2020 (2) TMI 483 - HC - Customs

Illegal export - it is alleged that respondent (Inspector of customs) had connived with the exporters for helping them obtain certificate of export without actual export for fulfilling their export obligation as 100% EOU by issuance of export orders fraudulently - contravention of Rule 3(I)(II)(III) of the CCS Conduct Rules 1964 - HELD THAT - The enquiry officer completely failed to appreciate that in a departmental enquiry, rule of strict evidence does not apply and the evidence so collected is to be appreciated on the principle of preponderance of probabilities. When paper transaction with respect to transport of goods was established, it matters not if specific names did not crop-up as to with whom the respondent collaborated or connived. The disagreement note of the disciplinary authority clearly reveals that it took note of the evidence that there was no export of goods in case of M/s Suvidha Polyesters Pvt. Ltd. and that M/s Jai Mata Di Transport Company was a nonexistent and fake company. The evidence which was taken note of by the disciplinary authority was that there was no evidence of any physical verification of the goods except for endorsement in the crossing register and the signature of the crossing officer on the bills of export. The invoices mentioned in the bills of export were in different formats which were signed by different authorized representatives of the exporter within a short period of time. No evidence was found by the disciplinary authority to establish the local custom of using tyre carts to export goods. The disciplinary authority also found that the enquiry officer blindly accepted the contentions of the respondent and submitted a report which was not at all fair, proper and acceptable. The fact that the respondents at the relevant time was Inspector of Customs posted at Jogbani Land Custom Station, who were responsible for issuing export orders, it was incumbent upon them to have verified the contents of the commodities before issuing any such export order. The non-existent transportation firms whose services are stated to have been utilized for transporting goods and the other irregularities found during the course of investigation and enquiry do make out a case against the respondents and therefore, the punishment meted out to them by the disciplinary authority was absolutely justified and should not have been interfered with by the Tribunal. The order of the disciplinary authority is restored - Petition allowed.

Issues Involved:
1. Substitution of parties in writ petitions due to the death of the original respondent.
2. Legality of the penalty imposed on respondents by the disciplinary authority.
3. Validity of the Tribunal's order setting aside the penalty.
4. Evaluation of evidence in departmental proceedings.
5. Discrepancies in penalties imposed on different officials involved in similar allegations.

Detailed Analysis:

1. Substitution of Parties:
In C.W.J.C. No. 1957 of 2019, the original respondent, Late Prem Bahadur Lal, died during the pendency of the writ petition. By order dated 16.09.2019, his widow, Leela Devi, was allowed to be substituted in place of her late husband. For clarity and convenience, the reference to the respondent in the present order means the husband of Leela Devi, who was Inspector Customs and Central Excise, Land Custom Station, Jogbani during 2000-2001.

2. Legality of the Penalty Imposed:
The respondents in all three writ petitions were subjected to a penalty of a 50% cut in their pension for five years by order dated 08.07.2013. The writ petitioners, Union of India and officials of the Central Board of Indirect Taxes and Customs, challenged the Tribunal's order dated 05.05.2016, which set aside the Presidential Order imposing the penalty. The disciplinary authority did not accept the enquiry officer's report, which found no direct evidence of the respondents' connivance with exporters. Instead, the disciplinary authority issued a note of disagreement and imposed the penalty after considering all relevant materials.

3. Validity of the Tribunal's Order:
The Tribunal set aside the penalty on grounds that the disciplinary authority initially agreed with the enquiry report and that the punishment was based on the second stage advice. The Tribunal also noted that different penalties were imposed on other officials involved in similar allegations. However, the High Court found that the disciplinary authority's note of disagreement was an independent assessment and not merely a reiteration of the second stage advice. The High Court restored the disciplinary authority's order, finding the Tribunal's interference unjustified.

4. Evaluation of Evidence in Departmental Proceedings:
The enquiry officer's report, which found the charges unsubstantiated due to lack of direct evidence, was criticized for failing to appreciate that strict rules of evidence do not apply in departmental enquiries. The disciplinary authority's disagreement note highlighted that there was no actual export of goods, and the transportation firms were non-existent. The High Court emphasized that the evidence should be appreciated on the principle of preponderance of probabilities, supporting the disciplinary authority's findings.

5. Discrepancies in Penalties:
The respondents argued that different penalties were imposed on different officials for similar allegations. The High Court found that different officials had different mandates and lapses, justifying varied punishments. The Court reiterated that the award of punishment is within the disciplinary authority's domain, and the Tribunal or Court cannot sit in appeal over it. The High Court concluded that ample opportunity was given to the respondents to explain their cause, and the disciplinary authority's assessment was supported by records.

Conclusion:
The High Court set aside the Tribunal's orders and restored the disciplinary authority's order imposing a 50% cut in the respondents' pension for five years. The necessary revision in the pension order of the concerned respondents was directed to be issued forthwith. The writ petitions were allowed to the extent indicated.

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