2009 (5) TMI 462 - AT - Customs

Penalty on custom officers- M/s. Jamba Exports had fraudulently obtained DEPB benefits amounting to Rs.4,62,889.00 by managing to get ante-dated Customs Examination Report dated 31-3-2000 on the Shipping Bill No. 2277 dated 31-3-2007, but the goods were received in warehouse on or after 1-4-2000. DEPB rates were reduced after 1-4-2000. It has been alleged that Shri D.R. Ahuja, Superintendent of Customs, appellant no. 1 herein and Shri M.P. Singh, Inspector had put their signatures on the export documents as 31-3-2000 but the examination was done on 4-4-2000. It has further been alleged that Shri Vijay Madan signed the exports documents authorised by Shri Qimiti Lal Sharma, CHA, appellant No. 2 herein. By the impugned order, the Commissioner imposed penalty of Rs.20,000/- each on both the appellants. He also imposed redemption fine and penalty on the exporter and others. Held that- it was a case of mere negligence without intention/collusion to give undue benefit to exporter. In that view no penalty was imposable on him under section 114 of Custom Act, 1962.

Summary

Issues:
Fraudulent DEPB benefits obtained, Allegations against Customs officers, Imposition of penalties, Authorization of signing export documents by CHA, Time limit for proceedings, Negligence of duty vs. fraudulent activities.

Analysis:
The judgment involves two appeals arising from a common order regarding fraudulent DEPB benefits obtained by a company. The company managed to get Customs Examination Report ante-dated to avail benefits. Allegations were made against Customs officers for signing documents with incorrect dates. Penalties were imposed on the officers and others involved.

Customs Officer's Appeal:
The first appellant argued that the Commissioner's observation of unlawful conduct was based on negligence, not fraudulent activities. Citing precedents, the appellant contended that penalties under Section 114 of the Customs Act were unjustified. The appellant highlighted the lack of evidence of connivance with the exporter, suggesting negligence rather than intentional wrongdoing.

CHA's Appeal:
The second appellant, a Customs House Agent (CHA), denied authorizing the person who signed the export documents. The appellant emphasized the necessity of one-time authorization for CHA activities. Lack of evidence regarding authorization was a key point in the appeal, supported by legal precedents where penalties were not imposed without concrete proof of involvement or authorization.

Commissioner's Findings:
The Commissioner's findings were challenged based on the lack of substantial evidence supporting the allegations. The appellants' denial of ante-dating documents and lack of connivance with the exporter were crucial in the decision. The Tribunal emphasized the need for concrete proof of involvement or authorization before imposing penalties under Section 114 of the Act.

Conclusion:
The Tribunal set aside the penalties imposed on both appellants, citing insufficient evidence to support the allegations. The decision highlighted the distinction between negligence of duty and fraudulent activities, emphasizing the requirement for concrete proof of involvement or authorization before penalizing individuals under Section 114 of the Customs Act. Both appeals were allowed with consequential reliefs, emphasizing the importance of evidence in such cases.