Customs, Excise and Gold Tribunal - Bangalore
V. Lakshmipathy vs Commissioner Of Customs on 21 January, 2003
Equivalent citations: 2003(153)ELT640(TRI-BANG)
ORDER S.S. Sekhon, Member (T)
1. The appellant was working in the capacity of a Licensing Assistant, a ministerial post on whom a penalty of Rs. 50,000/- has been imposed by the impugned order on the ground that he had associated himself in the act of amending the description of the goods in the Advance Licence and had therefore abetted in the 'illegal' import indulged in by M/s. Best Fabrics. Hence this appeal.
2. The events that had taken place are set out in the form of List of dates below to enable better appreciation of the facts -
SI. No. Date Event
1. 29-1-93 M/s. Best Fabrics makes an application for issue of an advance licence. In the Annexure to the application, the item to be imported is indicated as 'cotton fabrics of all types' and item to be exported as 'cotton men's ensembles (shirts and shorts).
2. 12-2-93 M/s. Best Fabrics requests for amending the descrip-tion of the items to be imported as 'man-made fabrics of all types'.
3. 15-2-93 M/s. Best Fabrics requests for a further amendment in their application.
4. 17-2-93 The appellant puts up a note in the fileindicating that an application has been filed by M/s. Best Fabrics. In this note, the appellant specifically recommends that since M/s. Best Fabrics had requested for amendment of the input from 'cotton fabrics' to 'man-made fab-rics', M/s. Best Fabrics may be requested to produce necessary evidence in this regard. The appellant also suggests that the application could be considered after receipt of the reply from the applicant.
5. 18-2-93 The above proposal is approved by the DDGFT.
6. 26-2-93 The appellant puts up a note drawing reference to the letter dated 15-2-93 of M/s. Best Fabrics and indicat-ing that the said company had requested for amend-ment of the licence to facilitate the import of man-made fabrics. The appellant specifically indicates that S. No. 33 of the input-output norms allowed import of fabrics of 90 cm width only and that the company had requested for import of the fabrics in two kinds of width. The appellant also recommends that the case be placed before the Zonal Advance Licensing Com-mittee (ZALC).
7. 26.2.93 The DDGFT requires the appellant to put up the pre-vious file in this regard.
8. 1-3-93 As per the orders, the file is put up. *
9. 3-3-93 The DDGFT requires the matter to be placed before the ZALC.
10. 22-3-93 The Textile Commissioner sends a letter recommend-ing that for the export of 47,173 numbers of cotton men's ensembles, the consumption could be in the range of 2.62 metres per set of ensemble.
11. 10-3-93 The DDGFT places the recommendation dated 22-2-93 of the Textile Commissioner and requests the Joint Controller to approve the issue of the licence based on such recommendation and then place the same before the ZALC on 19-3-93 for ratification. No orders are passed on the request made by the company for the amendment of the input from 'cotton fabrics' to 'man-made fabrics'.
12. 22-3-93 M/s.
Best Fabrics requests for increase in CIF value consequent to the increase in the realisation rates. The company also indicates that though the approved con-sumption for the men's ensembles is 2.62 metres in 114 cm width, they require 2.06 metres of 145 cm width to have a uniform lay cutting. In the annexure to this letter, the company indicates the item to be im-ported as 'man-made fabrics' and that the earlier let-ters dated 12-2-93 and 15-2-93 are to be ignored.
13. 30-3-93 The appellant puts up the letter dated 22-3-93 of the company requesting for further amendments. The ap-pellant also suggests that the case could be placed be-fore the ZALC for a decision.
14. 30-3-93 The DDGFT reprimands the Appellant for suggesting the placing of the matter before the ZALC and indi-cates that at a time when disposal is of utmost impor-tance it was not expected of a senior dealing hand like the appellant to make such a suggestion to the officers. The DDGFT directs the Appellant to ensure that the licence is issued by 31-3-93 as requested by the com-pany.
15. 31-3-93 In simple compliance with the orders of the DDGFT, the appellant puts up a note indicating various details to be incorporated in the proforma licence. In this note, the Appellant indicates the item that can be im-ported as '(man-made) cotton fabrics'. The description of 'man-made' was indicated to comply with the or-ders of the DDGFT that the licence has to be issued as requested by the company and the indication of 'cot-ton fabrics' was done to be in line with the Textile Commissioner's recommendation.
In any case, the appellant was too junior in the hierar-chy to take any decision on the contents of the licence.
16. 16-4-93 The file is received back for typing of the licence.
17. 20-4-93 The appellant is transferred from the Advance Licence Section to the Policy Section.
18. 29-4-93 The Textile Commissioner recommends that the li-cence may read instead of "cotton fabrics of 44 inches width" as "cotton fabrics of 145 cms. width".
