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TMI Blog2010 (11) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... he department and held that the respondent had correctly appreciated the documentary evidence adduced by the department and REL & AEL, the department was wholly unjustified in issuing a charge sheet against the respondent in respect of Article II, adjudication order passed by the respondent while exercising quasi-judicial power was the foundation of the charge sheet and shorn of technicalities, at the heart of the charge was the allegation that the order was passed contrary to law to confer benefit upon the assessees. Meaningfully read, the charge sheet seeks to inculpate the respondent with reference to his acts performed in a quasi-judicial functioning and Tribunal has returned a correct verdict, petition is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated that the CIF value of gold will be equivalent to the total outflow of foreign exchange on account of gold content in the export product plus the admissible wastage and this will include imported gold and gold procured from other sources used in the export product." 3. Being aggrieved by the aforesaid circular issued by DGFT, REL filed a petition bearing No. 7256/2005 (GM-RES) under Articles 226 and 227 of Constitution of India before High Court of Karnataka, seeking quashing of the said policy circular and sought issuance of a direction to DGFT to redeem the licences in respect of which REL had completed exports in accordance with Foreign Trade Policy 2004-2009 by achieving the required value addition. In the said petition, it was contended on behalf of REL that studded gold jewellery items fall within paragraph 4.56.1(a) of Handbook of Procedures Volume I (2004-09) and therefore minimum value addition required for studded gold jewellery items is 7%; that they had utilized gold which was purchased locally from the open market in manufacturing studded gold jewellery items and that the value of local gold should also be taken into consideration in determining the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority for disposal will be for cases pending over one year, cases involving revenue over Rs. one crore and cases pending over six months. The plan for disposal is as under :- All cases over one year to be disposed of by 31-12-2006. All cases involving revenue over Rs. 1 crore by 31-3-2007 with a minimum disposal of six cases per month. 50% of the cases pending over six months to be disposed of by 31-3-2007. …….." 9. Disposing of the show cause notice, vide order dated 31-1-2007, the respondent who was then posted as Commissioner Customs, Bangalore determined that the department has not been able to prove the charges levelled by it against REL and AEL in the show cause notice dated 18-11-2005 and thus consequently the demand of customs duty raised in the said show cause notice was dropped. The operative portion of the order dated 31-1-2007 reads as under :- "79. In view, of the above it is held and Ordered as below:- I(1) The imported gold as per description and condition of the Advance Licence and has been utilized for manufacture and export of gold jewellery. The said exported jewellery has also not been misdeclared at the time of export. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose to hold back the surety Bonds executed by the two Exporter i.e. M/s. Rajesh Export Ltd., Bangalore and M/s. Adani Export Ltd., Ahemdabad, in case of any adverse judgment delivered by the Division Bench of Hon'ble Karnataka High Court, in respect of the points/issues raised in the writ petition No. 7256 of 2005 (GM-RES), (against which a Writ Appeal against the present judgment of the Karnataka High Court has been filed) and the same would be released only after the judgment is received and/or on receipt of directions from the joint DGFT Bangalore/Ahemdabad." (Emphasis Supplied) 10. On the next day i.e. 1-2-2007, the respondent got transferred to DRI, Bangalore. 11. Aggrieved by the order dated 31-1-2007 passed by the respondent in his capacity as Commissioner Customs, Bangalore the department filed an appeal under Section 129A(1) of Customs Act, 1962 before Customs, Excise, Sales Tax Appellate Tribunal (hereinafter referred to as "CESTAT"), South Zonal Branch, Bangalore. 12. On 24-8-2007 Deputy Director General of For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal) Rules, 1965. The relevant portion of the charge sheet reads as under :- "ARTICLES OF CHARGE FRAMED AGAINST SHRI H.V. CHAUHAN, THE THEN COMMISSIONER OF CUSTOMS, BANGALORE Article-I That the said Shri H.V. Chauhan, while functioning as Commissioner of Customs, Bangalore during the period of 5-5-2006 to 31-1-2007 passed an adjudication order No. 1/2007 dated 31-1-07 in the case of M/s. Rajesh Exports Ltd, Bangalore and M/s. Adani Exports Ltd., Ahemdabad dropping the proceedings initiated against the aforesaid exports for recovery of Customs duty foregone on 21428.693 KGs Gold imported by them duty free under Advance License Scheme under Foreign Trade Policy. Bangalore Customs (C.I.U.) investigated this case relating to the irregularities in exports made by the above firms and on completion of this investigation, a Show Cause Notice C. No. VIII/10/56/2005-Cus. Adj. dated 18-11-2005 was issued to M/s. Rajesh Exports Ltd., Bangalore and M/s. Adani Exports Ltd., Ahemdabad demanding Customs duty of Rs. 54,64,31,672/-, besides