Central Administrative Tribunal - Delhi
Smt. Vijai Lakshmi Sharma vs Union Of India on 25 August, 2015
Central Administrative Tribunal
Principal Bench
Reserved on : 20.05.2015
Pronounced on : 25.08.2015
OA No.3580/2013
Honble Mr. Justice Syed Rafat Alam, Chairman
Honble Dr. B. K. Sinha, Member (A)
Smt. Vijai Lakshmi Sharma
Member (CBEC) Retd.,
C-8/8799,
Vasant Kunj,
New Delhi 110 070. .... Applicant.
(By Advocate : Shri Rupesh Kumar, Shri Aditya and Shri Harpreet Singh)
Versus
Union of India
Through Secretary
Department of Revenue,
Ministry of Finance,
North Block,
New Delhi. .... Respondent.
(By Advocate : Shri Rajesh Katyal)
: O R D E R :
Dr. B. K. Sinha, Member (A) :
By means of this Original Application filed under Section 19 of the Administrative Tribunals Act, 1985, the applicant has sought the following relief(s):-
(i) Call for the records of the case, more particularly the records pertaining to the action/decision taken on the Memorandum dated 11.3.2011 issued to the applicant.
(ii) quash and set-aside the impugned Memorandum of Chargesheet dated 9.8.2012;
(iii) quash and set-aside the Orders dated 31.10.2012, appointing the Inquiry Authority and Presenting Officer and further proceedings, till date;
(iv) to grant the cost and expenses of the OA in favour of the applicant; and,
(v) to grant any other relief as deemed just and proper by this Honble Tribunal.
2. The applicant, an Indian Revenue Service Officer of 1975 Batch, superannuated from the post of Member, Central Board of Excise and Customs (CBEC) on 31.03.2011. The instant dispute has arisen from certain certificates issued to a Company M/s Sunshine Oleochem Pvt. Ltd. (M/s SOPL for short) by a Committee formed under Notification No.39/2001-CE dated 31.07.2001 of which the applicant was also a member along with others, i.e., Chief Commissioner of Central Excise, Ahmedabad and Principal Secretary, Department of Industry, Government of Gujarat.
3. It is the case of the applicant that M/s SOPL was already enjoying exemption by virtue of an order that had been passed by a predecessor committee and had duly been affirmed by the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad (CESTAT for short) as reported in 2009 (240) ELT 561 (T) (Annexure A-3, page 68 of the paper book). Ms/ SOPL had applied for benefit of exemption from payment of central excise duty under the Central Excise Act, 1944 under Notification No.39/01-CE on its manufactured products and by products viz., Toilet Soap, Fatty Acid, Fatty Acids of Hydrogenated Oil/Acid Oil, Distilled Fatty Acid, Split Palm Kernel Fatty Acid, Soya Distilled Fatty Acid, Split Palm Stearic Acid, Stearic Acid, 12-Hydroxy Stearic Acid, Glycerin, Pitch, Soap Noodles and Hyderogenated Palm Oil Refined. The aforesaid notification was issued by the Government allowing exemption from central excise duty for units which were installed in the Kutch District of Gujarat State after the issuance of the aforesaid notification. Under the terms of this notification, the Units investing more than Rs.20 crore in plant and machinery were entitled to exemption from central excise duty and additional duty on excise duty payable on value addition undertaken in manufacturing their products for a period of five years from the date of commencement of commercial production. In case of units investing less than Rs.20 crore in plant & machinery, the exemption was available for first clearances of value which is twice the value of investment for each year for a period of five years from the date of commencement of commercial production. On 29.12.2005, M/s SOPL submitted an application before the Empowered Committee for exemption in terms of benefits of Notification No.39/2001-CE dated 31.07.2001 claiming that they had commenced commercial production with effect from 29.12.2005 and further that their total project cost was expected to be Rs.72 crore, out of which, they had installed plant and machinery valued at Rs.35.65 crore. They, however, did not submit the certificate from Chartered Accountant certifying original value of plant and machinery but promised to do so at a future date. They, however, submitted a certificate dated 18.01.2006 certifying the value of investment in plant and machinery to be Rs.39,66,813/- as on 29.12.2005. They also enclosed flow chart of manufacturing process. A team of Central Excise from Rajot Commissionerate Hqrs., visited the unit on 31.01.2006 for verification after more than a month from the declared date of commencement of commercial production by the unit and one month after cut off date of the Notification. It was found during the verification that a part of plant and machinery, actually claimed to have been installed had not been installed. The Project Manager of M/s SOPL, one Shri M. G. Rane stated that the Unit was manufacturing soap from ready made soap noodles purchased from the market as their plant capable of manufacturing of soap noodles was not operational; certain machineries like splitting columns, fatty acid distillation plant and continuous soapanifaction machine were installed but were not made operational as on 31.01.2005; only a trial run of splitting column had been done and the split acid manufactured was sold in the market; certain equipment, machinery, parts of boiler and storage tanks were still under fabrication as these were received from the supplier as late as on 29.12.2005; separate values of plant and machinery installed on uninstalled duly certified by a Chartered Engineer will be furnished by them separately. On the basis of these certificates, the verification team accepted the value of investment as Rs.35,61,11,403/- and certified that a the unit was eligible for exemption subject to the satisfaction of the Empowered Committee. However, the verification team made a contradictory statement regarding the manufacturing of soap noodles. In the first part of sentence, it was stated that the machinery for manufacturing of soap noodles was installed and running and soap was being manufactured. However, in the second part of the sentence, it was mentioned that they were manufacturing soap from soap noodles purchased from the market as portion of their plant capable of manufacturing soap noodles