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TMI Blog2015 (1) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... xhaustive and deals with the present situation while the situation in the case of Zaki Anwar (2005 (10) TMI 159 - CESTAT, NEW DELHI) is not distinguishable in the present case and so the findings by this Bench in the case of A.P. Sales (supra). The Apex Court in the case of COSTAO FERNANDES (1996 (2) TMI 137 - SUPREME COURT OF INDIA) has clearly held that the Customs Officer is entitled to protection from under Section 155 read with Section 106 of the Customs Act. The ratio of this judgment would apply to the facts of the case. Penalty under Section 114 (iii) of the Customs Act, 1962 is held not sustainable, as the appellant has neither done anything nor omitted to do any act which act or omission would render such goods liable to confiscation, nor he has abetted in doing or in omission of any act which shall attract penalty provisions on him - Decided in favour of appellant. - Appeal No.C/1532, 1533 & 1534/05 and C/262/06 - Final Order Nos. A/1536-1539/2014-WZB/C-IV(SMB) - Dated:- 11-12-2014 - Anil Choudhary, J. For the Appellant : Shri A K Prabhakar, Adv. For the Respondent : Shri Senthil, Supdt. (AR) JUDGEMENT Per: Anil Choudhary: There are four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls under Drawback claim dated 11.09.2000 declared to contain cotton/power loom readymade garments comprising of ladies tops having unit price US $5.90 per piece. Each Shipping Bill contained 5000 pieces of ladies tops packed in 20 cartoons. The consignments of all eight shipping bills were filed through M/s Crown Shipping Agency (CHA 11/427) and goods were carted in STP comprising of 200 cartons for examination. The export documents were examined on 12.09.2000 and were given let export order on the same day. The total FOB value of all the eight consignments was ₹ 1,34,96,250/- and Drawback amount involved was ₹ 22,26,890/-. The goods were examined on 13.09.2000 and stuffing was allowed after let export orders were given on the same day. (iv) M/s T. C. Exports presented twenty two Shipping Bills under Drawback claim declared to contain cotton/power loom readymade garments comprising of ladies skirts having unit price US $ 7.5 per piece and ladies tops at US$6.9 per piece and Indian made woollen carpets US$ 39 per sq meter. The total declared quantity in the said consignments of all twenty two shipping bills was 140 rolls of handmade woollen carpets of 7700 sq mete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porters and the other co-noticees to defraud the exchequer declaring old and used garments and carpets as new garments and carpets in order to reap huge drawback benefit and fed the bogus examination report in the system, without carrying out proper examination of the impugned goods, as he was acting in connivance with the exporter. The goods were claimed to have been examined by the Appellant and for which he had entered unqualified examination reports in the EDI system. That Shri Harvinder Singh, the then Examiner did not examine the goods and fed the examination report as if examined, he committed acts of omission by not reporting the nature of the goods in the examination reports. That he favoured the exporter and helped in attempted export of mis-declared goods under claim of duty drawback. That the Appellant had given a clean and un-qualified examination report to the export consignments, which on subsequent 100% examination, were found to contain old and used carpets and garments. That he had knowledge about the offence being committed and acted in a manner to aid the offence by facilitating the examination of offending goods; that he failed to discharge his duties prudently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any incriminating statement against the Appellant. Therefore, charge for aiding and abetement is liable to be set aside. 3.8 The Adjudicating authority the Commissioner of Customs without any direct evidence has passed the impugned order holding the Appellant is liable for penalty, is merely based on assumptions and presumptions. It is settled law that an order passed on the basis of Assumptions and Presumptions cannot be sustained under law. 3.9 The Appellant had examined 2% of the cargo as per norms, and found the said cargo to be in conformity with the declared description. Hence, there was no impropriety or malafide in the examination made by the Appellant. 3.10 There was a time lag of 6-7 days in re-examination of the cargo. There is high possibility of replacement of cargo which were examined by the Appellant and the cargo which were examined by the Appellant and the cargo which was found during re-examination by the SIIB (Export), by the unscrupulous exporters whose identity was not traced out, and is still untraced. 3.11 The examination of goods/cargo is a collective exercise and was under the supervision of superintendent. In the subject case, neither the Supe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dymade garments having very little commercial value, clearly establishes that the appellant, the then examiner, failed to discharge his duties prudently and has helped the exporter(s) in the fraudulent export. He submits that the Tribunal in the case of Zaki Anwar v. CCE - 2006 (197) E.L.T. 510 (Tri-Del.) pertaining to Custom Inspector has not 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 for appellant on the other hand distinguished the judgment on the ground that the Tribunal ought not to have differed with the ruling of CC, New Delhi v. M.I. Khan - 2000 (120) E.L.T. 542 (T). The said ruling was not distinguishable. It also pointed out that in the present case, there is no charge on the officers for not having examined the goods and that has resulted in granting of higher drawback claim. Therefore, it is submitted that the judgment is distinguishable and the ruling of A.P. Sales (supra) of this bench would clearly apply to the facts of the case. 5. Considering the arguments and the submissions made and perusal of the Commissioner's order, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice. The charge is not explicit 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 Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show the knowledge of and the benefit to, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exposition of Governmental liability, emerges the further question as to what constitutes good 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . - Nothing is said to be done or believed in good faith which is done or believed without due care and attention. (Penal Code, Section 52). 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not liable either for the resultant deterioration or for the lesser price which the tobacco fetched in the Court sale. Point 2 also fails. 29. Point 3 : Both the Courts below have found that first of all the order of the 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-11) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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