Smt. Geeta V. Patil vs Commissioner Of Customs (General), ...

Appeal No. C/86599/13, C/86634/13 & C/86635/13 C/CO/91098/13

(Arising out of Order-in-Original No. CCG/PKA/01/2013 dated 31.12.2012 passed by the Commissioner of Customs (General), Mumbai).

For approval and signature:

Honble Shri Anil Choudhary, Member (Judicial)

======================================================

1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy : Seen of the order?

4. Whether order is to be circulated to the Departmental : Yes authorities? ======================================================

Smt. Geeta V. Patil Commissioner of Customs (General), Mumbai Appellant (in C/86599/13) Appellant (in C/86634 & 86635/13)

Vs.

Commissioner of Customs (General), Mumbai Shri V.M. Joshi Shri A.A. Salkar Respondent (in C/86599/13) Respondent (in C/86634/13) Respondent (in C/86635/13)

Appearance: Shri A.K. Prabhakar, Advocate Shri S.J. Shahu, Asstt. Commissioner (AR) for Appellant -Geeta V Patil for Appellant - Revenue

Shri S.D. Pradhan, Consultant Shri S.V. Parelkar, Consultant for Respondent - VM Joshi for Respondent - AA Salkar

CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)

Date of Hearing: 09.01.2015

Date of Decision: 09.01.2015

ORDER NO.

Per: Shri Anil Choudhary

All the three appeals arise from common order of adjudication No. No. CCG/PKA/01/2013 dated 31.12.2012 passed by the Commissioner of Customs (General), Mumbai.

2. The brief facts of the case are that on arrival of un-accompanied baggage, two separate baggage declaration form  (i) BDF No. 1048 dated 23.11.2009 was filed in the name of Shri Shahul Hameed Shabu, and other (ii) BDF No. 1032 dated 18.11.2009 was filed in the name of Shri Riyaz Ahmed Niyaz Ahmed. The goods had arrived by separate container, imported by separate person(s) named above. On some specific information, the officer of Directorate of Revenue Intelligence (DRI) examined the said consignments and both the assessees. As regards BDF No. 1048, the goods were declared as used household items like glassware/crockery, kitchenware/ cutlery etc. The details of the same are shown in the table below: -

BDF No. & Date Declared value Enhanced value Out of Charge Granted by the Customs officer 1048 23.11.2009 Rs.38,500/-

Rs.70,000/-

23.11.2009 1032 18.11.2009 Rs.50,500/-

Rs.1,01,500/-

18.11.2009

2.1 On investigation, the DRI found as regards BDF No. 1048 that there was gross mis-declaration. Out of 120 packages, 108 packages were HDPE bags/potlas and the rest 21 packages were wooden crates containing brand new high value branded furniture, glassware, chandelier parts and other household goods import from UK, and the value was ascertained to Rs.71,48,975/- and accordingly the goods were put in store on 2.12.2009. The examination also revealed that the potlas were in fact courier parcels sent by different consignors from UK to different consignees in India by misusing the passport of an unrelated passenger arriving from Dubai, UAE. Similarly, in respect of BDF No. 1032, the DRI ascertained the value of the goods to Rs.1.07 crore approximately. Accordingly, a show-cause notice dated 9.11.2010 was issued by Additional Director General, DRI, Mumbai calling upon to show cause as to why penalty should not be imposed under the Customs Act and penalty was also proposed on the officers involved in appraising and assessing the customs duty, namely, Shri V.M. Joshi, Superintendent of Customs, Smt. Geeta V Patil, Preventive Officer with respect to BDF N0. 1048 and Shri A.A. Salkar, Superintendent of Customs with respect to BDF No. 1032.

2.2 The adjudicating authority after granting personal hearing to the parties and after perusing the particulars and records, found that Khan Abdul Aziz alias Salman is the mastermind and key conspirator behind the smuggling racket, who misused the unaccompanied baggage mode for smuggling, by not declaring the high value goods and courier parcels by way of mis-declaration of description and value of the goods. It was further found that Riyaz Ahmed Niyaz Ahmed and Shri Shahul Hamed Shabu lent their passports to Shri Khan Abdul Aziz knowing fully well that, the same would be utilized for clearing unaccompanied baggage, which did not belong to them. They have signed the BDF and also on other Customs related documents. Other person namely, Shri Saajid Rasool Shaikh and Shri Mustafa Mohammed Paiklppu assisted Shri Khan Abdul Aziz alis Salman in aiding and abetting in the smuggling of the aforementioned goods. Shri Shivaji Shankar Kanse also assisted in clearance of such consignment and Shri Dinesh Ganpat Yadav, an ex-employee of CHA firm - M/s R.K. Shipping is also guilty, as he has not intimated that the consignment consists of wooden crates also.

