TaxTMI 
TaxTMI 
2017 (2) TMI 529
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....4. During his tenure as Commissioner, the respondent approved the price/duty structure of the product "Blue Stratos After Shave Lotion" of M/s PJM Pharmaceuticals Pvt. Ltd. at Rs. 10/- per liter of pure alcohol content, which was infact the rate of excise duty for a medicinal product, though the product was a toilet product for which the excise duty was liable to be charged at 100% ad-valorem. After the respondent was transferred in the year 1991, the issue of wrong approval was addressed and a statement of short levy of duty on account of wrong classification was prepared. The department realized that on account of gross negligence of the respondent, a loss of Rs. 92,43,684.08/- was suffered by the exchequer during the years 1989-1991. Upon quantification of the losses, a recovery notice was issued to M/s. Colfax Laboratories (India) Pvt. Ltd. and M/s. PJM Pharmaceuticals Pvt. Ltd, which resulted in a protracted litigation between the two companies and the department. During the course of proceedings and in pursuance of the orders passed by the High Court of Bombay, the then Commissioner of Excise adjudicated the issue as to whether an After Shave Lotion would be classified as a m....
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....r issuance of chargesheet had approached the Tribunal by filing O.A. No. 2100/2006, which was decided in her favour on 07.03.2007. The Tribunal allowed the said OA and quashed the charge sheet as well as the order appointing the inquiry officer. 10. On an application filed by the respondent, the Tribunal held that the OA filed by the respondent herein was squarely covered by the order in the case of Ms.Naini and allowed the application by an order dated 19.04.2011, which has led to the filing of the present writ petition. 11. Learned counsel for the petitioners submits that the Tribunal has erred and failed to take into consideration that Ms.Naini had approached the Tribunal at the stage of issuance of the charge-sheet whereas the present respondent had filed his written statement of defence and admitted that he was negligent in passing the order reducing the excise duty from 100% to Rs. 10 per litre. Mr.Chhibber submits that the Tribunal has failed to take into consideration that it is settled law that a charge-sheet and disciplinary proceedings should not be quashed in routine and a delinquent officer must show that serious prejudice was caused to his right on account of the de....
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....ised legal issues. The matter was accordingly taken up with the Ministry of Law, the matter was again referred to CVC for their advice on 16.06.2005. CVC vide their OM dated 23.08.2005 retreated their advice of initiation of RDA for a major penalty against Smt. Jayaseelan. CVC had also nominated Mrs. Deepa Bajwa, CDI as Inquiring Authority in the case vide OM dated 04.01.2006 and accordingly Order of appointment of IO/PO were issued on 12.06.2006 with the approval of the then HM to conduct an oral Inquiry against Smt. Naini Jayaseelan. (v) That the case of Smt. Naini Jayaseelan was similar in nature and as Smt. Jayaseelan was the predecessor of Shri. Lalmalsawma, it was felt appropriate to await the outcome of the issues raised by Smt. Jayaseelan before initiating RDA for major penalty against Shri. Lalmalsawma, as advised by CVC. (vi) That after initiating Oral Inquiry against Smt. Jayaseelan and issuing of the order of appointment of IO/PO dated 07.06.06 in continuation of events, disciplinary proceedings against Shri. Lalmalsawma were also initiated with the approval of then HM on 08.08.06 and accordingly chargesheet was issued on 06.09.06 as initiation of disciplinary proceed....
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....der dated 07.03.2007 to attain finality, thus, the respondent herein cannot be discriminated. 17. It is further contended that the departmental enquiry was initiated against the respondent after a delay of 17 years, which resulted in a denial of reasonable opportunity to defend to the respondent. Counsel contends that as noticed by the Tribunal, the Articles of Charge in the case of Ms.Naini and the respondent were identical and thus, once the Articles of Charge stands quashed with respect to Ms.Naini, the petitioners cannot be allowed to penalize the respondent herein and follow a separate yardstick. 18. In support of his submissions, the learned counsel for the respondent has relied upon the following judgments: (i) State of Madhya Pradesh v. Bani Singh & Another, AIR 1990 SC 1308: "4. ...The irregularities which were the subject matter of the enquiry is said to have taken place between the years 1975-77. It is not the case of the department that they were not aware of the said irregularities, if any, and came to know it only in 1987. According to them even in April, 1977 there was doubt about the involvement of the officer in the said irregularities and the investigation wer....
