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TMI Blog2006 (9) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts are clearly distinguishable. The judgment rendered in the case of CC, New Delhi v. M.I. Khan [ 2000 (6) TMI 64 - CEGAT, NEW DELHI] is not distinguishable in the present case. Thus, it is also seen that Revenue has not brought out any cogent evidence in the show cause notice nor in the grounds of appeal to implicate the Customs Officers in the offences charged. Therefore, the order passed by the Commissioner dropping the charges against these officers is justified and requires to be upheld. There is no merit in these appeals and the same are rejected. - S.L. PEERAN (J) AND T.K. JAYARAMAN (T), MEMBERS For the Appellant : K.J. Sanchis, Authorised Representative (JDR) For the Respondent : B.N. Gururaj, Ramesh Ananthan and Padmini Sundaram, Advs. ORDER S.L. PEERAN, MEMBER (J) 1. The revenue is aggrieved with the Order-in-Original No. 30/2004 Cus. Adjn. (Commr.) dated 31.8.2004 by which he has dropped the proceedings against three appraisals and one inspector of ICD, Bangalore. These officers of the Customs Department had also been charged in the show cause notice for having abetted in the offence of mis-declaration of the quantities of verif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first and as per the Examination Report, the dimension of the tiles was 500 x 500 x 10 mm and 600 x 600 x 10 mm and the Invoice and the Packing List were substituted. Shri. M. Naushad, Appraiser failed to notice the change in the dimension of the tiles and the substitution of the documents. Further, he failed to: cross check the arithmetical calculation on the quantity declared in the Bill of Entry with the packing list. Had he taken care to see these things, the evasion of duty by the importer could have been detected earlier. In view of this, he has been charged with abetting with the Importer and the CHA in the evasion of duty rendering himself liable to penalty under Section 112(a) of the Customs Act, 1962. 200. The charges against Shri. T.M. Gopinath, Appraiser and Shri. Dharan Kumar, Inspector, ICD are that when the Bill of Entry No. 2416 dated 5.4.2003 was sent for examination on 8/4/2003, they had noticed the discrepancy in the dimensions of the tiles. Whereas, the invoice and the packing list showed dimensions to be 400 x 400 x 10 mm and 600 x 600 x 10 mm, on actual examination, they found the dimensions to be 500 x 500 x 10 mm and 600 x 600 x 10 mm. This discrepancy w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icers. 203. I have considered the submissions of Shri. Amit Choudhary. The only charge against him is that he had assessed the Bill of Entry No. 21571 dated 28/12/2002 and in respect of the said Bill of Entry, there was mis-declaration of quantity which was unearthed by the investigation subsequently. If Mr. Amit Choudhary had shown adequate care, he could have probably detected the mis-declaration at the time of assessment itself. Investigation has not revealed whether in the said case, the assessment was on second check basis or on first check basis. If the method of assessment was on second check basis, the assessing officer, based on the declaration furnished by the party assesses to duty and thereafter, before the goods are cleared out of Customs charge, the examination of the goods is carried out. In that case, the assessing officer will never know of any discrepancy unless at the examination stage the discrepancy is noticed and it is brought to the knowledge of the assessing officer. Therefore, in this case, it cannot be alleged that Shri. Amit Choudhary knew of discrepancy and actively abetted the commission of the offence. None of the documents produced or the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment to the Bill of Entry for changing the declaration of the goods from Ceramic tiles to Vitrified Ceramic Tiles; at that point of time he ordered for first Check Examination i.e., examination first and assessment later. Subsequently, when the 8111 of Entry was returned to him on 9/4/2003, he perused the Examination Report, which stated that the pods were in accordance with the declarations given in the Invoice and the Packing List. He did not notice the substitution of invoice and the packing list which was due to oversight and there was no deliberate attempt on his part to connive with the party in evasion of Customs Duty. He relied upon the judgment of the Tribunal in the case of CC, New Delhi v. Hargobind Exports and Ors. In 2003 (158) E.L.T. 496 in support of his contention and Commissioner of Customs, New Delhi v. M.I. Khan, 2000 120 E.L.T. 542 and UOI v. J. Ahmed, AIR 1979 SC 1022. 