was not yet operational. The then Commissioner of Central Excise, Rajkot, failed to notice the anomalies in the report vide his letter dated 06.03.2006 recommending grant of exemption to M/s SOPL incorporating the observations of the verification team for all such products in respect of which the exemptions have been sought. The Chief Commissioner constituted a special team consisting of officers other than those who had done the verification on 31.01.2006 to carry out further verification. This team on the very basis of this revised the report finding that in units certain machineries had not been installed while a false certificate had been furnished to this effect and also found anomaly in commencement of the date of commercial production by the unit between 29.12.2005 and 30.12.2005. In further investigation as directed by the Chief Commissioner, it was found that the plant and machinery could not have been installed as seen from the invoices, transport documents etc. and the units could not have been made operational by 31.12.2005. The Additional Commissioner in the office of Chief Commissioner issued a show cause notice dated 24.11.2006 to which M/s SOPL filed a reply on 11.12.2006 which was considered by a committee consisting of Shir Ajit Kumar, the then Chief Commissioner and Sh. D. Rajagopalan, the then Principal Secretary, Govt. of Gujarat. The committee decided that the investment in plant and machinery was more than Rs.20 crore and the plants and machinery for producing of fatty acid and toilet soap were installed and commercial production started on or before 31.12.2005 and hence M/s SOPL were entitled to exemption under Notification No.39/2001-CE dated 31.07.2001 for fatty acid and toilet soap. As a consequence of this, two certificates both dated 09.03.2007 were issued by the 1st Empowered Committee certifying the value of investment in plant and machinery amounting to Rs.34,35,89,477/- and the unit was set up and had started commercial production before 31.12.2005. Though the exemption had been granted to M/s SOPL for only two products, namely fatty acid and toilet soaps, but they applied for refund of duty paid by them on other products and by-products namely fatty acids of Hydrogenated Oil/Acid Oil, Glycerin, Pitch, Distilled Fatty Acid, Soap Noodles & 12 Hydroxy Stearic Acid during February, 2007. This claim was rejected by the jurisdictional AC of Central Excise vide its order dated 25.04.2007 on the ground that the Empowered Committee had not granted exemption for these products, against which, M/s SOPL filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) found that the exemption certificate allowing exemption to fatty acid as a generic term and various products in respect of which M/s SOPL was asking for refund of duty and, therefore, allowed refund of duty on these additional products, as mentioned above. He, however, upheld the rejection of refund claim in respect of Glycerin, Pitch & Soap Noodles as it had no jurisdiction to look into the authority and validity as well as powers of the Empowered Committee with regard to grant or rejection of exemptions. His orders were challenged before the CESTAT. On 12.02.2009, the CESTAT allowed exemption to all the products for which M/s SOPL has filed refund application as neither the date of commencement of commercial production, nor value of investment in plant and machinery was the subject of appeal. The appeal was only confined to extending benefits to additional items not specified in the exemption certificate. M/s SOPL filed a Special Civil Application No.21571/2007 in the Honble High Court of Gujarat against the decision of the 1st Empowered Committee in rejecting their request for exemption to products/by products other than Fatty Acid & Toilet Soap. In the meantime, the 2nd Empowered Committee consisting of the applicant and one Shri Maheshwar Sahu, Principal Secretary, Government of Gujarat re-examined the issue and decided to await the decision of the Honble High Court in the aforesaid SCA. However, the 2nd Empowered Committee in a meeting held on 02.12.2008 decided to obtain the opinion of the Chemical Examiner, Central Revenues Control Laboratory (CRCL for short), Vadodara as to whether the plant was capable of manufacturing all the products as claimed by M/s SOPL. The CRCL visited the factory on 19th & 20th January, 2009 and submitted its report on 23.02.2009 holding that the Unit did not manufacture soap as per flowchart provided by them which indicated that the process of fatty acid hydrogenation, distillation and sopanification had not been initiated; Soap noodles were not manufactured in July 2006 and production of Stearic Acid had started in May, 2006; Distilled fatty acids & 12 hydoxy-stearic acid were not manufactured by 31.12.2005; the boiler was not operational till 29.04.2006; the Gujarat Pollution Control Board gave permission for starting production on 29.04.2006; the soap finishing & packing section machinery was installed and operational on 31.12.2005 and the Fatty Acid, Glycerine, Polyamides, Glycerol Mono Stearate, Stearic Acid & Soap Noodles could not be manufactured. The applicant had joined as Chief Commissioner, Central Excise, Ahmedabad in September, 2007.
4. In its meeting on 26.02.2009, the 2nd Empowered Committee noted that the M/s SOPL had withdrawn the case pending before the Honble High Court of Gujarat and, therefore, allowed exemption on all remaining products which had been disallowed by the 1st Empowered Committee as signed on 17.03.2009. It noted inter alia amongst the ground that there is no dispute about the production of toilet soap and fatty acids; it relied on the commissioning certificate given by M/s Thermax, the suppliers, on 25.12.2005 stating that the boiler was handed over to the unit for commercial use. The respondents alleged that this fact is wrong as the boiler has been supplied by one M/s Cether Vessels, Trichy who have admitted that it had been commissioned in February 2006. The 2nd Empowered Committee further held that M/s SOPL vide their letter dated 19.06.2007 intimated that the machinery installed prior to 31.12.2005 was capable of manufacturing all the products enumerated in their original application.