2.3 Vide Order-in-Original dated 31.12.2012 (impugned order), penalty of Rs.50,000/- was imposed on the appellant  Geeta V Patil under Section 112(a) of the Customs Act, whereas no penalty was imposed on the respondent officers  (i) Shri A.A. Salkar and (ii) Shri V.M. Joshi on the observation that it is a case of vigilance action.

2.4 Accordingly Geeta V Patil has preferred Appeal No. C/86599/13 and the Revenue has preferred appeal No. C/86634/13 against Mr. V.M. Joshi and appeal No. C/86635/13 against Mr. A.A. Salkar. Mr. A.A. Salkar has also filed Cross-objection No. C/CO/91098/13.

3. It is brought to the notice of the Bench by the learned Counsel and learned AR that Shri Sharuk Passi, Mr. Abu Jani and Shri Sandeep Khosla, who were the actual owner of the goods approached the Settlement Commission and vide Order No. 49/Final Order/Cus/RKT/2011 dated 13.4.2011, the Settlement Commission settled the dispute with respect to Sharuk Passi at a customs duty of Rs.65,56,623/-, observing that no interest is payable as goods are provisionally released on payment of Rs.1.10 crores and further granted immunity from redemption fine (in lieu of confiscation) in excess of Rs.10 lakhs and also granted immunity from penalty in excess of Rs.5 lakhs.

3.1 Further, as regards Shri Abu Jani and Sandeep Khosla, Settlement Commission settled the dispute vide Final Order No. 48/Final Order/CUS/RKT/2011 dated 13.4.2011 at the customs duty of Rs.10,94,055/- and further holding that no interest is payable as the goods seized were provisionally released on payment of duty which was more than the duty demand and further granted immunity from redemption fine in excess of Rs.1,50,000/- and granted immunity from penalty in excess of Rs.1,00,000/-.

3.2 It is further evident from the impugned order that the order of Settlement Commission has been accepted by the ADG, DRI and Commissioner of Customs (General), Mumbai.

3.3 The Counsel for the appellant Smt. Geeta V Patil points out that no case of aiding and abetting is made out against the concerned Preventive Officer. At best a case of negligence in duty has been made out. It is further pointed out that vide Order-in-Original dated 27.7.2012 passed by the Commissioner of Customs (General) with respect to Disciplinary Proceedings against Smt. Geeta V Patil under Rule 14 of the CCS (CCA) Rules, 1965, she has been held guilty of negligence in duty and accordingly, punished to the extent that her pay was reduced by two stages in the time scale of PB-2  Rs.9300-34,800/- + Rs.4600 (GP), for a period of one year w.e.f 1.8.2012 with cumulative effect. It was further directed that she shall not continue to draw increment during the period of reduction and on expiry of the said period, the reduction will have the effect of postponing her future increments of pay. The Counsel further urges that the appellant has suffered double jeopardy as she has already suffered major penalty under the Disciplinary Proceedings for negligence. He further points out from the order of Disciplinary Proceedings, which is annexed to the appeal-book, wherein the Commissioner of Customs (General) observed I find that in the instant case, there is no tangible evidence on record which would indicate mala fide intention, or connivance of the Charged Officer (CO) with the CHA/Importer. During the inquiry proceedings, none of the witnesses has confirmed the fact that the act of omission and commission on part of the CO was with mala fide intention. Neither any evidence has been brought on record, nor has it been established during the oral inquiry that any illegal gratification was offered to the CO or any pecuniary gains were obtained by her. Accordingly, the Disciplinary Authority found that there is no violation of Rule 3(1) of the CCS Conduct Rules, 1984 and as such, the charge was held as not proved.

