2007 (9) TMI 368 - HC - Customs

Reward to informer - Reward of Rs. 35 lakhs sanctioned while Rs. 59.60 lakhs sought by petitioner. Petitioner entitled to reward as per policy contained in C.B.E.&C. Circular No. 13011/3/85-AD.V, dated 30.03.1985. reward to be paid if information leads to recovery of evaded custom duty/penalty. Reward paid in present case based on decision by competent authority and such decision not shown as arbitrary or illegal. Petitioner ought to placed materials before Single Judge based on which further sum of Rs. 24.60 lakhs claimed as reward. Court to consider decision making process and not decision itself in writ jurisdiction and single judge order on not entering into investigation in such proceedings, sustainable.

Summary

Issues:
Claim for reward money under Circular dated 30th March 1985.

Analysis:
The appellant filed a Writ petition seeking a Mandamus to rescind, cancel, or modify an order and grant a further amount as reward money. The single Judge dismissed the petition stating that reward is an ex-gratia payment and cannot be claimed as a matter of right. The Court cannot adjudicate disputes on the extent of information provided by the informer or the recovery of duty. The appellant appealed against this decision.

The appellant provided information leading to the recovery of goods imported without payment of customs duty. The appellant claimed 20% of the duty as reward under a Circular dated 30th March 1985. The Customs authorities realized a total duty, penalty, and fine of Rs. 2.98 crores, out of which the appellant claimed entitlement to Rs. 59.60 lakhs. However, the respondents stated that independent efforts by Customs authorities led to the recovery of a different amount, not related to the appellant's information. A Reward Committee settled the final reward at Rs. 30.00 lakhs, in addition to an advance payment of Rs. 5.00 lakhs.

The High Court analyzed the Circular dated 30th March 1985, which stipulates that informers are eligible for a reward up to 20% of the duty sought to be evaded, plus 20% of the fine and penalty imposed, provided it does not exceed 20% of the goods' market value. The Court held that the petitioner had been duly paid the reward determined by the Competent Authority. The Court found no evidence to show the decision was arbitrary or unreasonable. The Court emphasized that in a Writ proceeding, the Court only considers the decision-making process, not the decision itself. As the petitioner failed to provide material to support the claim for further payment, the Court dismissed the appeal.

In conclusion, the High Court upheld the decision of the single Judge, stating that the petitioner had been paid the reward as per the Circular dated 30th March 1985. The Court found no illegality or arbitrariness in the decision-making process of the Competent Authorities. The appeal was dismissed, and the parties were directed to comply with formalities for obtaining a copy of the order.