5. The applicant in para 4.13 of the OA states that the decision to extend the certificate to M/s SOPL on the downstream products/by products was endorsed by the CESTAT by allowing ROM Application filed by M/s SOPL vide its order dated 05.08.2009 holding therein that merely because the disputed items were not mentioned in the certificate of the Committee, the same could not be a ground for denial of benefit of the aforesaid notification.
6. It is further contended by the applicant that in April, 2009, she had relinquished the office of Chief Commissioner, Central Excise, Ahmedabad and was no longer in any committee constituted under the Notification No.39/2001-CE after this date.
7. In para 4.15 of the OA, she has further submitted that she remained on the post of Chief Commissioner of Central Excise & Customs, Ahmedabad from April, 2009 till August, 2009 when she had been transferred to the post of Director General, Directorate of Revenue Intelligence (DG, DRI) w.e.f. September, 2009 which is a highly sensitive post requiring clearances from almost all the intelligence agencies as well as the Vigilance Wing of the Department of Revenue. In March, 2010, the applicant was elevated as Member (Service Tax) in the Central Board of Excise & Customs but continued with the additional charge of DG, DRI till her superannuation in March 2011. It is the claim of the applicant that for the next two years, she had not heard anything from the respondents. It was in the month of March, 2011, when she was on the verge of superannuation, that a charge memo dated 11.03.2011 was served on her seeking explanation on the issue relating to issuance of exemption certificate to M/s SOPL in her capacity as the then Chief Commissioner of Central Excise, Ahmedabad (Annexure A-9, pages 89 to 106 of the paper book). It was mentioned in the communication dated 11.03.2011 that she had to submit her explanation. The report running into 90 -106 pages along with its enclosures had been enclosed therewith and further that this is to be considered only as a preliminary fact finding exercise. The applicant submitted her reply vide communication dated 16.03.2011 (Annexure A-10, pages 107 to 119 of the OA), wherein she had submitted that she had only been a Member in the 2nd Empowered Committee and was not the lone authority to decide the issue of exemption. She further submitted that her orders were based upon the judgment of CESTAT and the proper course of action was to challenge the decision of CESTAT before the Honble Supreme Court. The said reply of the applicant as per her assertion was placed before the competent authority, i.e., the Finance Minister and a conscious decision was taken by the then Finance Minister to drop the allegations against the applicant, as being false and baseless and not to proceed with any disciplinary proceedings against her. This decision not to initiate any enquiry against the applicant was taken in the backdrop of the meticulous consideration of the reply dated 16.03.2011 and the merits of the case of the applicant.
8. The applicant claims that the decision to drop the allegations against her and not to initiate disciplinary proceedings appears to have been corroborated by the fact that the applicant superannuated on 31.03.2011 and immediately thereafter she was appointed as one of the four Members of the Committee constituted by the Finance Minister to review the role, functioning and structure of the Central Economic Intelligence Bureau (CEIB) under the changed economic scenario vide order dated 29.03.2011 (Annexure A-11 colly). It was almost one and a half year after her retirement that the applicant received the impugned communication dated 09.08.2012 indicating that it was proposed to hold an enquiry against her in accordance with the proceedings laid down under Rules 14 and 15 of the CCS (CCA) Rules, 1965 (hereinafter referred to as Rules of 1965) seeking her explanation (Annexure A-1 colly).
9. The applicant submitted her explanation, i.e., Annexure A-12 pages 123 to 125 of the OA stating therein that she was shocked after having received the communication and further stated that copies of all the documents had not been supplied to her. The applicant in para 4.24 of the OA submits that on 05.09.2012, she had received a reply from the Under Secretary to the Government of India stating that all the relied upon documents had already been supplied to her as enclosures to Memorandum dated 11.03.2011 through which she was advised to furnish her version/explanation on her alleged role in issuing exemption certificates to M/s Sunshine Oleochem Pvt. Ltd.Taluka, Gandhidham, Distt. Kutchh, Gujarat in her capacity as the then Chief Commissioner of Central Excise, Ahmedabad. These charges were identical to the one contained in Memo dated 11.03.2011. She submits that vide her communication dated 12.09.2012 (Annexure A-14) she reiterated her demand for the documents. However, the respondents proceeded to pass orders dated 31.10.2012 in gross violation of the rules of natural justice, i.e., Rules 14 (4) and 14 (5) of Rules of 1965 appointing one Dr. Balbir Singh, Additional Commissioner, Central Excise as the Presenting Officer and Shri G. C. Rai, CDI as the Inquiring Authority to inquire into the charges framed against the applicant vide order dated 31.10.2012 (Annexure A-15). The applicant protested against the aforesaid act of appointing the Presenting Officer and Inquiring Authority vide her communication dated 05.11.2012. The applicant further submits that the respondents on realising that they had committed a procedural error extended her time to file her reply vide Memo dated 09.11.2012. The applicant submits that in the meantime she had moved the concerned authority for supply of decisions by the competent authority on memo dated 11.03.2011. She received another communication dated 06.12.2012 (Annexure A-9) stating that the additional documents demanded by her are only internal notings and the correspondence with the CVC and hence have not been relied upon in framing the charges upon her.
