would tantamount to a gross abuse of the process  of law. Learned counsel further submits that the deterrent effect  inflicted by the settlement Commission is more effective and is  foolproof than the method of preventive detention. Law has to  select the method, which is objective, transparent and effective  in preference over the method, which is subjective,  unaccountable and ineffective. Learned counsel further invited our attention to the law  that has been enunciated by this Court in R.K. Garg vs.  Union of India, (1981) 4 SCC 675 which read as under:  "The Court must always remember that "legislation is  directed to practical problems, that the economic mechanism  is highly sensitive and complex, that many problems are  singular and contingent, that laws are not abstract  propositions and do not relate to abstract units and are not  to be measured by abstract symmetry"\005. \005\005\005\005Every  legislation particularly in economic matters is essentially  empiric and it is based on experimentation or what one may  call trial and error method and therefore it cannot provide for  all possible situations or anticipate all possible abuses.  There, may be crudities and inequities in complicated  experimental economic legislation but on that account alone  it cannot be struck down as invalid. \005\005\005\005\005\005There may  even be possibilities of abuse, but that too cannot of itself be  a ground for invalidating the legislation, because it is not  possible for any legislature to anticipate as if by some divine  prescience, distortions and abuses of its legislation which  may be made by those subject to its provisions and to  provide against such distortions and abuses\005."

According to the petitioner’s counsel, the case of the  petitioner squarely falls with the said exceptions and thus the  impugned detention order deserves to be set aside.  He would  also further submit that the case of the petitioner is squarely  covered by the ratio laid down by this Court in Additional  Secretary to Government of India & Ors. vs. Smt. Alka  Subhash Gadia & anr., 1992 SCC Supp. (1) 496 wherein this  Court, inter alia, has held as under: - "\005.Thirdly, and this is more important, it is not correct to  say that the courts have no power to entertain grievances  against any detention order prior to its execution. The courts  have the necessary power and they have used it in proper  cases as has been pointed out above, although such cases  have been few and the grounds on which the courts have  interfered with them at the pre-execution stage are  necessarily very limited in scope and number, viz., where the  courts are prima facie satisfied (i) that the impugned order is  not passed under the Act under which it is purported to have  been passed, (ii) that it is sought to be executed against a  wrong person, (iii) that it is passed for a wrong purpose, (iv)  that it is passed on vague, extraneous and irrelevant  grounds or (v) that the authority which passed it had no  authority to do so\005"

This Court has further analysed and discussed the ratio  laid down in Alka Subhash Gadia (supra) in the matter of  Subhash Muljimal Gandhi vs. L.Himingliana and Anr.

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reported in 1994 (6) SCC 14 wherein this Court has held as  under:- "11. \005 \005 Bound as we are by the above judgments, we must  hold that the other contingencies, if any, must be of the  same species as of the five contingencies referred to  therein\005"  

Learned counsel submitted that the law has to adopt a  progressive approach and when an order of detention has been  rendered infructuous by the supervening circumstances, as in  the present case, permitting the execution of the same would  be a draconian measure unacceptable to the settled tenets of  justice, law and equity.   Learned counsel cited the case of Pawan Bhartiya vs.  Union of India, reported in 2003 (11) SCC 479 wherein this  Court has held as under:  "4\005 the custom duty which was required to be paid was  paid by them before the execution of the detention orders.  Despite this fact the detention order passed against the  appellant was not revoked even though he has also paid the  custom duty as demanded\005

"5\005the fact of payment of duty in the cases detected against  these persons may act as a deterrent against their chance of  indulging in similar prejudicial activities in future since this  may adversely affect their financial backbone\005"  