19. 4-5-93 The successor to the appellant refers to amendment suggested by the Textile Commissioner and requests for orders as to whether the description and the quan-tity needs to be changed in the licence that has already been typed and is on record.
20. 5-5-93 The amendment is carried out to the licence only with reference to the dimensions with no change in the de-scription.
21. 16-6-93 The DEEC certificate is issued and in the list of mate-rials to be imported the description as indicated in the proforma licence viz., '(man-made) cotton fabrics of 145 cms. width' is retained.
22. 16-11-93 The company imports man-made fabrics. The same are cleared by the Customs authorities in terms of the above-mentioned DEEC. At the time of clearance, the Customs authorities have before them the Bill of Entry that refers to the DEEC No. 079283, dated 16-4-93 and the Advance Licence issued in this regard. A mere reading of the Advance Licence in conjunction with the description of the item indicated as imported in the Bill of Entry would have revealed that the item imported was a 'Man-made fabric' whereas the item to be exported was 'cotton men's ensembles.'
23. 22-3-94 The DRI starts conducting investigations and a state-ment is recorded from Shri V. Rajapriyan, the then Controller of Imports and Exports.
24. 5-4-94 A statement of the appellant is recorded.
25. 6-4-94 A further statement of Shri V. Rajapriyan is recorded.
26. 7-4-94 The second statement of the appellant is recorded.
27. 30-8-94 A show cause notice is issued proposing to demand differential duty from the company and seeking to impose penalty, inter alia, on the appellant in terms of Section 112(a).
28. 27-9-94 The appellant submits replies to the show cause no-tice.
20-1-95
29. 4-6-96 The impugned order is passed by the Commissioner.
2. After hearing both sides and considering the material we find :
(a) The list of dates and events as presented by the appellant which are not challenged indicate that the appellant had, right from day one, been suggesting that the licences-applicant had asked for amendment of the description of the imported goods from 'cotton fabrics' to 'man-made fabrics' and that they be directed to submit various evidences in this regard. It was the appellant herein who had suggested that if the authorities approve, the case can be placed before the Zonal Advance Licensing Committee (ZALC for short) for a decision. Thereafter it was the decision of the Deputy Director General, Foreign Trade (DDGFT for short), the supervising officer of the appellant herein that licence had to be issued based on the Textile Commissioner's recommendation, before placing the case before the ZALC on 19-3-93; this decision resulted in the preparation of the licence indicating the item to be imported as 'man-made (cotton fabrics). It was therefore, the decision of the DDGFT on 30-3-93 which also accompanied a reprimand to the Appellant that resulted in the drafting of the proforma licence on 31-3-93. In any case, the licence was not issued till 20-4-93 when the Appellant was transferred from the relevant seat.
(b) There is force in appellant's plea that at his level there are no powers vested in him to, include or exclude, a particular item in a licence. The duties of the appellant is to put up files/notes to the senior officers indicating the request of the applicants. It is for the higher officers to decide whether a licence can be given and if so in what terms. There is no evidence whatsoever in the case to indicate, that the appellant herein had benefited by the so-called deliberate inclusion of the expression "man-made" in the licence.
(c) The imposition of a penalty under Section 112(a) of the Customs Act presupposes an existence of an element of mens rea. There is no evidence to indicate any such guilty mind on the part of the appellant herein. There is no evidence that the appellant herein had dealt with any manner with the goods found to be liable to confiscation. The provisions of Section 112 would apply only to persons who engage themselves in the physical act of importation of the goods. While Section 112(a) would be applicable in respect of those acts that are committed prior to the importation of the goods, the provisions of Section 112(b) would be applicable in respect of acts committed post-importation. The acts committed have to be in relation to the goods which are liable for confiscation under the provisions of Section 111. In this case, the act of the appellant, in indicating "man-made fabrics" in the licence on the application made in the DGFTs office cannot be considered to be an act to constitute that it was physically connected with the importation or preparation for import of the goods with knowledge on his part and consequently the provisions of Section 112(a) cannot be invoked against the appellant in the facts of this case.
(d) To a specific question from the Bench the learned DR fairly admitted that the Supervisory Officers in DDGFT Office have also been penalised by the Adjudicator and it is not the case of Revenue that the present appellant had resorted to any interpolations subsequent to the licence having been signed by the 'proper officer' and issued. Therefore we cannot find the penal liabilities of the Customs Act, 1962 to visit a ministerial officer of DGFT for taking a view and suggesting the same in the 'internal notings of that departmental file for a particular course to be adapted' when the supervising and proper officers have been held responsible for the very said acts.
3. In view of our findings, the appeal is allowed. The penalty is set aside with consequential relief as per law.