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2022 (11) TMI 1237 - AT - CustomsPenalty u/s 112 (a) of Customs Duty - Penalty on customs officers - Charge of Abatement - Smuggling - re-assessment of imported goods - exoneration of the charges of abetting in the clearance of the impugned goods - HELD THAT - Appellant 1 has been exonerated of the charge of abetting by the disciplinary authority. That being so, in my the impugned order which hold the appellant 1 guilty of abetting, for imposition of penalty under Section 112 (a) cannot stand. Reliance placed in the case of CC, AMRITSAR VERSUS SHRI PARMINDER JIT SINGH, INSPECTOR AND OTHERS 2013 (7) TMI 377 - CESTAT NEW DELHI where it was held that 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. Reliance placed in the case of SURAJ PRAKASH VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI 2015 (8) TMI 1282 - CESTAT NEW DELHI where it was held that there is an error which calls for exercise of jurisdiction of the Tribunal under Section 35C(2) for rectification. The adjudicating authority has imposed penalty on the said Inspector on the ground that he has failed to discharge his official duty properly. We are afraid that the said reasoning cannot be adopted for imposition of penalty in terms of Section 114 of the Act, inasmuch as there is nothing on record to show that there was any mens rea on the part of the said appellant so as to abet the illegal export - The Hon ble Supreme Court in the case of 1979 (3) TMI 205 - SUPREME COURT , has held that lapses or lack of efficiency would not ipso facto constitute a misconduct to attract the penal provisions. As such, in the absence of any evidence to suggest that the appellant had connived with the exporter, we are of the view that non-performance of the duty, by itself, would not call for any penal action on the said appellant. Accordingly, the penalty imposed upon him is set-aside. Positive evidence to that effect is required to be placed and charge of abetting needs to be proved in positive manner. The paragraphs of Show Cause Notice and the impugned order in para 4,2. And 4.3 have been reproduced and any such positive evidence or even the allegation whereby the charge abetting can be sustained, cannot be found - It is also worth noting that the entire case of misdeclaration is based on the forged documents produced for the clearance of impugned goods as have been recorded by the disciplinary authority in para 10.4 of his order by relying on para 16.1 (iv) of the show cause notice. In view of these facts charge of abetting cannot be sustained against the two officers who are appellant. These pronouncements should not be held to mean that officers are not guilty of dereliction of duties as assigned to them as officer of Customs, while allowing the clearance of imported goods. The charges of dereliction of duty cannot be adjudicated in terms of the provisions of Customs Act, 1962 and need to be considered as per CCS Rules. If appellants in the proceedings initiated under the said rules, are found guilty of dereliction of duties assigned in any manner, disciplinary authority is free to proceed against the said officers in manner prescribed, without referring to exoneration of these officers by this order by the charge of abetting for imposition of penalty under Section 112 (a) of the Customs Act, 1962. Appeal allowed.
Issues Involved:
1. Imposition of penalty under Section 112(a) of the Customs Act, 1962 on the appellants for aiding and abetting the clearance of misdeclared goods. 2. Examination of the role and actions of the appellants in the clearance of the goods. 3. Consideration of the exoneration of the appellants in departmental disciplinary proceedings. Issue-wise Detailed Analysis: 1. Imposition of Penalty: The Additional Director General (Adjudication) imposed a penalty of Rs. 2,00,000/- on each appellant under Section 112(a) of the Customs Act, 1962. The penalties were based on findings that the appellants had allegedly aided in the clearance of misdeclared goods, resulting in evasion of customs duty and rendering the goods liable for confiscation under Sections 111(d) and 111(m) of the Customs Act. 2. Role and Actions of the Appellants: The investigation by the Directorate of Revenue Intelligence (DRI) revealed that the appellants, in their respective capacities as Superintendent of Customs and Inspector of Customs, failed to properly verify and examine the imported goods. The investigation highlighted discrepancies in the declared and actual nature, quantity, and value of the goods. Specifically, the appellants were found to have granted 'out of charge' orders and examination reports without proper inspection, leading to the clearance of misdeclared goods. Appellant 1 (Superintendent of Customs): - The appellant admitted to granting 'out of charge' for the bills of entry in question. - The investigation found that the appellant did not verify the import documents against the Airway Bill (AWB) and failed to detect discrepancies. - The appellant's actions were deemed to have facilitated the clearance of undervalued goods without payment of appropriate customs duty. Appellant 2 (Inspector of Customs): - The appellant admitted to feeding examination reports into the system without physically examining the goods. - The investigation revealed that the appellant had cleared multiple bills of entry in a similar manner, leading to fraudulent imports. - The appellant's failure to properly examine the goods was considered a dereliction of duty, contributing to the improper clearance of goods. 3. Exoneration in Departmental Disciplinary Proceedings: Appellant 1 presented the order dated 18.04.2022, where the disciplinary authority exonerated him of the charge of "abetting" after considering the same set of evidence. The disciplinary authority concluded that there was no evidence of the appellant knowingly abetting the smuggling activities or colluding with the importers or other parties involved. The disciplinary authority's findings emphasized that the appellant relied on the examination report provided by the Inspector and did not have knowledge of the misdeclaration. Judgment: The judgment considered the exoneration of Appellant 1 in the departmental proceedings and various legal precedents. It was held that the imposition of penalties under Section 112(a) of the Customs Act could not be sustained in light of the exoneration in the disciplinary proceedings and the absence of positive evidence of abetment. The judgment referenced several cases, including Parminder Jit Singh, Suraj Prakash, B K Pabri, and Boria Ram, which supported the view that penalties under the Customs Act cannot be imposed when disciplinary proceedings on the same charges have resulted in exoneration. Conclusion: The appeals filed by the appellants were allowed, and the penalties imposed under Section 112(a) of the Customs Act were set aside. The judgment clarified that while the appellants may be guilty of dereliction of duty, such charges should be adjudicated under the CCS Rules and not under the Customs Act. The disciplinary authority was free to proceed against the officers for dereliction of duty without referring to the exoneration from the charge of "abetting" for the imposition of penalties under the Customs Act.
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