2008 (12) TMI 468 - AT - Customs

Penalty on departmental officers - Abetment in fraud - Held that - Section 114 of the Act provides penalty for attempt to export goods improperly etc. In the present case, we do not find any material that the respondents rendered any act or omission for exportation of the goods improperly. Therefore, there is no reason to interfere with the order of the Commissioner - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against dropping penal provisions by Commissioner of Customs
- Allegation of fraudulent export of goods by an Export Oriented Unit
- Examination of goods by Central Excise Officers
- Dispute over examination reports and samples
- Imposition of penalties under Section 114 of the Customs Act

Analysis:
1. The appeal was filed by the Revenue against the dropping of penal provisions by the Commissioner of Customs in the case of fraudulent export activities by an Export Oriented Unit (EOU). The EOU, M/s. Mahavir Impex, was involved in exporting sub-standard textile goods under false pretenses. The Adjudicating authority had confiscated the goods and imposed penalties on the exporter and its proprietor, but no penalties were imposed on the Central Excise Officers who examined the goods at the factory.

2. The Revenue alleged that the Central Excise Officers, Shri G.S. Charpota and Shri Nathu Lal Meena, did not properly examine the goods during stuffing at the factory. The officers were accused of providing false examination reports which aided the exporter in committing fraudulent acts. The goods were found to be different from what was declared, leading to suspicions of abetment by the officers. The Revenue argued that the Commissioner erred in considering this negligence rather than intentional wrongdoing.

3. The respondents, represented by an Advocate, defended themselves by pointing out that they had examined a percentage of the goods as per the ARE-1s and had drawn samples without any disputes raised against the specific samples examined by them. They emphasized that the packets and samples they verified matched the declared goods, and there was no evidence implicating them in any fraudulent activities of the exporter.

4. After considering both sides and reviewing the records, the Tribunal found that the respondents had noted the packet numbers they verified and drew samples of the exported goods. There was no indication that the verified goods were different from the declared ones. The Tribunal observed that there was no material suggesting the respondents had attempted to export goods improperly, as required under Section 114 of the Customs Act. Therefore, the Tribunal rejected the Revenue's appeals and disposed of the cross-objections, upholding the Commissioner's decision not to impose penalties on the Central Excise Officers.