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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 ..... me. 2.1 The facts arising for consideration in these cases are as follows: (i) One M/s R. S. Exports presented eight Shipping Bills dated 11.09.2000 under Drawback claim declared to contain cotton / power loom readymade garments comprising of ladies tops and ladies pyjamas having unit price US $6.9 per piece and US$7.5 per piece respectively. The consignments of all eight shipping bills were carted in STP comprising of 325 cartons and the export documents were presented to customs for examination and were given let export order on 13.09.2000. The goods were sought to be cleared for export on 'self' and no CHA was officially engaged for carting, examination or shipment related other works. The total FOB value of all the eight consignments was Rs. 73,08,562.50 and Drawback amount involved was Rs. 12,05,918.00. The goods were examined on 13.09.2000 and stuffing was allowed after let export orders were given on the same day. (ii) M/s S.P. Exports presented six Shipping Bills dated 11.09.2000 under Drawback claim declared to contain readymade garments. The consignments of all six shipping bills were carted in STP and the export documents were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and goods were examined under panchnama. The examination resulted in recovery of old and used clothes/carpets. Investigation were carried out and statements of various persons concerned were recorded and finally Show Cause Notices were issued to the exporters along with fraudsters involved in the matter and the Appellant Shri Harvinder Singh, the then Examiner. Confiscation of the goods and penalty under section 114(iii) of the Customs Act, 1962 on the Appellant were proposed. The Appellant was asked to show cause as to why penal action should not be taken against him for aiding & abetting in the acts of the exporters to defraud the Government revenue by way of claiming huge drawback on the said exports. The appellant contested the show-cause notice on various grounds. The adjudicating authority i.e. Commissioner of Customs (Export Promotion), Mumbai-I has adjudicated the case by passing an order for confiscation of the goods etc. under Section 113 (d) & (i) of the Act, with redemption fine of Rs. 50 lakhs. The Adjudicating authority had imposed penalty of Rs. 2,00,000/- in the case of R.S Exports (mentioned in para 2.1 (i) above) and Rs. 1,00,000/- in each case mentioned in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . That the shipping bills in question for examination were marked to Shri Harvinder Singh, E.O. by the Asstt. Commissiner of Customs, STP; that the Let Export Order was given in good faith as there was lot of rush in the shed and it was not possible to examine and supervise the examination of export goods; that he did not remember the person who had come to take the signature on the Let Export Order; that he agreed that the goods examined under panchanama by SIIB (X) officers were old and used and not fit for export. (emphasis supplied). 3.4 That the officer(s), the Sepoy, who registered the documents from the unknown persons and the Superintendent (Responsible for Supervision), who gave, Let Export Order in all the consignments and Assistant Commissioner (incharge) who marked these shipping bills for the appellant were allowed to go scot free ignoring collective and higher responsibility, and they were neither made Noticee in the Show Cause Notice nor any action was taken against them under any Rules by the department. 3.5 There is no allegation that the Appellant has taken any monetary consideration from the exporters. Also there was no recovery of any unaccounted money or incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side. 3.14 The Ld. Advocate for the Appellant also requested to drop the penalty against the Appellant on the ground that section 155 of the Customs Act, 1962 barred action against the Customs Officers. In this regard the Ld. Advocate relies on the following case laws in favour of the Appellant's defence: (i) Commissioner of Customs, New Delhi vs. M.I.Khan - 2000 (120) E.L.T. 542 (Tri) (ii) Commissioner of Customs, New Delhi vs. Hargovind Export - 2003 (158) E.L.T. 496 (Tri.-Del.) (iii) A.P. Sales vs. Commissioner of Customs, Hyderabad - 2006 (198) E.L.T. 309 (Tri.Bang.) (iv) Commissioner of Customs, Bangalore vs. M. Naushad - 2007 (210) E.L.T. 464 (Tri-Bang). (v) Brajesh Y. Tiwari vs. Commissioner of Customs (Import), Mumbai - 2012 (283) E.L.T. 295 (Tri-Mum.) 4. That the learned AR appearing for the Revenue strongly reiterated the findings of the Adjudicating Authority, and contended that the appellant have not performed his duty, which led to the opportunity to exporters for availing the benefit, which otherwise they were not entitled to. The goods which were claimed to be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged abetting in the offence charged. Neither the exporters, if any, nor the CHA have made any incriminating statement, implicating the appellant Examining Officer. The appellant has not been benefited in any way. The alleged lapse on his part in not examining the goods properly and feeding of un-qualified examination report in the EDI System without examining the goods would at best be dereliction of duty, for which he can be proceeded in terms of Conduct Rules. The dereliction in duty is not a penal offence committed by him for implicating him along with the offence by the exporters, CHAs and others. The ruling rendered in the case of A.P. Sales (supra) is exhaustive and deals with the present situation while the situation in the case of Zaki Anwar (supra) is not distinguishable in the present case and so the findings by this Bench in the case of A.P. Sales (supra). The findings rendered in the case of