TaxTMI 
TaxTMI 
2010 (11) TMI 811
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....licences granted to them, REL and AEL imported duty free gold, manufactured the final product and exported the same; as claimed by them and in respect whereof they filed the necessary documents with the concerned department. 2. On 11-2-2005, DGFT issued Policy Circular No. 18/2004-09, which reads as under :- "Sub : Minimum Value addition norms and calculation of value addition for the studded jewellery items. Letters have been received from the licensing and customs authorities about the appropriate minimum value addition required for the export of studded gold/silver/platinum jewellery and how the value addition for such export is to be calculated. Handbook of Procedures Volume (2004-09) contains clear provisions regarding the above. These are reiterated for clarity. Minimum Value Addition The studded jewellery items falls under Para 4.56 1(a) of Handbook of Procedures Volume I (2004- 09), and accordingly the minimum value addition required for studded gold/silver/platinum jewellery of all types is 15%. How to calculate Value Addition Para 4.68 of the Handbook of Procedures Volume I (2004-09) is clear about how the value addition is to be calculated. I....
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....gment and order dated 15-6-2005 passed by the learned Single Judge of the High Court of Karnataka, DGFT filed an appeal bearing No. 1252/2005 under Section 4 of Karnataka High Court Act together with an application seeking stay of the operation of the impugned judgment dated 15-6-2005. Needless to state the appeal was before a Division Bench of the High Court of Karnataka. 6. Vide order dated 20-9-2005, the Division Bench admitted the aforesaid appeal for hearing but declined to grant any stay as sought for. It is thus apparent that the mandamus issued by the learned Single Judge was capable of being given effect to notwithstanding the appeal pending before the Division Bench. 7. On 18-11-2005, Commissioner of Customs, Bangalore issued a show cause notice to REL and AEL, inter alia, alleging that they have evaded custom duty in sum of Rs. 54,64,31,672/- by wrongly declaring exported items as studded gold jewellery/CE bangles instead of gold scrap and not achieving required value addition of 15% in the exported items as per para 4.61 of Handbook of Procedures of Foreign Trade Policy. 8. On 21-12-2006, the Chief Commissioner Customs issued an Office Order, rel....
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....ions of misdeclaration of the gold product at the time of export or misdeclaration of the imported gold at the time of import has not been made out, there is no ground or basis for raising any demand of Customs duty under notification no. 93/04 Cus. and/or proviso to Section 28 of the Customs Act, 1962 in respect of any quantity of gold imported. As such the demand of duty indicated in para 36 of SCN is not sustained and require to be dropped. (4) Since there is no case for demand of duty, the question of demand and levy of interest does not arise. (5) The exports made from India was studded gold jewellery, bangles, articles as per declaration in the shipping bill and other documents filed with the Customs at the time of export. Accordingly, all assessment of shipping bill, including provisional assessed shipping bills of Rajesh Export Ltd. and Adani Export Ltd. at Air Cargo Complex, Bangalore are to be finalized. (6) Further, as contravention of Section 111(o) and 113(i) of the Customs Act, 1962 has not been held, the question of imposition of penalty under Section 112(a) and Section 114(a) of the Customs Act, 1962 does not arise. II. In terms of Va....
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....ing to your earlier letters dated 19-1-2006 and 15-1-2007 on the above subject. The matter was deliberated upon in this Directorate in detail taking into account the following facts furnished by Regional Authorities concerned :- 1. M/s. Adani Exports have not availed any benefit under DFCB and Target Plus Scheme for the exports of studded jewellery for the period of these exports under consideration under advance authorization scheme. 2. Orders of Hon'ble High Court of Karnataka directing the RA to consider value addition to be 7% against which no stay could be obtained till date. ........ Accordingly, it is informed that for the exports of studded jewellery effected prior to 11-2-05 (i.e. prior to issuance of the Policy Circular No. 18 dated 11-2-05) where per gram value of precious stones is less than per gram value of gold, the said minimum value addition will be 7% and not 15%. Pending Export Obligation discharge applications may be processed accordingly."                   &....