proposals for imposition of fine and penalties under various provisions of the Customs Act, 1962. Shri H.V. Chauhan at the time of adjudication was fully a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SCN. Therefore, it appears that Shri H.V. Chauhan, the then Commissioner of Customs, Bangalore has favoured M/s. Rajesh Exports Ltd. and M/s. Adani Exports Ltd. the Noticees of SCN dated 18-11-2005 by dropping the proceedings initiated by aforesaid SCN. As a quasi-judicial adjudicating authority, Shri H.V. Chauhan has failed to safeguard Government revenue and his action of dropping the case led to loss of revenue of Rs. 54,64,31,672/- to the Government. By the aforesaid commissions and omissions, Shri H.V. Chauhan while working as Commissioner of Customs, Bangalore failed to maintain absolute integrity, devotion of duty and acted in a manner unbecoming of a Government servant and thereby violated the provisions of Rule 3(l)(i), (ii) and (iii) of C.C.S. (Conduct) Rules, 1964. STATEMENT OF IMPUTATION IN SUPPORT OF ARTICLES OF CHARGES FRAMED AGAINST SHRI H.V. CHAUHAN, THE THEN COMMISSIONER OF CUSTOMS, BANGALORE Articles I & II ………….. 5. As the said matter is pending before the Division Bench of High Court, it was not legal and proper on the part of Shri H.V. Chauhan to take a final decision with regard to the value addition or other matters i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. and M/s. Adani Exports Ltd. Such an action on the part of Shri H.V. Chauhan has created doubts over the undue haste in the finalization of the case relating to M/s. Rajesh Exports Ltd. and M/s. Adani Exports Ltd. ………….." (Emphasis Supplied) 15. Vide order dated 10-2-2009 [2009 (243) E.L.T. 115 (Tri.-Bang.) CESTAT dismissed the appeal filed by the petitioner against the adjudication order dated 31-1-2007 passed by the respondent. The relevant portion of the appellate order reads as under :- "…. 4. Learned Special Counsel Shri P.R.V. Ramanan appearing for the revenue would submit that the impugned order is not correct for more than one reason. It is his submission that the Adjudicating Authority should have waited for the outcome of the appeal filed by the revenue before Division Bench of Hon'ble High Court of Karnataka. It is his submission that the Adjudicating Authority has overlooked para 28 of the Show Cause Notice, wherein it is indicated that the revenue reserves right to add/alter/amend/modify the Show Cause N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds on which revenue has filed appeals are as under :- …. It can be seen from the above reproduced grounds of appeal that the revenue's challenge is only on the ground that the Adjudicating Authority has not considered the evidence produced by the revenue in form of report received from Consul (Economics), Consulate General of India, Dubai, UAE. The importers at Dubai have cleared the consignment of 'gold scrap'. Mis-declaration charges were dropped based on the documents submitted by the respondents without causing any verification, and the importers were related to respondents. We gave anxious considerations to the oral and written submissions made by the learned Special Counsel for revenue. We find that the Adjudicating Authority, on the facts that exports were of gold jewellery manufactured/made of imported gold, has held as under :- …. 9.2 The next contention of the revenue is that the Adjudicating Authority has not properly considered the evidence adduced by the revenue in form of report received from the Indian Consulate, Dubai, UAE.... 9.3 We find that the present case before us, revenue has not given the copy of the report received from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the service on 30-11-2009. 19. The respondent urged before the Tribunal that he had passed the order in question in exercise of his quasi-judicial functions and the order passed by him was upheld by the superior appellate Tribunal and thus the same could not form the subject matter of a disciplinary proceedings. In respect of the charge of having violated the departmental instructions he referred to departmental instructions dated 21-12-2006 contents whereof have been noted by us in para 8 above to urge that he was justified in disposing of the pending matter i.e. the show cause notice. He also highlighted that the decision of the learned Single Judge of the Karnataka High Court not being stayed by the Division Bench he was fully justified in proceeding ahead with the matter. He highlighted before the Tribunal that his representations to the competent authority to decide whether the charge sheet should be withdrawn in light of the submissions made by him have not even been responded to, much less considered. The petitioner opposed the Original Application filed by the respondent by urging that the charge sheet could not be interdicted till the disciplinary proceedings con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his actions should be taken only after great caution and a close scrutiny of his actions and only if the circumstances so warrant. The initiation of such disciplinary proceedings is likely to shake the confidence of the public in the officer concerned and also is lightly taken likely to undermine his independence. Hence there is need for taking extreme care and caution before initiation of disciplinary proceedings against an officer performing judicial or quasi-judicial functions in respect of his actions in the discharge or purported to discharge his functions. It was highlighted that the department/disciplinary authority was refusing to decide the representations made by the respondent praying that in view of his order being upheld by CESTAT the charge sheet should be withdrawn. 