2013 (7) TMI 377 - AT - Customs

Penalty under Section 112 of the Customs Act - proceedings against the officers of the department - abetted in illicit clearance of goods under seizure without out of charge order - Held that - Disciplinary proceedings had been initiated against all these respondents under CCS (CCA) Rules on the charge of abetting the smuggling activities & on completion of the inquiry and on considering the inquiry of such report, the charges against all these respondents have been dropped by the department. Thus in view of this, when the disciplinary proceedings against the respondents under CCS (CCA) Rules have been dropped, the proceedings for imposition of penalty against them under Section 112 (a) of Customs Act, 1962 which are based on the same charges and the same evidence, would also not survive.

Summary

Issues involved:
1. Alleged illicit clearance of imported goods without payment of duty.
2. Imposition of penalty under Section 112 of the Customs Act, 1962 on customs officers.
3. Review of penalty proceedings by the Committee of Chief Commissioners.
4. Exoneration of customs officers by the Commissioner.
5. Cross objections filed by the respondents.

Detailed Analysis:

1. The case involved the alleged illicit clearance of imported goods from Pakistan without payment of duty at a land custom station. The goods were found to have been removed to Platform No. 3 without customs clearance, leading to their seizure. A show cause notice was issued initially for confiscation of the goods, later amended to include penalty proceedings against the customs officers for abetting in the illicit clearance of goods.

2. The Revenue contended that the customs officers were on duty when the goods were cleared without payment of duty and argued that the impugned order exonerating the officers was not legal. The Respondents argued that the penalty under Section 112 of the Customs Act could only be imposed if there was evidence of abetment in illicit clearance. They highlighted that disciplinary proceedings initiated against the officers were dropped by the department, indicating lack of merit in the appeals filed by the Revenue.

3. The Committee of Chief Commissioners reviewed the penalty proceedings initiated against the customs officers. It was observed that disciplinary proceedings under CCS (CCA) Rules had been dropped against all respondents charged with abetting smuggling activities. The charges against the officers were dropped by the department, leading to the conclusion that the penalty proceedings under Section 112 (a) of the Customs Act would not survive since they were based on the same charges and evidence.

4. The Tribunal found that since the disciplinary proceedings against the customs officers had been dropped, the penalty proceedings under Section 112 (a) of the Customs Act were not sustainable. Therefore, the impugned order exonerating the officers was upheld, and the Revenue's appeals were dismissed. The Cross Objections filed by the respondents were also disposed of accordingly.

This detailed analysis covers the issues, arguments presented by both sides, the review of penalty proceedings, and the final decision of the Tribunal regarding the alleged illicit clearance of imported goods and the imposition of penalty on customs officers.