Bank manager's penalty under Customs Act overturned due to lack of evidence of collusion or personal benefit

The Appellate Tribunal set aside the penalty imposed on a Bank manager under Section 20 of the Customs Act for opening current accounts in the name of a proprietor and a company involved in overvaluing goods. The Tribunal found no evidence of collusion or personal benefit, concluding that the penalty was not sustainable. The appeal for waiver of the penalty was allowed.

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Issues involved: Appeal for waiver of penalty u/s 20 of Customs Act imposed on a Bank manager for opening current accounts in the name of a proprietor and a company involved in overvaluing goods for higher drawback.

Summary:

Issue 1: Penalty under Section 20 of Customs Act

The appeal was filed seeking waiver of a penalty of Rs. 10,000/- imposed on a Bank manager for opening current accounts in the name of a proprietor and a company, alleged to be involved in overvaluing goods for higher drawback. The contention of the appellant was that the accounts were opened based on introductions from existing account holders and there was no evidence of personal benefit from the drawback claimed by the company.

Issue 2: Responsibility of Bank Manager

The Revenue argued that the Bank manager is responsible for verifying the credentials of individuals opening accounts, especially in cases where misdeclaration of goods and availing higher drawbacks are involved. The Revenue highlighted the absence of the proprietor during the investigation as a basis for imposing the penalty.

Judgment:

The Appellate Tribunal found that the Bank manager, in this case, had not colluded with the exporter or gained from the drawback claimed by the company. The accounts were opened following due verification and introductions by existing account holders. As there was no evidence of personal benefit or connivance, the Tribunal held that the penalty imposed was not sustainable and consequently set it aside, allowing the appeal.

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