Learned counsel submitted that the ratio of the aforesaid  case wherein the detention order was quashed at the pre- detention stage especially taking into account the need for  execution of the order in view of payment of duties etc. is also  applicable to the facts of the present case and in fact the  petitioner is placed in a much better situation as his case has  also been settled by the statutory process and has been  granted complete immunities owing to true and full disclosure  and full cooperation in the settlement proceedings.  It is  further submitted that the factum of settlement of the matter  as well as the consequent grant of immunities had duly been  conveyed to the detaining authority i.e. respondent No.2 by the  Settlement Commission.  The Detaining Authority was,  therefore, bound to consider the desirability and need for  execution of the impugned detention order in view of the  dramatically changed scenario.  According to the learned  counsel, after the settlement of the case, the entire controversy  stands buried and settled warranting forthwith termination of  the impugned detention order.  Arguing further, he submitted  that a citizen’s right of personal liberty under Article 21 of the  Constitution cannot be deprived of by the arbitrary decision of  the statutory authority and, therefore, the order of detention  so made is always subject to judicial scrutiny and review on  the touchstone of relevance and reasonableness, fair play,  natural justice, equality and non-discrimination.     Considering the entire factual matrix in juxta position with the  legal issues involved, the only inference according to the  petitioner’s counsel that can be legitimately drawn is that the  execution of such null and void detention orders would only be  punitive and not preventive in any manner whatsoever.   Learned counsel for the petitioner already invited our attention  to the case of Alka Gadia (supra) to the effect that the writ  petition at pre-execution stage is fully maintainable.  The  relevant observation of the extract of this Court is as under:-         "Thirdly, in the rare cases where the detenu, before being  served with them, learns of the detention order and the  grounds on which it is made, and satisfies the Court of their  existence by proper affirmation, the Court does not decline to

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entertain the writ petition even at the pre-execution stage, of  course, on the very limited grounds stated above."

It is, therefore, prayed that the detention order be  quashed and set aside and directing the respondents to set the  petitioner at liberty forthwith.  Mr. Ravindra Keshavrao Adsure, learned counsel for the  second respondent submitted that the Detaining Authority has  exercised their powers conferred by Section 3(1) of COFEPOSA  Act and has issued detention order dated 12.01.2005.  It is  submitted that the detention order was passed after carefully  considering the entire documents of the proposal sent by the  sponsoring authority and after being subjectively satisfied that  it is essential for preventing the detenu from indulging in  prejudicial activities in future and accordingly the order of  detention against the petitioner as well as his brother was  passed.  Learned counsel also invited our attention to the  judgment of this Court in Naresh Kumar Goyal vs. Union of  India reported in 2005 (8) SCC 276 wherein this Court has  observed that Courts have power to entertain grievances  against any detention order prior to its execution only in  proper cases and the grounds on which the courts interfere  the detention order at the pre-execution stage are necessarily  very limited and in scope and number.   Therefore, when the courts are prima facie satisfied (i)  that the impugned order is not passed under the Act under  which it is purported to have been passed (ii) that it is sought  to be executed against a wrong person, (iii) that it is passed for  a wrong purpose, (iv) that it is passed on vague, extraneous  and irrelevant grounds, or (v) that the authority which passed  it had no authority to do so. Therefore, the impugned order  does not suffer from any infirmity as stated above and  accordingly, the present writ petition at pre-execution stage of  detention order is not maintainable. Hence, the present writ  petition is required to be dismissed. Learned counsel for the respondent further submitted  that the admittance of the case and imposition/condonation of  fine and/or penalty is the prerogative of the Settlement  Commission and application praying immunity from fine,  penalty and prosecution matters pertain to the jurisdiction of  Settlement Commission. But, revocation of the detention order  issued in respect of the detenue is different issue and not  governed by provisions of section 127F (2) of the Customs Act.  It was submitted that in a representation made before  Settlement Commission in Shri Vipul Gor vs. Sonam  Enterprises, the Settlement Commission in its order dated  15.12.2005 rejected the plea of the applicant therein, for  making suitable recommendations to the Detaining Authority  for revocation of his detention order. In the present case the  petitioner relied upon the case of Hiralal Harilal Bhagvati vs.  C.B.I (supra). The said relied upon case was a case of duty  evasion and the appellant therein was booked by Customs  Department and thereafter, custom duty was paid under Kar  Vivad Samadhan Scheme (K.V.S.S) and further in the criminal  proceedings under Section 120B and 420 of I.P.C initiated by  C.B.I was quashed by this Court. The above cited case is  different from the present case, as in the case in hand, the  detention order was issued under COFEPOSA Act against the  petitioner with objective to prevent the nefarious activities in  future.  Therefore the immunity is granted by Settlement  Commission from fine, penalty and prosecution under the  provisions of Customs Act, 1962 and I.P.C have no bearing on  the order issued by the Detaining Authority which is very  much legal and the same needs to be upheld. We have carefully considered the rival submissions with