24. The first and foremost question which has arisen for consideration in the present case is when can an action be taken against an officer with respect to his performing quasi-judicial functions. 25. The leading decision on the point is the decision of Supreme Court reported as Union of India v. K.K. Dhawan - (1993) 2 SCC 56. In the said case, the respondent was working as an Income-Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the discharge of his duty; (iii) if he has acted in a manner which is unbecoming of a government servant; (iv) if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers; (v) if he had acted in order to unduly favour a party; (vi) if he had been actuated by corrupt motive, however small the bribe may be because Lord Coke said long ago 'though the bribe may be small, yet the fault is great'. 29. The instances above catalogued are not exhaustive. However, we may add that for a mere technical violation or merely because the order is wrong and the action not falling under the above-enumerated instances, disciplinary action is not warranted. Here, we may utter a word of caution. Each case will depend upon the facts and no absolute rule can be postulated." (Emphasis Supplied) 26. In the decision reported as Zunjarrao Bhikaji Nagarkar v. Union of India - (1999) 7 SCC 409 = 1999 (112) E.L.T. 772 (S.C.) the appellant who was posted as Collector of Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that being a quasi-judicial authority, he is always subject to judicial supervision in appeal. 42. Initiation of disciplinary proceedings against an officer cannot take place on information which is vague or indefinite. Suspicion has no role to play in such matter……………….. 43. If every error of law were to constitute a charge of misconduct, it would impinge upon the independent functioning of quasi-judicial officers like the appellant. Since in sum and substance misconduct is sought to be inferred by the appellant having committed an error of law, the charge-sheet on the face of it does not proceed on any legal premise rendering it liable to be quashed. In other words, to maintain any charge-sheet against a quasi- judicial authority something more has to be alleged than a mere mistake of law, e.g., in the nature of some extraneous consideration influencing the quasi-judicial order. Since nothing of the sort is alleged herein the impugned charge-sheet is rendered illegal. The charge-sheet, if sustained, will thus impinge upon the confidence and independent functioning of a quasi-judicial authority. The entire system of administ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since in that particular case there was no evidence whatsoever that the employee had shown any favour to the assessee to whom refund had been made, it was held that the proceedings against him would not lie. In fact the Court set aside the disciplinary proceedings at the stage of the issuance of charge-sheet to the charged officer. 9. In our opinion, Nagarkar case was contrary to the view expressed in K.K. Dhawan case. The decision in K.K. Dhawan being that of a Larger Bench would prevail. The decision in Nagarkar case therefore does not correctly represent the law. Inasmuch as the impugned orders of the Tribunal and the High Court were passed on the law enunciated in Nagarkar case this appeal must be allowed. The impugned decisions are accordingly set aside and the order of punishment upheld. There will be no order as to costs." 28. In the backdrop of the afore-noted legal position, we proceed to determine the legality of the charge sheet issued against the respondent. 29. The tenor of the allegations leveled against the respondent are that while passing adjudication order dated 31-1-2007 he unduly favored AEL & REL. Be it noted here that In K.K. Dhawan's case ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt on the operation of the judgment passed by the Single Judge; (iii) while passing adjudicating order dated 31-1-2007 the respondent took due notice of the factum of pendency of the appeal filed by the department and safeguarded the interests of the department by directing that the surety bonds executed by AEL and REL shall be released to them only after dismissal of the appeal filed by the department; (iv) letter dated 24-8-2007 issued by Joint Director General of Foreign Trade impliedly provided implementation of the judgment passed by the Single Judge as no stay could be obtained by the department on the operation of the said judgment; and (v) the CESTAT found nothing irregular in the approach of the Tribunal in proceeding with the matter in question pending the disposal of the appeal filed by the department before the Division Bench of Karnataka High Court. (See the contents of paras 8.2 and 8.3 of the order passed by the CESTAT, noted in foregoing paras). In the teeth of said facts, by no stretch of imagination, it can be said that the respondent acted in a haste manner in proceeding with the matter in question and not awaiting the outcome of the appeal filed by the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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