Export fraud – Action against Customs Officers – Notice to be issued within three months, Commissioner correct in dropping proceedings against Officer
THESE appeals have been filed by the Revenue against the Order-in-Original No. 11/2004-Cus. dated 31.03.2004 passed by the Commissioner of Customs & Central Excise, Hyderabad -II Commissionerate. The respondents are (i) Shri Rajiv Kumar Agarwal, Deputy Commissioner of Customs & Central Excise and (ii) Shri. P. Srinivas, Superintendent of Customs & Central Excise, Hyderabad.
The facts M/s. Pashupathi Traders, Secunderabad, filed 8 Shipping Bills, all dated 03rd January, 2001 declaring the goods exported by them as “NAPROXEN” under the DEPB Scheme. The goods were stuffed after examination by the customs at ICD Hyderabad for export to UAE via Nhava Sheva port. The DRI Officers intercepted two consignments of cargo in two containers cleared through Hyderabad ICD for detailed examination including the above consignment, which was lying at Nhava Sheva docks for shipment to UAE. On examination, it was found that the material was not Naproxen. The goods were seized under the Customs Act. A detailed investigation was undertaken. Several persons were involved in the fraud. It was alleged that Shri Rajiv Kumar Agarwal, the then Deputy Commissioner of Customs, ICD, Hyderabad through which the consignments in question were cleared for export appeared to have connived with one hriRajnishAgarwal who was behind the dubious act. Shri P. Srinivas, the then Superintendent of Customs, ICD, also appeared to have been involved in the fraud along with Shri Rajiv Kumar Agarwal. Consequently, Show Cause Notices were issued inter alia to S/Shri Rajiv Kumar Agarwal and P. Srinivas for imposition of penalty under Section 114 of the Customs Act, 1962. However, the Commissioner, in the impugned order, dropped the proceedings.
The Show Cause Notice has narrated the role of the respondents in the fraud. It has been alleged that Shri Rajiv Kumar Agarwal, the then Deputy Commissioner of Customs, was aware of the quality of the item being exported. He instructed the Superintendent and the Inspector for speedy clearance of the consignment on the request of Shri Rajnish Agarwal. He has not made any endorsement on the shipping bills for drawal of samples. On learning from Rajnish Agarwal about the detention of the consignment at Nhava Seva port, he made an antedated endorsement on 08.01.2001 on the shipping bill No. 78 and 84 dated 31.1.2001 directing to draw samples as if the endorsement was made at the time of assessment itself on 3.1.2001, apparently to cover his lapse. He advised the Superintendent to collect any left over samples of previous consignment and show it as if drawn from the consignment in question. He permitted Rajnish Agarwal to sign the shipping bills on 8.01.2001 as Janak Prasad Sharma as exporter to show as if the samples were drawn in his presence on 3.1.2001 itself. He also permitted Sri Rajnish Agarwal to bring and deposit samples of chalk powder for records sake on 08.01.2001 to show as if the samples were drawn on 3.1.2001 itself. With regard to Shri P. Srinivas, it is alleged that he assessed the shipping bills of M/s. Sri Pashupathi Traders on 3.1.2001 and actively connived in the cover up activity along with Shri Rajiv Kumar Agarwal.
No doubt, the above allegations are quite serious in nature. However, the Adjudicating Authority has dropped the proceedings on two grounds:-
(i) The proceedings are time barred in view of Section 155(2) of the Customs Act.
(ii) The acts of omission and Commission of the respondents have not rendered the goods liable to confiscation under the Customs Act.
Hence, they are not liable for penalty under Section 114.
Revenue contends in the grounds of appeal that Section 155 of the Customs Act would not be applicable to the adjudication proceedings on the ground that Section 155 refers to “suits, rosecutions or legal proceedings” before the Court. It has further been stated that this position has been brought out in the case of CostaoFernandesVs. the State. On going through the Coasto Fernandes decision, the Tribunal did not find in that decision anywhere holding that Section 155 of the Customs act would not be applicable to the adjudication proceedings against the Customs Officers. Section 155 reads as,
“155. Protection of action taken under this Act. (1) No suit, prosecution or other legal proceeding shall lie against the Central Government or any officer of the Government or a local authority for anything which is done, or intended to be done in good faith, in pursuance of this Act or the rules or regulations.
(2) No proceeding other than a suit shall be commenced against the Central Government or any officer of the Government or a local authority for anything purporting to be done in pursuance of this Act without giving the Central Government or such officer a month’s previous notice in writing of the intended proceeding and of the cause thereof, or after the expiration of three months from the accrual of such cause.”
The Tribunal observed,
1.The protection under the above section is applicable to all legal proceedings.
2. Further, if protection to officers against proceedings in courts can be given, there is no reason why such a protection cannot be given to proceedings before quasi-judicial authorities.
3. Protection under section 155 of the Customs Act is available even in respect of adjudication proceedings.
4.Therefore, the Commissioner was correct in holding that the protection under the Act is available to the respondents.
5.However, in terms of Section 155(2), in order to initiate any proceedings, the time limit indicated therein should be adhered to.
6. In the present case, it is on record that the proceedings have not been initiated within the time limit.
Therefore, without going into the merits of the case and also the alleged connivance of the respondents, the Tribunal held that the Commissioner was legally correct in dropping the proceedings on the grounds of limitation prescribed in Section 155(2) of the Customs Act, 1962. Hence, the Revenue’s appeals have no merits and the same are rejected