10. The applicant has filed the rejoinder as well as written submissions. The applicant has relied upon the following grounds in support of her case which may be summarised as under:-
(i) There was no misconduct involved; she was one of the members of the 2nd Empowered Committee and no action has been taken against the other member. Moreover, the 2nd Empowered Committee had only complied with the decision of the CESTAT order dated 12.02.2009. Therefore, there is no justification in issuing the charge sheet to her.
(ii) Before issuing the charge sheet to her, the proper course of action is to challenge the decision of the CESTAT before the Honble Supreme Court which was not done.
(iii) It was the accepted position that the charge sheet served upon her had been dropped with the approval of the competent authority. Hence, the fresh proceedings cannot be initiated against the same charges, nor is there any provision in the Rules of 1965 to reopen the proceedings. In support of this, the applicant has relied upon the decision of Apex Court in Nand Kumar Verma vs. State of Jharkhand (2012) 3 SCC 580, wherein, in para 27 it was held as under:-
27. In the present case, a charge memo was issued and served on the Appellant. A reading of the charge memo does not contain any reference to the proceedings of the Standing Committee at all. It is also not found as to whether the earlier proceedings has been revived in accordance with the procedure prescribed. In fact, after receipt of the charge memo, the Appellant, in his reply statement, had brought to the notice of the enquiry officer that on the same set of charges, a notice had been issued earlier and after receipt of his explanation dated 21.12.1994, the Standing Committee, after accepting his explanation had dropped the entire proceedings and the same had been communicated to him by the Registrar General of the High Court by his letter dated 02.02.1995. In spite of his explanation in the reply statement filed, the enquiry officer has proceeded with the enquiry proceedings and after completion of the same, has submitted his report which has been accepted by the disciplinary authority. Therefore, in these circumstances, there is no justification for conducting a second enquiry on the very charges, which have been dropped earlier. Even through the principles of double jeopardy is not applicable, the law permits only disciplinary proceedings and not harassment. Allowing such practice is not in the interest of public service. In the circumstance, we cannot sustain the impugned order reverting the Appellant to the lower post. (emphasis supplied).
(iv) The decision to close the case against the applicant had never been sent to the CVC for its opinion, nor its advice had been sought for as the same was not required in view of Section 17 of the Central Vigilance Commission Act, 2003. Admittedly, the case against the applicant was not based on the report of the inquiry undertaken by some agency on a reference made by the CVC and, therefore, the Finance Minister, before taking any final decision was not bound to take the advice of the CVC in the present matter which is fully in consonance with the provisions of Section 17 (1) of the CVC Act, 2003.
(v) She further submits that the CVC manual is only a ready reference book for use by all the officers involved in vigilance administration and, therefore, it cannot be a substitute for reference to the concerned rules and orders issued by the Government.
11. The applicant in support of his case relied upon the decisions of the Apex Court in the matters of Nand Kumar Verma vs. State of Jharkhand (2012) 3 SCC 580; Chief Commercial Manager, South Central Railway, Secunderabad & Ors. V. G. Ratnam & Ors. (2007) 8 SCC 212; Shri Karamvir Singh, Assistant Engineer (Civil) vs. Union of India OA No.856 of 2008 reported in MANU/CA/0044/2009; Nagraj Shivarao Karjagi vs. Syndicate Bank, Head Office, Manipal & Anr. (1991) 3 SCC 219 and N. P. Kudva vs. Syndicate Bank, Head Office, Manipal & ors. ILR 2001 Karnataka 4254.
12. The respondents have filed their counter affidavit regarding all the averments made in the OA. The case of the respondents is that the basic charge against the applicant is that she as a Member of the 2nd Empowered Committee ignored the facts available on record that commercial production had commenced by the Unit at least 31.01.2006 and an investment of Rs.9 crores on plant and machinery was only made upto 31.12.2005 and plant and machinery valued at over Rs.25 crore were installed and set up after 31.12.2005 which was contrary to the Notification dated 31.07.2001. Instead of initiating proceedings for withdrawal/cancellation of the certificates irregularly issued by the 1st Empowered Committee which had been successfully achieved in 2010 by Shri Kishan Singh, the then Chief Commissioner, Ahmedabad, she got herself involved in the exercise to extend further exemption to remaining products namely, Palm Stearin Fatty acid, Sunflower Fatty Acid, Rice Bran Fatty Acid, Distilled Palm Kernel Fatty acid, Soap Noodles, bath Soap, Washing Soap, Glycerin, Plyamides, Glycerol Monosterate, Stearic Acid, Distilled Palm Fatty Acid by ignoring overwhelming evidence gathered by the Department for denial of exemption on all the products of M/s SOPL. She, therefore, failed to take corrective measures to safeguard government revenue and caused loss of revenue of Rs.23.79 crore upto 24.05.2010.
13. The respondents after having taken us through the process have submitted that the applicant relied upon the order of the CESTAT as the basis of the decision taken by 2nd Empowered Committee. However, the CESTAT order did not allow exemption in respect of products namely, Palm Stearin Fatty Acid, Sunflower Fatty Acid, Rice Bran Fatty Acid, Distilled Palm Kernel Fatty Acid, Soap Noodles, Bath Soap, Washing Soap, Glycerin, Polyamides, Glycerol Monosterate, Stearic acid, Distilled Palm Fatty Acid. The CBEC circular and the CESTAT order are applicable to only down-stream or similar products manufactured from the plant and machinery installed and made operational on or before 31.12.2005. The above mentioned products were not downstream products of fatty acid or soap and could not have been manufactured out of machinery installed and made operational on 31.12.2005.