3.4 The learned Counsel further points out that once the dispute is settled with Settlement Commission with regard to the same transaction, the dispute stands settled as to all the connected persons, and he relies on the ruling of the Third Members decision of the Tribunal in the case of S.K. Colombowala Vs. Commissioner of Customs (Import), Mumbai  2007 (220) ELT 492 (Tri-Mum), wherein the question framed for third Member was whether the provisions relating to settlement of cases under the Customs Act can be considered to be identical to Kar Vivadh Samadhan Scheme justifying invocation of case laws under the Kar Vivadh Samadhan Scheme and the other question was referred that whether treating the appellants as mere co-noticees, waiver of penalty should be granted on the ground that the main accused have obtained immunity from penalty by the order of the Settlement Commission, this Tribunal answered the question in favour of the assessee, held by majority, that the question as to who played the main role is irrelevant for the reason that once the case is settled by the Settlement Commission, it is settled in its entirety and such a case then cannot be adjudicated quo other co-noticees. It was further held that the case against all co-noticees comes to an end once the order of settlement is passed in respect of the person entitled to file an application before the Settlement Commission and therefore, penalty imposed upon the appellants cannot be sustained and be set aside.

3.5 The learned Counsel further relies on the ruling of the Tribunal in the case of Commissioner of Customs, New Delhi Vs. G.S. Charpota  2009 (237) ELT 353 (Tri-Del), wherein, case of penalty on Departmental Officers, on allegation of abetment in fraud, where the officers had examined only 10% of the goods at factory, package no. certified and noted the particular packet numbers in ARE-1, samples were withdrawn from the exported goods. It was found that there is no evidence to show that the particular packets or samples were other than the declared goods. In view of no statements available of the officer, it was held that there is no evidence to show that the act of commission or omission amounted to aiding and abetting the importation of goods. It was further observed that no statement is available implicating the respondents in fraudulent activities of the exporter and accordingly, the appeal of the Revenue was dismissed.

3.6 The learned Counsel also relies on the decision of the Tribunal in the case of Yogesh Kumar Vs. Commissioner of Customs (Export), Nhava Sheva  2006 (201) ELT 66 (Tri-Mum) wherein, the fact that there was no evidence of connivance, malfeasance etc., it was held that the Preventive Officer cannot be held liable if the valuation is found to be incorrect. The Tribunal has also taken notice of the fact that Customs Superintendent has countersigned the examination report after being satisfied with the report and in such case, no penalty was found sustainable on the Preventive Officer.

Accordingly, the Counsel for the appellant officer pray for allowing the appeal and setting aside the penalty imposed on her by the Commissioner. Similarly Counsel for respondent officers pray for dismissal of appeal.

4. The learned AR relies on the impugned order with respect to the appellant(Geeta V Patil). As regards the respondent officers in other two appeals by Revenue, prays for setting aside of the impugned order and/or imposition of penalty.

5. The learned Counsel appearing for the respondent officers in the Revenues appeal also rely upon the findings on record as discussed herein above and further states that in absence of any statement or evidence of connivance or any aiding or abetting on their part, the penalty has been rightly not imposed upon them vide the impugned order and there is no infirmity in the impugned order with regard to the respondent officers. The Counsel for the respondent officers further points out that departmental proceedings against them under the CCS Rules. Proceedings in respect of Shri V.M. Joshi has already been finalized and he has been penalized, whereas, the proceedings against Shri A.A. Salkar is presently pending before the authorities and it is also pointed out that Mr. Salkar has since retired in April, 2010. It is also informed that Mr. Joshi has also retired on 31.10.2012. The Counsel for the respondent officers also relies on the ruling which is discussed herein above. Accordingly, they are pleading for dismissal of the appeal of the Revenue.

6. Having considered the rival contentions, I find that neither there is any charge of aiding or abetting on part of the officers, nor there is any charge of favouring the alleged importers for any monitory gain. At best the case appears to be of negligence in duty for which they have already suffered by way of major penalty under disciplinary proceedings. In this view of the matter, I hold that no penalty is sustainable against the appellant Smt. Geeta V Patil and accordingly, I set aside the penalty of Rs.50,000/- under Section 112(a) of the Customs Act against her. I further hold that no penalty was imposable against other two respondent officers namely, Shri V.M. Joshi and Shri A.A. Salkar and accordingly, I dismiss the appeal of the Revenue against them.

7. To sum up,

(i) Appeal No. C/86599/13 of Smt. Geeta V. Patil is allowed and appeals of the Revenue No. C/86634 & 86635/13 stand dismissed.

(ii) Cross objection No. C/CO/91098/13 filed by Shri A.A. Salkar is also disposed of.

(Dictated and pronounced in Court)

(Anil Choudhary) Member (Judicial)

Sinha

1