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....oyee but in public interest and also in the interests of inspiring confidence in the minds of the government employees. At this stage, it is necessary to draw the curtain and to put an end to the enquiry. The appellant had already suffered enough and more on account of the disciplinary proceedings. As a matter of fact, the mental agony and sufferings of the appellant due to the protracted disciplinary proceedings would be much more than the punishment. For the mistakes committed by the department in the procedure for initiating the disciplinary proceedings, the appellant should not be made to suffer." (Emphasis Supplied) (iv) UOI v. Hari Singh, ILR (2014) 1 Delhi 443: "60. So far as the prejudice is concerned, the long period which has lapsed between the alleged transaction and issuance of charge sheet would by itself have caused memory to have blurred and records to have been lost by the delinquent. Therefore, the respondent would be hard put to trace out his defence. The prejudice to the respondent is writ large on the face of the record. The principles laid down by the Supreme Court as well as by this court in the judgments cited by the respondent and noted above squarely a....
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....consideration to the matter. We have also examined the rival submissions made by the counsels. 21. It may be noticed that the charge-sheet was issued to Ms.Naini in the year 2004 which reads as under:- " That Smt. Naini Jayaseelan, IAS, while posted and functioning as the Commissioner of Excise, Govt. of Goa, Daman & Diu during the year 1985 committed gross negligence and dereliction to duty in as much as she reclassified the produce of 'Old Spice After Shave Lotion' of M/s Colfax Laboratories (India) Pvt. Ltd., Goa from toilet product to medicinal product , though it was in fact a toilet product, and thereby reduced the duty chargeable on this product from 100% ad valorem to Rs. 6.60 per litre of pure alchohol content, causing a loss to the tune of Rs. 17,77,18,361=20, during the period 1985 to 1991, to the Government Exchequer Thus she had failed to maintain absolute integrity and devotion to duty, and committed an act unbecoming of a member of the Service, and thereby contravened Rule 3 of the All India Service (Conduct) Rules, 1968." 22. Aggrieved by the charge sheet, Ms.Naini filed O.A. No. 2100/2006 before the Tribunal, which was allowed on 07.03.2007; relevant portion of ....
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....ring the period 1989 to 1991, to the Government exchequer. Thus he failed to maintain absolute integrity and devotion to duty, and committed an act unbecoming of a member of the Service, and thereby contravened Rule 3 of the All India Service (Conduct) Rules, 1968." 25. When Ms. Naini had approached the Tribunal, her submissions were twofold; firstly, that mere charge of negligence in quasi-judicial proceedings is not sufficient; and secondly, that there was an inordinate delay in initiation of the departmental enquiry proceedings. Ms.Naini had urged that in 1991 when the Excise Commissioner had held that the reclassification done by the applicant was beyond her jurisdiction and at least, then the department enquiry could have been instituted against her, however, the Government chose to initiate departmental proceedings against her only in August, 2004, nearly 13 years after the order of the Excise Commissioner in 1991. It was argued that with the passage of time, the memory becomes dim and it would become difficult for the charged Officer to defend herself reasonably. 26. At this stage, it would be useful to reproduce the observations made by the Tribunal in paragraphs 3 and 4 ....
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.... note-sheets of the related department of the Government of Goa and thus, he would be unable to prepare a comprehensive defence. 30. Although the Tribunal has followed its previous order of Ms.Naini which the department did not choose to assail and thus attained finality; but to satisfy our conscious, we have examined as to whether the delay in this case is for reasonable and cogent reasons or as to whether the delay is unexplained. The reasons for the delay as per the petitioners have been extracted in paragraph 13 aforegoing. We find that the delay is not properly explained. The events as detailed by the petitioners do not explain the delay from the year 1991, when the lapse was detected, upto the year 2002, when the CBI was requested for sanction of prosecution. Thereafter, the advice of CVC" was obtained after a gap of two years in 2004. The CVC had advised initiation of regular departmental action and upon receiving of advice a charge-sheet was issued after 2 years against Ms.Naini and after 4 years against the respondent. 31. A faint explanation has been made that the charge-sheet issued against Ms.Naini was a test case and after two years against the respondent, a theory u....