14. The main issue is whether M/s SOPL was fulfilling the basic conditions prescribed in the Notification dated 31.07.2001. Learned counsel for the respondents further submitted that the order of the CESTAT dated 12.02.2009 had not gone into the question of date of commencement of commercial production and/or value of investment in plant and machinery on the date of commencement of commercial production. The CESTAT has only examined the order passed by the Commissioner (Appeal) who had held that Palm Stearin Fatty Acid, Sunflower Fatty Acid, Rice Bran Fatty Acid, Distilled Palm Kernel Fatty Acid are of the same family as that of Fatty Acids permitted under the exemption certificate dated 09.03.2007 having same tariff classification and could have been manufactured from the same machinery. The applicant, therefore, did not have any valid ground to place reliance on the CESTAT order for extending exemption to remaining products. The respondents further submitted that while the 1st Empowered Committee had already erred by ignoring overwhelming evidences for ineligibility of M/s SOPL for exemption, the error was further compounded by the applicant in 2nd Empowered Committee by extending exemption to remaining products by misinterpreting the applicability of CESTATs order. Learned counsel for the respondents submitted that it was not proper on behalf of the applicant to seek protection of the fact that no action had been taken against the other member of the 2nd Empowered Committee. He submitted that the issue had been taken up with the Government of Gujarat and the matter is under process.
15. In the third place, learned counsel for the respondents submits that provisions of the Rules of 1965 have not been contravened. Per contra, these have been followed in true letter and spirit as is evident from the OM dated 09.08.2012 vide which the applicant was asked to submit her defence within ten days. The papers further desired by her were also provided on 05.09.2012 again giving her time of ten days. The Inquiry Officer was appointed only on 31.10.2012, well after two months from the date of initiation of departmental proceedings vide order dated 09.08.2012, thereby giving ample time to the applicant to submit her defence in advance.
16. The respondents argued that the applicant had deliberately omitted to submit her explanation procrastinated so as to stall the enquiry. Yet, the matter has been examined in depth in the respondent department and it was decided to appoint the Inquiry officer with the permission of the competent authority.
17. Learned counsel for the respondents further denied that the department had ever communicated to the applicant that the proceedings were closed based on her explanation dated 16.03.2011. He has referred to para 4.6.1 of the Central Vigilance Manual which provides that final decision to close the proceedings could only have been taken after the Commissions advice in category A cases. Therefore, the memo dated 09.08.2012 can only be viewed as another stage in continuation of in the same set of charges and not, by any stretch of imagination initiation of fresh proceedings on the same set of charges.
18. When a proposal was sent to the CVC with recommendation to close the case, the CVC had not agreed and opined that the applicant had ignored certain facts which were self evident and obvious on the record and beyond the order of the CESTAT. The Commission, therefore, advised for initiation of penalty proceedings under Rule 9 of CCS (Pension) Rules, 1972. Hence, it was not correct to hold that the impugned memo dated 09.08.2012 was without jurisdiction. The decision not to initiate the enquiry had been taken on basis of incomplete facts without the sanction of the competent authority.
19. Regarding the issue of delay in initiating departmental proceedings, the respondents have submitted that the charges relate to misconduct committed by the applicant during the period 2009 while the proceedings were initiated vide order dated 09.08.2012 within less than four years. The respondents strongly submitted that the action of the applicant has led to loss in revenue to the tune of Rs.23 crores with recurring losses in tow. The respondents have also denied the allegation of malafide on the ground that there is nothing on record to support the allegations of malafide. Per contra, it is the applicant who invited the charges by exceeding the mandate of the CESTAT granted at her own without sufficient reasons as far as having failed to challenge the order of the CESTAT to revise the earlier exemption orders as was done by her successor one Kishan Singh.
20. The respondents were also asked by the Court to submit as to what has been the fate of the case initiated by her successor, the said Kishan Singh regarding reversing the exemptions granted to M/s SOPL. Learned counsel for the respondents submitted that the process is still continuing.
21. Learned counsel for the applicant in the rejoinder application submitted that the decision to close the case is irrevocable and final. The advice of the CVC is only advisory in nature and does not have binding effect upon the disciplinary authority and, therefore, once the case has been closed by the competent authority. There was no scope for issuing another charge sheet based on the same facts and the same was contrary to the rules.
22. We have carefully examined the contents of the pleadings including such documents as have been submitted and have also listened patiently to the oral submissions made by the respective counsels of the parties and on the basis thereof the following issues appear germane for decision in the instant case:-
1. Whether the decision taken on 25.03.2011 to close the case against the applicant was final and irrevocable insofar as it is concerned on the same set of charges in respect of which a charge memo has already been issued to the applicant earlier?
2. Whether the charge memo 09.08.2012 bear out no misconduct on the part of the applicant?
3. Whether the aforesaid charge memo is discriminatory as no action has been taken against the other Member who was a party to the decision allowing exemption to M/s SOPL?