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.... The hasty action on the part of Shri H.V. Chauhan, in dropping the proceedings initiated by the aforementioned S.C.N., has resulted in loss of revenue to the Government to the tune of Rs. 54,64,31,672/-. Thus by above acts of commission and omission, Shri H.V. Chauhan, the then Commissioner of Customs, Bangalore failed to maintain devotion to duty and acted in a manner unbecoming of a Government servant and thereby violated the provisions of Rule 3(1)(ii) and (iii) of C.C.S. (Conduct) Rules, 1964. Article-II That during the aforesaid period and while functioning in the aforesaid office, the said Shri H.V. Chauhan passed an adjudication order No. 1/2007 dated 31-1-2007 in the case of M/s. Rajesh Exports Ltd, Bangalore and M/s. Adani Exports Ltd., Ahemdabad dropping the proceedings initiated against the aforesaid exports for recovery of Customs duty foregone on 21428.693 KGs Gold imported by them duty free under Advance License Scheme under Foreign Trade Policy. While passing the adjudication order, Shri H.V. Chauhan has ignored the evidence adduced by the Department in the SCN. Shri H.V. Chauhan acting as a quasi-judicial adjudicating authority has relied on the copies of the....
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.... Customs was bound to follow the aforesaid instructions of the Board directing that cases where the Department had gone in appeal to the appropriate authorities be transferred to Call Book and it was improper on his part to decide a matter which is sub-judice....... 7. Shri H.V. Chauhan, as adjudicating authority should not have taken up this case for adjudication as the matter is pending in Hon'ble Karnataka High Court and in the light of the instructions contained in CBEC Circular No. 162/73/95 CX., 3 dated 14-12-95, the case should have been kept in Call Book. In deed, a Call Book is maintained in Bangalore Customs (Hqrs.) and it is noticed that cases not ripe for disposal were regularly transferred to the call book. During the year 2006, six cases and during the year 2007, fifteen cases were transferred to the call book as per the Call book register maintained in Bangalore Customs Commissionerate. ................... 11. Shri H.V. Chauhan assumed office as Commissioner of Customs, Bangalore on 5-5-06 and relinquished that office in Bangalore Customs on 31-1-07. At the time of his assuming charge, the number of adjudications pending at the level of Commissione....
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....ntry forwarded by the Indian Consulate revealed many discrepancies such as : .... 7 Learned counsel for revenue in rejoinder would submit that the Adjudicating Authority has not appreciated the entire evidence on record and rejected the evidence adduced by the department in the form of report received from the Consulate of India, Dubai.... 8.2 We would first deal with the issue of the revenue as to whether the Adjudicating Authority was in error to decide the show cause notice when an appeal is pending before the Division Bench of Hon'ble High Court of Karnataka.... It was submitted by the Special Counsel for revenue that revenue has challenged the above order in a Writ Appeal and the same is admitted in the Hon'ble High Court of Karnataka. On a specific query from the bench, it was submitted that the Division Bench of Hon'ble High Court of Karnataka has not stayed the order of the Hon'ble Single Judge. It is settled law, that unless there is a stay of the order by higher judicial forum, the order is binding. We note that in the absence of any stay of the order in W.P. No. 7256 of 2005, the learned Adjudicating Authority as not in error in taking up the matter....
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....d that the respondents have produced certified copies of the Bills of Entry filed by the importer before Customs authorities at Dubai. We are of the view that the finding of the Adjudicating Authority on this point is very relevant, which are as under : .... It is to be noted that the relevant documents produced by the respondents to support their case were attested by an officer from Indian Consulate, Dubai, UAE while the very same documents produced by the revenue through Indian Consulate were not attested. Suffice to say, that the documents produced by respondent has more evidentiary value, we hold that the reliance placed by Adjudicating Authority on such documents (as produced by the respondents) cannot be faulted with. 10. In totality, on the facts and circumstances of the case, we find that impugned order passed by the Adjudicating Authority is correct, legal and cannot be faulted with. 11. In view of the above reasonings, we are of the considered view that the impugned order needs to be upheld and we do so and reject the appeals filed by the revenue." 16. Thereafter, on 24-2-2009 the respondent made a representation to the department inter-alia....
