2006 (9) TMI 445 - AT - Customs

Tribunal Affirms No Penalties for Customs Officers in Vitrified Tiles Case Due to Lack of Collusion Evidence.

The Tribunal upheld the Commissioner's decision to drop charges against customs officers under Section 112(a) of the Customs Act, 1962, due to ... Penalty on Appraisers - charge of abetment with the importer - Customs and Inspector of ICD - HELD THAT:- We notice that the ingredients for proving the charge of abetment as required u/s 112(a) has not been brought out in the show cause notice. There is no admission made by the Customs Officers in abetting in the offence charged. The importer and the CHA have not involved the officers. The officers have not been benefited in any way. The lapse on their part in not scrutinising the documents would at best be dereliction of duty, for which they can be proceeded in terms of CCR Rules. The act of offence is not a penal offence committed by them for involving them along with the offence of the importer and the CHA. The ruling rendered in the case of A.P. Sales [2006 (2) TMI 328 - CESTAT, BANGALORE] is exhaustive and deals with the present situation, while the situation in the case of Zaki Anwarv [2005 (10) TMI 159 - CESTAT, NEW DELHI] is different and the 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. Issues Involved:1. Charges of abetment against customs officers under Section 112(a) of the Customs Act, 1962.2. Classification and valuation of imported vitrified tiles.3. Confiscation and penalties related to mis-declaration of imported goods.4. Justification for dropping proceedings against customs officers.Issue-wise Detailed Analysis:1. Charges of Abetment Against Customs Officers Under Section 112(a) of the Customs Act, 1962:The revenue challenged the Order-in-Original No. 30/2004, where the Commissioner dropped proceedings against three appraisers and one inspector of ICD, Bangalore. These officers were charged with abetting the mis-declaration of quantities of imported tiles. The Commissioner noted that the Revenue did not produce any evidence of abetment under Section 112(a) of the Customs Act, which requires deliberate involvement in abetting. The Commissioner concluded that in the absence of evidence, the charges for imposing penalties under Section 114A could not be sustained.Specific charges against the officers included:- Shri M. Naushad: Failed to notice discrepancies in tile dimensions and substitution of documents, which could have detected duty evasion earlier.- Shri T.M. Gopinath and Shri Dharan Kumar: Did not record discrepancies in dimensions during examination, allowing the importer to substitute documents.- Shri Amit Choudhary: Did not verify the quantity declared in the Bill of Entry, resulting in duty evasion.The Commissioner found no evidence of collusion or benefit derived by the officers from the importer. The investigation did not prove that the officers had prior knowledge of the mis-declaration or that they gained any benefit. The Tribunal's judgment in Commissioner of Customs, New Delhi v. Hargobind Exports was cited, which held that dereliction of duty alone is insufficient for imposing penalties under Section 112(a).2. Classification and Valuation of Imported Vitrified Tiles:The Commissioner ordered the classification of vitrified tiles under Chapter Heading 6907.90 of the Customs Tariff and Chapter Heading 6905.10 of the Central Excise Tariff. The assessable value of the tiles imported under Bill of Entry No. 2416 dated 5th April 2003 was determined at Rs. 46,08,848/- under Rule 8 of the Customs Valuation Rules, 1988, read with Section 14 of the Customs Act, 1962. The maximum retail price for the tiles was set at Rs. 950/- per sq. mtr. for calculating countervailing duty.3. Confiscation and Penalties Related to Mis-Declaration of Imported Goods:The Commissioner held that:- 11,094.60 sq. mtrs. of vitrified tiles imported under Bill of Entry 2416 dated April 2003, valued at Rs. 45,63,216/-, were liable to confiscation under Sections 111(l) and 111(m) of the Customs Act, 1962.- 16,545.60 sq. mtrs. of vitrified tiles imported under Bills of Entry No. 21571 dated 28th December 2002 and 501 dated 20th January 2003, valued at Rs. 68,83,437/-, were also liable to confiscation under Sections 111(m) and (l).The Commissioner confirmed the demand for differential duty and anti-dumping duty on the imported goods, along with interest under Section 28AB of the Customs Act, 1962. Penalties were imposed on M/s. G.M. Exports, its representatives, and the CHA firm under Sections 112(a) and 114A of the Customs Act, 1962.4. Justification for Dropping Proceedings Against Customs Officers:The Commissioner dropped the proceedings against the customs officers, citing the lack of evidence to prove abetment. The Tribunal upheld this decision, noting that the show cause notice did not explicitly bring out the ingredients for proving abetment under Section 112(a). The officers' failure to scrutinize documents was deemed dereliction of duty, not a penal offense. The Tribunal referenced its judgment in A.P. Sales v. CC, Hyderabad, which emphasized that dereliction of duty alone does not justify penalties under Sections 112(a) and 114A without evidence of collusion or benefit.Conclusion:The Tribunal concluded that the revenue failed to provide sufficient evidence to penalize the customs officers under Section 112(a). The officers' actions were deemed negligent but not collusive or beneficial to them. The Commissioner's decision to drop charges against the officers was upheld, and the appeals by the Revenue were rejected.