4. What relief, if any, can be provided to the applicant?
23. In respect of Issue No.1, we have already considered the facts of the case and repetition of the same would unnecessarily add to the bulk of the order. In this regard, we have already examined the Note dated 23.03.2012 and thereupon the order of Finance Minister. Earlier, the then Revenue Secretary in his note dated 23.03.2011 had given the brief history of the case and also the explanation submitted by the applicant. In para-k, page 10 of the file, the Revenue Secretary summed up the case of the DG (Vigilance), which reads as under:-
(k) DG (Vigilance) has questioned the considerations on Smt. Sharmas part particularly her reliance on the CESTAT order in deciding the issue jointly with the Gujarat Government representative on the Committee. She has suggested that Smt. Sharma as the jurisdictional Chief Commissioner failed to challenge the CESTAT order and also, failed to initiate action for withdrawal/cancellation of exemption certificates issued earlier.
The Revenue Secretary has also taken note of the defence of the applicant in the following terms:-
(e) Smt. Sharma has stated that it was not within her jurisdiction to prefer appeal against the CESTAT order as a member of the Committee looking into the Companys claim for exemption. She has drawn attention to the fact that till date neither the jurisdictional Commissioner of Central Excise or higher formations, have preferred any appeal against the order either in High Court or the Supreme Court. He has given her conclusion as follows:-
4. Having gone through this case in considerable depth and recorded the salient aspects in the preceding paragraph, I am of the considered opinion that the case made out by DG (Vigilance), CBEC is baseless and unfounded. Smt. Sharma was not called upon to question the CESTAT categorical order in respect of the eligibility of by products to avail exemption, specifically in view of the CBEC clarification issued in July 2008. I would not like to comment on the allegations of personal bias imputed by Smt. Sharma against DG (Vigilance), CBEC through I must confess that am somewhat surprised at this hasty attempt to make out an unfounded case against Smt. Sharma just a few weeks before her retirement at month-end.
5. For the reasons recorded at paras 3 and 4 above, I would recommend consideration of closure of this case. FM as Disciplinary Authority, may kindly approve.
24. It appears from the perusal of the record that the matter was referred to the Secretary, CVC seeking their opinion vide their letter dated 25.03.2011, which reads as under:-
Dear Shri Ramanathan, Please refer to Central Vigilance Commissions OM No.11/CEX/023/122553, dated 21.03.2011 seeking views/comments on the complaint against Smt. Vijai Lakshmi Sharma, Member, CBEC relating to grant of exemption under Notification No.39/2001-CE dated 31.07.2001 to M/s Sunshine Oleochem Pvt. Ltd., Survey No.216/1 & 217/1, Village Mithi Rohar, Taluka Gandhidham, Distt. Kutchh in her capacity as one of the Member of Empowered Committee which granted the exemption.
2. The complaint has been examined in Revenue Headquarters vis-a-vis explanation submitted by Smt. Vijay Lakshmi Sharma. This Department has observed that the case made out by DG (Vig.), CBEC is baseless and unfounded. Therefore, it has been decided with the approval of Finance Minister to close the complaint against Smt. Vijai Lakshmi Sharma. Smt. Vijay Lakshmi Sharma is retiring on 31.03.2011.
3. A detailed report in the matter is enclosed.
25. A reply was received from the CVC vide their communication dated 21.03.2011, which reads as under:-
Sub : Complaint against Smt. Vijai Lakshmi Sharma, Member, CBEC-reg.
D/o Revenue may refer to Directorate General (Vig.) CBECs letter No.V.599/7/10 dated 03.03.2011 on the subject cited above.
2. CVO, D/o Revenue may expedite views/comments on the complaint against Smt. Vijai Laxmi Sharma, Member, CBEC for the perusal of the commission on the priority basis as Smt. Sharma is due for retirement on superannuation on 31.03.2011.
26. On 30.05.2012, we find that the 1st stage advice was received from the CVC which has been placed at page 526, which reads as follows:-
Sub : 1st stage advice in r/o Smt. Vijai Lakshmi Sharma, Member CBEC, then Chief Commissioner, Central Excise Ahmedabad-reg.
Department of Revenue may refer to Revenue Secretarys D.O. Letter No.C-13011/11/2011-Vig. Dated 25.03.2011 on the subject cited above.
2. The Commission has perused the investigation report forwarded by CVO, CBEC and views of the CVO, D/o Revenue thereon. The matter has been examined by the Commission in r/o Shri Ajit Kumar, then Chief Commissioner along with the role of Smt. Vijai Lakshmi Sharma, Member, CBEC. The View of DA and CVO, Deptt. of Revenue that the case made out by CVO, CBEC is baseless and unfounded is not tenable, in view of the fact that Smt. Sharma ignored the facts available on record that commercial production had not commenced by the unit at least till 31.01.2006 and the investment of Rs.9 crores on plant and machinery was only made upto 31.12.2005 and plant and machinery valued at over Rs.25 crore were installed and set up after 31.12.2005, which was not as per Notification No.39/2001-CE dated 31.07.2001. Instead of initiating proceedings for withdrawal/cancellation of the certificates irregularly issued by the 1st Empowered Committee, which was subsequently done in 2010 by Shri Kishan Singh, the then Chief Commissioner, she got herself involved in the exercise to extend further exemption to remaining products namely, Palm Stearin Fatty acid, Sunflower Fatty Acid, Rice Bran Fatty Acid, Distilled Palm Kernel Fatty Acid, Soap Noodles, Bath Soap, Washing Soap, Glycerin, Plyamides, Glycerol Monosterate, Stearic Acid, Distilled Palm Fatty Acid by ignoring overwhelming evidence gathered by the department for denial of exemption on all the products of M/s SOPL. Smt. Sharma thus failed to take corrective measures to safeguard government revenue and caused loss of revenue of Rs.23.79 crore upto 24.05.2010. Hence, the Commission would advise initiation of major penalty proceedings under rule 9 of CCS (Pension) Rules, 1972 against Smt. Vijai Lakshmi Sharma, Member, CBEC (Retd.).
