2012 (5) TMI 193 - HC - Customs

Court remits case to Reward Committee for review of rewards citing inconsistencies

AMRIT LAL MEHTA Versus DIRECTOR GENERAL OF REVENUE INTELLIGENCE & OTHERS

The court remitted the case back to the Reward Committee to reconsider the rewards awarded, citing inconsistencies and arbitrariness in their decisions. ... Writ petition - to pay the reward @ 20% on the entire duty including penalty and fine as earlier sanctioned – Held that:- The Reward Committee in the last two minutes of meeting held has opined that the information given by the petitioner was of generic nature and according to the role played, the petitioner is entitled to reward @ 8.33% on Rs.60 lacs and 8.28% on Rs.160 lacs - there is a contradiction between the findings recorded in the minutes of the Reward Committee one in which it was decided that the petitioner would be paid reward @ 15% on all future realization of the penalty amount - merit in the contention of the petitioner that there is element of arbitrariness, inconsistency and disagreement in the three minutes - the difference in monetary terms in view of the quantum is substantial - an order of remit to the Reward Committee to consider afresh the rewards awarded vide minutes dated 26th March, 2009 and 10th March, 2010. Issues Involved:1. Quantum of reward payable to the petitioner.2. Entitlement to reward on penalty and fine amounts.3. Consistency and arbitrariness in the decisions of the Reward Committee.4. Legal right to claim reward and the nature of such reward.Detailed Analysis:Quantum of Reward Payable to the Petitioner:The petitioner contested the quantum of the reward released to him, arguing that he was initially sanctioned a reward at 20% of the customs duty but later received reduced percentages on the penalty and fine amounts. The petitioner sought a directive for the respondents to pay the reward at 20% on the entire duty, including penalty and fine.Entitlement to Reward on Penalty and Fine Amounts:The respondents, including the Director General of Revenue Intelligence and Investigation, Chairman, Central Board of Excise and Customs, and Union of India, did not dispute the levied and recovered duty and penalty amounts. The Reward Committee's decisions varied on the reward percentages for penalty and fine amounts, ranging from 15% to 8.28%. The Reward Committee initially awarded rewards close to the maximum permissible rate on the principal amount of customs duty but awarded lower percentages on penalty and fine amounts.Consistency and Arbitrariness in the Decisions of the Reward Committee:The Reward Committee's decisions exhibited inconsistencies and arbitrariness, particularly in the minutes dated 26th March 2009 and 10th March 2010. The Committee initially decided to pay 15% on future realizations of the penalty amount but later reduced the reward percentages to 8.33% and 8.28%, citing the generic nature of the information provided by the petitioner. This inconsistency was noted as an error in the decision-making process.Legal Right to Claim Reward and the Nature of Such Reward:The court reiterated that the reward is an ex gratia payment and not a matter of right. The Reward Committee has the discretion to determine the reward based on various factors, including the specificity and accuracy of the information, the risk and trouble undertaken, and the extent of help rendered by the informer. The Supreme Court in earlier cases (Union of India vs. C. Krishna Reddy and Union of India vs. R. Padmanabhan) held that no vested right exists to claim a reward, and it is an ex gratia payment subject to the guidelines of the competent authority.Court's Directives:1. The court remitted the case back to the Reward Committee to reconsider the rewards awarded in the meetings dated 26th March 2009 and 10th March 2010.2. The court clarified that the percentage and extent of reward for the principal amount (customs duty) and the penalty/fine amount could vary and need not be the same.3. The Reward Committee was directed to independently apply their mind without being bound by the findings of the meeting dated 6th November 2007.4. The petitioner was allowed to make a written representation to the Reward Committee within three weeks.5. The court expressed hope for an expeditious resolution by the Reward Committee and did not express any opinion on the entitlement to an enhanced reward.The writ petition was disposed of with no costs.