206. I have considered his submissions very carefully. There is no doubt that there are lapses on the part of the officer in the assessment of goods imported vide Bill of Entry No. 2416 dated 5.4.2003. If he had taken care and inquired into the matter, it might be possible that he could h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport brought out clearly, the difference they noticed in the actual dimensions of the tiles under importation when compared to the documents submitted. They have not done so. Thus there is a mistake and omission on their part, but there is nothing on record to show that this was an intentional one. As has been held in the judicial pronouncements cited above, and also in the case of A.N. Bhat Collector of Customs, reported in 1991 (55) E.L.T. 580, wherein it was held that mere negligence or want of diligence on the part of Customs officers in clearing the goods would not ipsofacto render their act culpable inviting penal consequences in law. Applying the ratio of this decision, I hold that the penal action proposed against the officers under Section 112(a) of the Customs Act is not sustainable in law, in the facts and circumstances of the case. 210. However I hasten, to make it very clear here that the observations made above are only in respect of the charges proposed against the Customs Officers under the provisions of the Customs Act, 1962. The question of initiating departmental action against the officers is a matter that should be considered separately by the proper auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1962; (i) The amount of Rs. 20,00,000/- paid vide Challans dated 12th April 2003 and 16th April 2003 paid by MIS GM Exports shall be appropriated towards the above duty demands. I further order that Bank Guarantee of Rs. 18 lakhs executed by M/s. GM Exports for goods provisionally released under Bill of Entry 2416 dated 5th April 2003 shall be encashed and adjusted towards the duty demands. (j) I confiscate the quantity of 8119.84 Sq. mtrs of vitrified tiles seized from the various godowns of M/s. GM Exports under the provisions of Section 111(l) and 111(m) of the Customs Act, 1962. However, I give art option to M/s GM Exports to redeem the said quantity of 8119.84 sq. mtrs. Vitrified tiles valued at Rs. 33,70,638/- at various godowns on payment of redemption fine of Rs. 10,00,000/- (Rupees Ten lakhs only) under the provisions of Section 125 of the Customs Act, 1962. Further, they shall be liable to pay anti-dumping duty on the said goods at the time of redemption. The said option to redeem the goods shall be exercised within 30 days from the date of receipt of this order. (k) I impose a penalty of Rs. 35,22,296/- (Rupees Thirty five lakhs twenty two thousand two hundred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgments that for charging under Section 112(a) and penalizing under Section 114A, the officer's involvement in the offence and abetment should be established. Their collusion with importer and CHA has to be brought out in the show cause notice explicitly. It is their submission that all the ingredients of the Section have not been complied with and in absence of any evidence, the dropping of charges on these officers is justified and requires to be upheld. 4. On the other hand, the learned JDR strenuously argued the matter in terms of the grounds made out and contended that the officers have not performed their duty which led to the appellants availing the benefit, which otherwise they were not entitled to. He submits that the Tribunal in the case of Zaki Anwar v. CCE 2006 (197) ELT 510 (Tri.-Del.) pertaining to Custom Inspector has not been granted the benefit of setting aside the penalty imposed under Section 114, for not examining the goods which resulted in higher drawback claim of the export. The learned Counsel on the other hand distinguished the judgment on the ground that the Tribunal ought not to have deferred with the ruling of CC, New Delhi v. M.I. Khan 2000 (120) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licit and the only ground made out is that the appellants ought to have examined the containers fully and discovered discrepancies in the documents vis-a-vis the contents in the containers. Ld Commissioner has clearly held that there is only dereliction of duty. In the circumstances, the charge of the revenue under Section 114 and consequence imposition of the penalties are required to be set aside. Furthermore on this very issue the citations relied by the appellants clearly apply to the facts of the case. In the case of CC, New Delhi v. Hargovind Export [2003 (158) E.L.T. 496], the Tribunal has clearly held that penalty cannot be imposed under Section 114 of the Customs Act on the mere charge of dereliction of duty and the benefit has to be given to the officers. The Commissioner's dropping the demands have been upheld by the Tribunal. The finding recorded in Para 6 of the order is reproduced herein below. We have considered the submissions of both the sides. The show cause notice was issued to the Assistant Collector, Superintendent and Inspector who were posted at Air Cargo Complex, Indira Gandhi International Airport, New Delhi for imposition