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reference to the entire pleadings and the provisions of Section  127B-127J of the Customs Act and the provisions of the  COFEPOSA Act.  We have also perused the annexures and records filed  along with the writ petition.  In our opinion, the argument  advanced by learned counsel for the respondent merit  acceptance.  As rightly pointed out by learned counsel for the  respondent that the admittance of the case and  imposition/condonation of fine or penalty is the prerogative of  the Settlement Commission and application praying immunity  from fine/penalty and prosecution are matters pertains to the  jurisdiction of the Settlement Commission but the revocation  of the detention order issued in respect of the detenu is  different issue and not governed by the provisions of Section  127F(2) of the Customs Act.  At the time of hearing, learned counsel for the petitioner  relied upon the case of Hiralal Harilal Bhagwati vs. C.B.I  (supra).  According to learned counsel for the respondent the  said relied upon case was a case of duty evasion and appellant  therein was booked by customs authority and therefore,  customs duty was paid under KVSS and further in the  criminal proceedings under Section 120B and 420 IPC  initiated by CBI was quashed by this Court.  Therefore, it is  admitted that the above cited case is different from the present  case as in the case in hand the detention order was issued  under the COFEPOSA Act against the petitioner with objective  to prevent to the nefarious activities in future.  Therefore, the  immunity granted by the Settlement Commission from fine,  penalty and prosecution under the provisions of the Customs  Act and IPC have no bearing on the order of detention passed  under the COFEPOSA Act.  Therefore, it is contended that the  detention order issued by the Detaining Authority is very  much legal and the same needs to be upheld.  The Settlement Commission was constituted with the aim  and objective of settling the tax evasion issues and by virtue of  disclosure by tax offender; they gain immunity from  fine/penalty which is otherwise mandatory under the  provisions of tax laws. But, such opportunity is only extended  to one tax offender but not available to habitual smugglers.  For the persons involved in smuggling activities, other than  the provisions made for the prosecution under the Customs  Act, 1962, an equal deterrent is emphasized under the  provisions of the COFEPOSA Act, 1974 i.e. provisions for  preventive detention. Such preventive detention prohibits  smugglers from indulging in further smuggling activities. In  the present case the investigation reveals the consistent  involvement of the petitioner \026detenue and his brother  Kamlesh Navinchandra Shah in smuggling activities,  therefore, the Detaining Authority on the basis of evidence  placed before him felt it necessary to issue the detention  orders in respect of both the detenues in order to prevent them  from pre-judicial activities in future. Accordingly the impugned  order is justifiable in the eyes of law and present Writ Petition  deserves to be dismissed.  It is submitted that the orders of detention under  COFEPOSA Act was issued in respect of the petitioner and his  brother vide orders dated 12.1.2005 and 31.1.2005  respectively whereas they had made an application before the  settlement Commission under section 127B of the Customs  Act, 1962 on 19.4.2005. At the time of issue of the said  Detention Orders, the Detaining Authority was not aware of  the detentues’ intention of approaching the Settlement  Commission. The immunity from prosecution was granted to  the petitioner and his brother by virtue of final order dated  8.3.2006 of Settlement Commission. Since the Settlement