A.P. Sales (supra) in Paras 5-7 are noted herein below: " 5. On a careful consideration, it is seen that appellants were acting as Superintendent and Inspector in the O/O The Commissioner of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs Act. The Commissioner has given his findings that there is no evidence on record to show that any act or omission on the part of the Respondents has rendered the goods liable for confiscation under Section 113 of the Customs Act. In the appeal filed by the Revenue, it has not been highlighted that there is any material to show that the Respondents had connived with the exporter in misdeclaring the goods. What has been mentioned in the Memorandum of Appeal, filed by the Revenue, only highlights the dereliction of the duty by the Respondents which is not sufficient for imposing penalty under Section 114 of the Customs Act. The learned Advocate has emphasized that there is no allegation or proof of consideration having been demanded by the Respondents or paid or supposed to be paid by the exporter. We also observe that this aspect has also been mentioned in the impugned order. The exporter, Shri Kuldeep Singh, has clearly denied knowing any of the Respondents personally. In his statement, he has only mentioned that one Shri Akhilesh Kala knew the Assistant Collector. But Shri Akhilesh Kala has not been traced out during investigation nor he has participated in the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in so far as they concern with the three Respondents viz., S/Shri M.I. Khan, R.K. Sharma and Hangshing." In similar circumstances, The Tribunal in the case of P.K. Sharma v. CC, New Delhi [2002 (148) E.L.T 658] has also allowed the appeal by setting aside the penalty on the Inspector. Finding recorded in para 5 is reproduced herein below: "We have heard the rival submissions. We find that the Department's entire case is built on the date found in the computer entered against the number allotted to the appellant. We note that presently simultaneously data is recorded in the documents and fed into the computer. Thus, there should have been a hard copy of Bill of Entry where the examination report was recorded and was alleged to have been recorded by the appellant. We find that there is no mention whatsoever as to what happened to this hard copy of the Bill of Entry bearing the examination report under the signature of the appellant. Moreover, in the Customs Bills of Entries are not examined by the Inspector on their own but they are allotted the Bill of Entry and marked to the officers concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defraud, but not with an honest belief that the transaction was a valid one, and that he was dealing with a good bill." "Sale of Goods Act, 1893: A thing is done "in good faith" when it is, in fact done honestly, whether it be done negligently or not." 23. Ballentine : Law Dictionary (U.S.A.) "A statutory definition of the term is, an honest intention to abstain from taking any unconsientious advantage of another, even through the forms and technicalities of law, together with an absence of all information or belief of facts which would render the transaction uconscientious. As applied to the holder of a forged cheque, to establish good faith there must not only be an absence of knowledge of any invalidity, but an absence of circumstances which would put an ordinarily prudent man upon inquiry. As an element tending to rebut malice in libel and slander, good faith requires proper consideration for the character and reputation of the person whose character is likely to be injuriously affected by the publication. There must be absence, not only of all improper motives, but of negligence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 three in number viz., whether, when the cheroot tobacco had been pledged to the plaintiff bank, the defendant or its servants broke open the lock of the godown; secondly, whether the action of the Government in attaching the cheroot tobacco pledged to the plaintiff bank for the amount due on the beedi tobacco, is illegal and male fide ; and thirdly, whether by reason of any act or omission on the part of the Government servants negativing good faith, after the disposal of the claim petition preferred by the State in favour of the plaintiff bank, the defendant would be liable in damages. In all these points I have come to the same conclusion as both the Courts below and here are my reasons. 27. Point 1: Both the Courts have found that the defendant or its servants did not break open the godown of Rahamatullah and remove the goods to Sundaram Pillai's godown and that what happened was that on the application of the surety Sundaram Pillai the Excise authorities permitted the transfer of the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow 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 also rightly failed. 30. The plaintiff has throughout failed to show want of good faith on the part of the Excise Officials. It is not for the Union Government to establish its good faith but it is for the plaintiff bank to establish its want of good faith. On the failure of the plaintiff bank to establish want of good faith on the part of the Union Government, the two consequences follow, viz., that the plaintiff bank is barred from filing this suit under Section 40(1) of the Central Excises and Salt Act, 1944, and that this suit instituted for an act done or ordered to be done, after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of, which has been the case here because the attachment was effected certainly long prior to six months of the date when the suit was instituted, would be barred by limitation under Section 40(2). 31. In the result, this second ..... X X X X Extracts X X X X X X X X Extracts X X X X
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