of penalty under Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondents. In view of this, we find no reason to interfere with the impugned order in so far as it relates to dropping of the charges against the three Respondents, namely. Shri W.L. Hang Shing, Shri M.I. Khan and Shri R.K. Sharma. All the appeals filed by the Revenue are thus rejected. The Tribunal in the case of CC v. M.I. Khan (supra) on identical facts has dismissed the Revenue appeal by holding in Para 12 as follows: We have considered the submissions advanced by both the sides. On the question whether the provisions of Section 155 would provide a bar to the initiation of adjudication proceedings against Officers of the Customs as in the present case we find that the Supreme Court decision in Costao Fernandes case (supra) has gone into this question (though in that case the proceedings related to criminal prosecution). It was observed that in the facts of the case, it will not be proper to disallow the protection under Section 155 to the Officer. We also observe that the protection available under Section 40 of the Central Excise Act, 1944 had been allowed to Asst. Collector of Central Excise acting in the exercise of his statutory powers. Section 40 of the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood faith which would protect Government servants in the discharge of their statutory duties. 21. The meaning of the term good faith can be gathered from the following Law Lexicons: Roland Burrows: Words and Phrases Judicially defined. Good faith requires not, indeed logical infallibility but due care and attention. Good faith , therefore, means absence of knowledge that a preference was intended. Funk Wagnalls. (New Standard Dictionary of the English Language (1953). Good faith - the observance of, or the intention to observe, honesty and fair dealing; absence of intention to deceive. 22. Stroud's Judicial Dictionary, 3rd edition (1953). In good faith Bankruptcy Act, 1883, would seem to mean innocent of the knowledge, and of the means of knowledge, that there is an adverse bankruptcy. A thing is to be deemed to be done in good faith, within the meaning of this Act, where it is in fact done honestly, whether it is done negligently or not. That section is obviously founded on the distinction pointed out in Jones v. Gordon (1877) L.R. 2 App. Cas. 616, by Lord Blackburn, between the case of a person who was 'honestly blundering and careless&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od faith where it is in fact done honestly, whether it is done negligently or not. Act X of 1897 (General Clause) Section 3(20); Eng. Bill of Exchange Act, 1892, Section 90. Nothing shall be deemed to be done in good faith which is not done with due care and attention. Act IX of 1908. (Limitation) Section 2(7). 25. Under the definition of the term in the Limitation Act nothing shall be deemed to be done in good faith which is not done with due care and attention . This is a stricter definition than the one adopted in Section 3(20) of the General Clauses Act, 1897, under which a thing shall be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or not : 13 I.C. 260. See also 1 Bom. 296 (Good faith and notice). The words good faith have no technical legal signification, but are to be taken in their ordinary acceptation, and mean simply, honestly in belief, purpose, or conduct. Cf. Butcher v. Stead (1875) L.R. 7H.L. 839; In re Avery (1887) L.R. 36 Ch.D. 307 Ex parte Watson L.R. (1888) 21 Q.B.D. 301. 26. Bearing these principles in mind, if we examine the facts of this case, the points which fall for consideration are thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Subordinate Judge who disposed of the claim petition did not amount to an adjudication in regard to the Government's right to enforce the realization of the duty on the beedi tobacco by attaching the cheroot tobacco. The learned Subordinate Judge himself in paragraph 7 of his order (Exhibit A-II) states Whether the pledge will affect the Government's right to claim duty or not is another matter . Again in paragraph 9 he states: 'The next question is whether the petitioner gets any charge by virtue of the attachment effected under Section 11 of the Act.... That question does not however arise for consideration in this matter in view of my finding that the respondent bank has got a charge on the goods attached . Secondly, both the Courts below have found that after the dismissal of the claim petition the Department did not object to the plaintiff in any way proceeding against the attached tobacco and that the plaintiff completely failed to show that the Department unnecessarily and improperly withheld the tobacco and that the detention of the goods was the direct cause of the alleged deterioration of the tobacco and its fetching a low price. Therefore, point 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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