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....passed by him in his capacity as quasi-judicial authority and holding that there was no occasion for the department to issue a charge sheet to the respondent in respect of an adjudication order passed by him when CESTAT had repelled the challenge of the department against the said adjudication order, vide impugned judgment and order dated 21-1-2009 the Tribunal allowed the Original Application filed by the respondent. 21. Aggrieved by the impugned judgment and order dated 21-1-2010 passed by the Tribunal, the petitioner has filed the present petition under Articles 226 and 227 of Constitution of India. 22. During the hearing before us, learned counsel for the petitioner submitted that the Tribunal committed an illegality in quashing the charge sheet issued against the respondent at the very threshold, for it is settled legal position that in the case of charges framed in a disciplinary inquiry, the Tribunal or Court can interfere only if on the charges framed (read with imputation or particulars of the charges, if any) no misconduct or other irregularity alleged can be said to have been made out or the charges framed are contrary to any law, which was not the positi....
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....and apparently with a view to conferring undue favor upon the assesses concerned'. An application was filed by the respondent before the Tribunal against the proposed inquiry, which application was allowed on the ground that since the assessment orders passed by the respondent as Income-Tax Officer were quasi-judicial the same could not have formed the basis of disciplinary action against the respondent. In appeal, the question formulated by Supreme Court for adjudication was whether an authority enjoys immunity from disciplinary proceedings with respect to matters decided by him in exercise of quasi-judicial functions. After examining early decisions of Supreme Court namely V.D. Trivedi v. Union of India - (1993) 2 SCC 55, Union of India v. R.K. Desai - (1993) 2 SCC 49, Union of India v. A.K. Saxena - (1992) 3 SCC 124 and S. Govinda Menon v. Union of India, AIR 1967 SC 1274, a three-Judge Bench allowed the appeal. The relevant observations made by the Court are being noted herein under as under :- "28. Certainly, therefore, the officer who exercises judicial or quasi-judicial powers acts negligently or recklessly or in order to confer undue favour on a person is not acting....
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....in K.K. Dhawan's case (supra) and the other decisions on the point, the Court observed as under :- "When we talk of negligence in a quasi-judicial adjudication, it is not negligence perceived as carelessness inadvertence or omission but as culpable negligence. This is how this Court in State of Punjab v. Ex-Constable Ram Singh interpreted "misconduct" not coming within the purview of mere error in judgment, carelessness or negligence in performance of duty. In the case of K.K. Dhawan the allegation was of conferring undue favour upon the assessees. It was not a case of negligence as such............. In the present case, it is not that the appellant did not impose penalty because of any negligence on his part but he said it was not a case of imposition of penalty. We are, however, of the view that in a case like this which was being adjudicated upon by the appellant imposition of penalty was imperative. But then, there is nothing wrong or improper on the part of the appellant to form an opinion that imposition of penalty was not mandatory. We have noticed that the Patna High Court while interpreting Section 325 IPC held that imposition of penalty was not mandatory which again we....
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....the constant threat of disciplinary proceedings."                         (Emphasis Supplied) 27. In the decision reported as Union of India v. Duli Chand - (2006) 5 SCC 680 = 2007 (207) E.L.T. 166 (S.C.) the question which has arisen for consideration before a three-Judge Bench of Supreme Court was whether disciplinary action can be taken against an employee on the ground that the employee had been found to be grossly negligent while discharging quasi-judicial functions. The respondent challenged the initiation of disciplinary proceedings against him before the Tribunal on the ground that no disciplinary proceedings would lie against an officer discharging judicial/quasi-judicial unless there was an element of moral turpitude. After placing reliance upon the decision of Supreme Court in Nagarkar's case (supra), the Tribunal allowed the application filed by the respondent on the ground that disciplinary proceedings would not lie against an officer discharging quasi-judicial functions unless it was established that the officer concerned had obtained an u....
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....dicial functions. 30. Whether the Tribunal was justified in quashing the charge sheet issued against the respondent at the very threshold? 31. As already noted herein above, the respondent made a representation dated 24-2-2009 to the department challenging the validity of the charge sheet issued against him by bringing a subsequent development to the notice of the department, which development had a very material bearing on the validity of the said charge sheet. The development pointed out by the respondent was that the CESTAT had dismissed the appeal preferred by the department against the adjudicating order dated 31-1-2007 passed by the respondent, which order formed the basis of disciplinary action initiated against the respondent. However, the department chose not to pay any heed to the said representation made by the respondent. In such circumstances, the Tribunal was well-justified in testing the correctness of the charge sheet issued against the respondent. 32. Whether the charge sheet issued by the department against the respondent was valid? 33. A reading of Articles of Charges framed against the respondent shows that following two irregular....