3. Receipt of Commissions advice may be acknowledged.
27. A DO letter was sent to DG (Vig), CBEC requesting to submit the draft articles of charge in pursuance of CVCs advice dated 30.05.2012. The draft charges were finally despatched on 26.06.2012 and were examined at noting N/18-33 page 535-360 and it was recorded by the Additional Secretary, R & CVO taking note of the fact that the applicant by her action caused loss of revenue to the tune of Rs.20.27 crores up to 22.05.2010 and as such recommended as follows:-
8. As a senior Government Officer, Ms. Vijaya Lakshmi Sharma was expected to be more diligent, particularly when a categorical report of a departmental expert was before the Committee to which she was a Member at the time of decision to extend further benefits to SOPL. A normal prudence would dictate cancellation of the irregular benefits given by the first Committee (as was done by Shri Kishan Singh, the later Chief Commissioner in 2010) rather than to close eyes over undeniably categorical report of the departmental expert. At least, based on the report of the expert, she could have taken the pains to get the facts further verified to her personal satisfaction which she chose not to do. Further, relying on the orders of CESTAT does not seem to be tenable because the subject matter before CESTAT was not regarding the two essential requirements of the Kutch Notification.
9. Taking all the facts into the consideration, there seems to be no option of going back to the CVC to seek reconsideration of the 1st stage advice based on the earlier report from DoR which was sent to the CVC after seeking approval of the then FM, which is one of options proposed by the Director (HQ) in para 9 of his note at P-33/N. We do not have any additional material to seek reconsideration of the first stage advice of the CVC. In fact, on the other hand, there is an overwhelming evidence to initiate major penalty proceedings under Rule 9 of CSS (Pension) Rules 1972 against Ms. Vijaya Lakshmi Sharma, Member (Retd.), CBEC. It is, therefore, recommended to the Disciplinary Authority that a full fledged proceedings be ordered to be initiated under the Rule 9 of CSS (Pension) Rules, 1972 against M.s Vijaya Lakshmi Sharma, Member (Retd.) CBEC. Accordingly, a draft charge sheet has been got prepared through DG (Vig.), CBEC which may kindly be seen at Flag A. In case the proposal is approved, it would be advisable that we may ask CVC to appoint an enquiry officer to conduct the enquiry and make appropriate recommendations, given that Ms. Vijaya Lakshmi Sharma was a senior officer and retired as Member, CBEC. The above noting was approved by the Finance Minister on 06.08.2012 in the following terms:-
Approved.
Is action also contemplated against the previous CC Shri Ajit Kumar?
28. Thereafter, on 09.08.2012, the impugned charge sheet was issued and on 21.08.2012 taking note of the explanation of the applicant that she has misplaced the papers supplied to her on 11.03.2011, it was decided to provide these papers again to her as these were the documents which have been relied upon.
29. The CVC was also requested to nominate the officer of Customs and Central Excise Service of appropriate seniority as Presenting Officer and further an Inquiry Officer by means of another letter. On 05.09.2012, the CVC nominated one Shri G. C. Rai, the Inquiry Authority in the proceeding and on 21.09.2012, one Dr. Balbir Singh, Additional Commissioner, Central Excise, Rajkot as Presenting Officer. These officers have been appointed with the approval of the Finance Minister on 26.10.2012. In this regard, we take further note of the rules of the CVC. The Foreword Manual dated 12.01.2005 is only a ready reference book for use by all the officers involved in vigilance administration. It cannot and should not be a substitute for reference to the concerned rules and orders issued by the government. Para 4.6.1 provides as under:-
4.6.1. The decision, whether departmental action should be taken against a public servant should be taken by the authority competent to award appropriate penalty specified in the CCS (CCA) Rules or relevant Discipline and Appeal Rules. In cases, where during the course of the preliminary enquiry or before a decision is taken on the report of the preliminary enquiry, a public servant is transferred to another post, the decision should be taken by the disciplinary authority of the latter post. The Commissions advice would, however, be obtained in category A cases before the competent authority takes a final decision in the matter. In category B cases, if there persists an uresolved difference of opinion between the chief vigilance officer and the disciplinary authority concerned about the course of action to be taken, the matter would be reported by the CV to the chief executive for appropriate direction.
30. From the perusal of the above, the following facts become abundantly clear:-
1. That it is for the competent authority to take a decision against a public servant to award appropriate penalty as per the CCS Rules or the relevant discipline or appeal rules.
2. Where a public servant is transferred during the course of disciplinary enquiry, the decision should be taken by the disciplinary authority of the latter post.
3. It is mandatory to obtain advice in respect of Category A cases before the competent authority takes a final decision in the matter.
31. In the instant case, we find that the order of the competent authority was obtained on 23.03.2011 without the benefit of the CVC advice. This is clearly against the provisions of Rules 4.6.1 of the CVC Manual which provides that prior consultation in respect of Category A cases is mandatory. Therefore, as per the CVC Manual, the decision of the competent authority is de horse the CVC Manual.