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Commission is an authority to settle the duty liability with the  discretion to grant immunity in respect of fine, penalty and  prosecution, it cannot be construed that anybody approaching  the Settlement Commission, ceases to take up Settlement  Commission and the detention order under COFEPOSA Act  both are distinctly different and objectives of both the orders  are also different. Therefore, it is wrongly construed by the  petitioner that once the Settlement Commission has granted  unconditional immunities, the present detention order is  contrary to the settled position of law. Nowhere it is stated in the provisions of Section 127H of  the Customs Act, 1962 and in the order of the Settlement  Commission dated 08.03.2006 that the opportunity of further  indulgence in smuggling activities is sealed or plugged.  In our  view, the Settlement Commissioner’s order only dealt with true  and full disclosure of the disputed duty and acceptance of the  entire duty, liability by the petitioner and his brother.   Nowhere it is mentioned in the Settlement Commission’s order  that the petitioner would not indulge in smuggling of goods in  future.  Therefore, in order to prevent the detenu from  indulging in smuggling activities, the said detention order was  passed and there is no illegality in the detention order.  In the  instant case, the customs duty of Rs.1.4 crores was sought to  be evaded by the petitioner and his brother was accepted in  full by them.  This acceptance of entire duty demanded in the  impugned show cause notice was interpreted as full and true  disclosure by the Settlement Commission and as such the  petitioner and the co-applicants were directed to pay the said  amount of duty during the Settlement Commission  proceedings.  The said customs duty of Rs.1.4 crores was  expected to be paid by the petitioner and others at the time of  import of the impugned consignments during September,  2004.  However, the said amount of evaded customs duty was  ordered to be paid in the month of March, 2006 by the  Settlement Commission.  The Settlement Commission, while  extending the benefits as envisaged in the true spirit of  settlement, have granted immunity from fine, penalty and  prosecution under the Customs Act, 1962 and IPC.  The final  order of the Settlement Commission has, by no means,  undermined the surroundings of the offence committed by the  petitioner and his brother.  In the admission order  No.36/Customs/2005 of the Settlement Commission dated  03.01.2006, the Commission also distinctly demarcated the  area of jurisdiction of the Settlement Commission and the  matter of COFEPOSA.  The Settlement Commission adhered  strictly to the aspect of levy of customs duty and on the basis  of the full and true disclosure by the petitioner and others, in  that respect, settled the case by directing full payment of  customs duty and having done so, extended the benefit of  immunity from fine, penalty and prosecution.  Thus the matters of Settlement Commission and the  COFEPOSA are altogether different issues, the orders of the  respective authorities should not and cannot be binding or  influencing each other.  As such the outcome of the Settlement  Commission order should not have any bearing on the  detention order.  Concluding his argument, learned counsel  for the respondent submitted that the preventive detention  under COFEPOSA is distinctly different from the prosecution  under the Customs Act, 1962 and IPC, the sanctity of the  detention order issued by the second respondent as the  Detaining Authority, should be upheld and the same should  be ordered to be served upon the petitioner in the interest of  justice.  Though the matter was argued by learned counsel for the  respondent on merits, learned counsel for the respondent at

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the time of hearing in fairness placed before us the reported  opinion dated 05.06.2006 of the Advisory Board constituted  under the COFEPOSA Act, 1974 in respect of the detenu  Kamlesh Navinchandra Shah, the brother of the petitioner.  Para 6 of the order dated 04.05.2006 of the Advisory  Board constituted under Section 8(a) of the Act 52 of 74 by the  Government of Maharashtra was placed before us.  We have  perused the said order.  In para 6, the Advisory Board has  observed as under:  "\005After the final order passed by the Settlement Commission of  Customs and Central Excise, the detention order has been  executed.  The detenue and his brother had extended full co- operation and full customs duty as demanded by the Revenue  has been paid and the case finally settled. The Commission had  given unconditional immunity from prosecution as well as  penalty. A copy of the order has been forwarded by the  Commission to the Detaining Authority and yet the detention  order was executed on his brother i.e. detenue Kamlesh Shah.  He further stated that he challenged the order of his detention  at pre-execution stage in the Supreme Court and Supreme  Court has given Interim stay of the operation of impugned  order."

It is thus seen that the Settlement Commission has, in  its order, under the head ’penalty’ and ’prosecution’ granted  immunity from penalty and prosecution to the co-applicant  and in these circumstances the Advisory Board was of the  opinion that there was no sufficient cause for the continued  detention.  Learned counsel for the respondent has also placed  before us the opinion of the Advisory Board which reads thus: "The Advisory Board is of the opinion that there is no  sufficient cause for the detention of abovenamed detenue  under section 3(1) of COFEPOSA Act, 1974.

The consequential communication dated 05.06.2006 and  the order dated 05.06.2006 were also placed before us which  read thus:- "The Advisory Board has reported that there is no sufficient  cause for the detention of Shri Kamlesh Navinchandra Shah.  The government has accordingly revoked the detention order  issued against him. The revocation order (in triplicate) is  enclosed herewith. One copy of revocation order should be  served on the detenue concerned and the duplicate copy of  the same alongwith signature of the detenue with date  should be returned immediately to the undersigned. Third  copy should be retained for your record."

