In a recent case, the Bombay High Court allowed anticipatory Bail in case of Rs 44 Cr of Customs Duty evasion involving undervalued walnut imports. The applicants have demonstrated their willingness to pursue the statutory remedy of compounding the alleged offence.
Dipakkumar Dharamsinhbhai Kakadiya, the applicant, apprehends arrest and coercive action in connection with allegations involving both compoundable and non-compoundable offences punishable under Sections 132 and 135 of the Customs Act, 1962. These apprehensions arise in the course of an ongoing investigation being conducted under File No.DRI/MZU/F/INT-32/Enq 17/2025/RA No.485 of 2025, by and/or at the instance of the respondent/ Directorate of Revenue Intelligence.
The investigation pertains to alleged acts of misdeclaration in the importation of goods, primarily walnuts, which are classified as freely importable items. These imports were mainly routed through the Nhava-Sheva Port. The DRI accuses the applicants of deliberately undervaluing the imported goods by submitting manipulated and fabricated invoices to evade customs duties. The transactions in question were carried out in the names of several entities: M/s Deepak Trading Company, M/s Angel Enterprises, M/s Deepak Kirana Stores, and M/s BV FEB.
Search and seizure operations were conducted in February 2025 in relation to the said allegations. It is submitted that applicant No.1 is the individual managing the affairs of the firms as mentioned above. Applicant No.2 is the nephew of applicant No.1, and applicant No.3 is the mother of applicant No.1.
Kakadiya Sneh Deepakbhai, son of applicant No.1, was arrested in connection with the present matter vide Remand Application No.485 of 2025. He has since been released on bail. The Remand Applications filed in the case alleged evasion of customs duty to approximately Rs. 44 Crores, and copies of the said applications have been annexed to the present application for reference.
The Directorate of Revenue Intelligence (DRI) have filed the detailed replies opposing the anticipatory bail application. The DRI has raised preliminary objections on the issue of maintainability and is contesting the application on merits. In support of its opposition, the DRI has also placed reliance on an ex-parte order dated 3 July 2025 issued by the compounding authority, wherein the compounding application filed by the applicants was rejected as being premature.
The primary allegation in the case pertains to large-scale undervaluation in the import of ‘Inshell Walnuts’. It is alleged that the modus operandi involved the submission of manipulated and fabricated invoices issued by Dubai-based entities to Indian Customs authorities, to suppress the true transaction value and thereby evade customs duties.
It is further alleged that Sneh Deepakbhai Kakadiya, in his capacity as an authorised representative of the Dubai-based entity, had personally signed the aforementioned manipulated invoices. Additionally, actual invoices issued by a Chile-based supplier were recovered from Sneh Deepakbhai Kakadiya’s email account, clearly indicating a significant discrepancy and deliberate under-invoicing. The estimated customs duty evaded in this manner is said to exceed Rs 44 Crores.
According to the respondent, similar practices are being adopted by multiple importers. The DRI also contended that applicant No.1 had previously sought and was granted time to appear in response to various summonses issued during the investigation. However, rather than complying with those summonses, the applicants have now chosen to approach the Court for anticipatory bail. It is further stated that the co-accused, Sneh Deepakbhai Kakadiya’s statements were recorded under CCTV surveillance, and the alleged retraction of such statements is argued to be an afterthought.
The respondent has also raised concerns regarding non-cooperation by the applicants, expressing apprehension that the applicants may abscond, tamper with evidence, or attempt to influence witnesses. It is submitted that, as a general rule, applications for anticipatory bail should first be made before the Court of competent Sessions Court.
The remand applications were filed before the Additional Chief Metropolitan Magistrate, Esplanade, Mumbai, even though no specific allegation of mis-declaration has been made in Mumbai. The customs declarations in question were primarily made at Nhava-Sheva, located in District Raigad, with some declarations made at Mundra Port in Gujarat. Under such circumstances, the applicants cannot be expected to jeoparadise their liberty by engaging in protracted arguments over territorial jurisdiction, specifically, whether the matter falls under the jurisdiction of the Sessions Court at Mumbai (where remand proceedings of co-accused are being conducted) or the Sessions Court at Panvel District-Raigad, where the alleged offence was committed. Given these peculiar and complex jurisdictional facts, the applicants have exercised their right to approach this Court, which has concurrent territorial jurisdiction over both District Raigad and District Mumbai.
Furthermore, the applicants have filed a joint compounding application dated 1 July 2025 under Section 137(3)of the Customs Act, 1962, as a one-time statutory remedy prior to the initiation of prosecution, with the intention of avoiding multiplicity of proceedings, evading the rigours of prolonged litigation, and safeguarding their liberty. Through this application, the applicants have expressed their willingness to cooperate fully with the compounding authority and to pay the compounding fee as may be determined, along with any customs duty, interest, and penalty found due in accordance with law.
It was also held therein that the alleged offence was bailable, bail was granted accordingly, and it was further directed that any interrogation of the applicant be conducted in the presence of his advocate, positioned at a visible but not audible distance, with the entire process being videographed.
The applicants have demonstrated their willingness to pursue the statutory remedy of compounding the alleged offence. In this context, they may be directed to cooperate with the investigation, subject to appropriate conditions to allay the concerns of the investigating authority.
A single bench of Justice R.N. Laddha considering the applicants’ willingness to comply with compounding provisions, the stage of the investigation, absence of prior criminal record, the documentary nature of the evidence, the willingness on the part of the applicants to jointly deposit a total amount of Rs.5 Crores with the respondent allowed the application subject to the conditions.