"ORDER Whereas, an order No. PSA-1204/21(1)/SPL-3(A), dated the  31st January 2005, has been passed by the Principal  Secretary (Appeals and Security) to the Government of  Maharashtra, home Department and Detaining Authority  under section 3(1) of the Conservation of Foreign Exchange  and Prevention of Smuggling Activities Act, 1974 (52 of 1974)  for the detention of Shri Kamlesh Navinchandra Shah,  

Whereas, the case of Shri Kamlesh Navinchandra Shah was  placed before the Advisory Board, which is of the opinion  that there is no sufficient cause for his detention; and  Whereas, the Government of Maharashtra has fully  considered the report of the Advisory Board and material on  record;  

Now, therefore, in exercise of the powers conferred by  Section 8(f) of the aforesaid Act, the Government of

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Maharashtra hereby revokes the aforesaid Detention Order  and further directs that said Shri Kamlesh Navinchandra  Shah be released forthwith on receipt of this order."

Another decision cited by learned counsel for the  petitioner in V.C.Mohan vs. Union of India reported in 2002  (3) SCC 451 and the observations made thereunder can also  be usefully applied to the facts of this case.   In the case of Pawan Bhartiya vs. Union of India and  Another, 2003 (11) SCC 479, the appellant challenged the  detention order dated 30.07.1996 passed under Section 3(1) of  the COFEPOSA Act, 1974 before the High Court of Delhi.  That  petition was rejected by the High Court by holding that it is  not a fit case where any interference is called for before the  execution of the order of detention.  At the time of hearing,  learned counsel for the appellant pointed out that similar  detention orders were passed against 6 persons during the  period from 07.12.1995 to 12.08.1996 and further pointed out  that 5 out of 6 detention orders were revoked by the competent  authority on the ground that the customs duty which was  required to be paid was paid by them before the execution of  the detention orders.  Despite this fact the detention order  passed against the appellant was not revoked even though he  has also paid the customs duty as demanded.  It has also been  pointed out that the sponsoring authority submitted its report  before the Detaining Authority to revoke the detention order  which was passed against the appellant.  The Joint Secretary  to the Government of India, Ministry of Finance has filed an  affidavit in this case wherein it is submitted that similar 5  detention orders were revoked.  This Court (M.B. Shah and  Brijesh Kumar, JJ) in para 6 & 7 observed as under:- "6. In our view, there is no reason to discriminate the  appellant and the reason given by the authority in not  revoking the detention order could hardly be justified.  It is  true that normally before the execution of the detention  order the same is not required to be quashed and set aside.   However, considering the peculiar facts and circumstances  of the case, in our view, no purpose will be served by  continuing the detention order.  It is pointed out that the  appellant has ceased his activities in the field of import or  export.  He has already paid the tax with penalty as  demanded by the authority.  There is nothing on record that  since the last five years the appellant has indulged in any  such activity.  It is to be noted that the purpose of passing  the detention order is to prevent the detenu from continuing  his prejudicial activity but not to punish him.  

7. Hence, in view of the facts and circumstances of the  present case, the impugned order dated 30-7-1996 passed  by the Joint Secretary to the Government of India under  Section 3(1) of COFEPOSA is quashed and set aside.  The  appeal is allowed accordingly."

The above judgment, in our view, squarely applies to the  facts and circumstances of the case on hand.  In the instant  case, the petitioner’s brother has already been released on the  ground there was no sufficient cause for the detention of the  detenu under Section 3(1) of the Act.  The Government also  accordingly revoked the detention order issued against him  and the Government of Maharashtra, after considering the  report of the Advisory Board and the material on record and in  exercise of the powers conferred by Section 8(f) of the  COFEPOSA Act revoked the aforesaid detention order and  further directed that Kamlesh Navinchandra Shah be released  forthwith on receipt of the said order dated 05.06.2006.  In

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our opinion, the petitioner before us who is also similarly  placed and who has also paid the customs duty etc. pursuant  to the order of the Settlement Commission and got the  unconditional immunity by the Settlement Commission is  entitled to the same treatment.  At the time of hearing, it is  pointed out that the petitioner has ceased his activities in the  field of import or export and has already paid the tax with  penalty as demanded by the authority and there is nothing on  record that the appellant has indulged in any such activity in  the recent past.  It is settled by law that the purpose of  passing the detention order is to prevent the detenu from  continuing his prejudicial activity but not to punish him.  Considering the peculiar facts and circumstances of the  case, no purpose will be served by continuing the detention  order and we, therefore, allow the writ petition and quash and  set aside the detention order bearing No. PSA  1204/21(2)/SPL-3(A) dated 12.01.2005.  The writ petition is ordered accordingly.