32. We also notice that soon after the decision on 23.03.2012 there is a letter from CVC asking for expediting the comments on the complaint against the applicant. We also take note of the OM dated 29.11.2012 of the DOP&T which provides that to reply to the charge sheet, some time should be allowed to the charged officer and thereafter the same should be examined where a vigilance angle is involved. The circular further provides as under:-
v. After receipt of first stage advice of CVC, the case should be put to the disciplinary authority for taking decision to initiate disciplinary action for major or minor penalty against delinquent officer under CCS (CCA) Rules within one month from the date of receipt of 1st stage advice of CVC.
vi. The chargesheet should be issued to the charged officer within a week from the date of receipt of decision of the disciplinary authority to initiate major or minor penalty proceedings against him. In any case, it should be ensured that the charge sheet is issued within one month from the date of receipt of the 1st stage advice of CVC.
vii. Simultaneously with the issuance of chargesheet, names of suitable officer to be appointed as IO & PO may be selected tentatively. If the charged officer, in his written statement of defence, denies the charges levelled against him, orders regarding appointment of IO & PO should be issued immediately after receipt and consideration of defence statement. Copies of all the relevant papers/documents should also be provided to IO/PO along with the order.
viii. The charge sheet should be drafted with utmost accuracy and precision based on the facts revealed during the investigation or otherwise and the misconduct involved. It should be ensured that no relevant material is left out and at the same time no irrelevant material or witnesses are included. (DoP&Ts DO No.134/2/83-A VD.I dated 2nd May, 1985).
ix. As far as possible, copies of all the documents relied upon and the statements of witnesses cited on behalf of the Disciplinary Authority should be supplied to the Governmnet servant along with the charge sheet, so that the time taken by the charged officer to submit his written statement of defense is reduced. (DoP&Ts DO No.134/2/83-A VD.I dated 2nd May, 1985).
x. IO should submit his report within six months from the date of receipt of order of his appointment as IO. Where it is not possible to adhere to this time limit, the IO should submit reasons for delay to the disciplinary authority in writing.
33. Thus, it is clearly established from para 4 & 5 that the matter should be put up before the Disciplinary Authority for receipt of the 1st stage advice of the CVC. In the instant matter, we find that the decision was taken on 23.03.2011 whereas the CVC had given its 1st stage advice on 30.05.2012. The decision to drop the proceedings has also been referred to the CVC and the order of the CVC takes note of that decision, communicating the same to the Department of Revenue vide DO letter dated 30.05.2012. In other words, the CVC in its 1st stage advice has considered the decision of the Disciplinary Authority and has disagreed with the same. This implies that the decision of the Disciplinary Authority dated 25.03.2011 was not in tune with the OM of the DOP&T dated 29.11.2012.
34. We have also taken note of sub rule (1), (2) & (3) of Rule 14 of Rules of 1965, as to how a major penalty proceeding against an employee is to be conducted. The same reads as under:-
(1) No order imposing any of the penalties in Clauses (v) to (ix) of Rule 11 shall be made except after an inquiry held, as far as may be, in the manner provided in this Rule and Rule 15, or in the manner provided by the Public Servants (Inquiries) Act, 1850 (37 of 1850), where such inquiry is held under that Act.
(2) Whenever the Disciplinary Authority is of the opinion that there are grounds for inquiring into the truth of any imputation of misconduct or misbehaviour against a Government servant, it may itself inquire into, or appoint under this rule or under the provisions of the Public Servants (Inquiries) Act, 1850, as the case may be , an authority to inquire into the truth thereof:
[Provided that where there is a complaint of sexual harassment within the meaning of Rule 3-C of the Central Civil Services (Conduct) Rules, 1964, the Complaints Committee established in each Ministry or Department or Office for inquiring into such complaints, shall be deemed to be the Inquiring Authority appointed by the Disciplinary Authority for the purpose of these rules and the Complaints Committee shall hold, if separate procedure has not been prescribed for the Complaints Committee for holding the inquiry into the complaints of sexual harassment, the inquiry as far as practicable in accordance with the procedure laid down in these rules.] EXPLANATION 1.- Where the Disciplinary Authority itself holds the inquiry, any reference in sub-rule (7) to sub-rule (20) and in sub-rule (22) to the inquiring authority shall be construed as a reference to the Disciplinary Authority.
EXPLANATION 2.- Where the Disciplinary Authority appoints a retired Government servant as inquiring authority, any reference in sub-rule (7) to sub-rule (20) and in sub-rule (22) shall include such authority;
(3) Where it is proposed to hold an inquiry against a Government servant under this rule and Rule 15, the Disciplinary Authority shall draw up or cause to be drawn up-
(i) the substance of the imputations of misconduct or misbehaviour into definite and distinct articles of charge.
(ii) a statement of the imputations of misconduct or misbehaviour in support of each article of charge, which shall contain-
(a) A statement of all relevant facts including any admission or confession made by the Government servant;
(b) A list of documents by which, and a list of witnesses by whom, the articles of charge are proposed to be sustained.
Sub-rule 20 of Rules of 1965 further provides that:-
(20) If the Government servant to whom a copy of the articles of charge has been delivered, does not submit the written statement of defence on or before the date specified for the purpose or does not appear in person before the Inquiring Authority or otherwise fails or refuses to comply with the provisions of this rule, the Inquiring Authority may hold the inquiry ex parte.
The following things are clear from the above exposition:-
1. That the disciplinary authority must come to the conclusion that there are sufficient grounds to enquire into the misconduct or misbehaviour against a government servant.
2. The enquiry commenced by drawing up the charge memo;
3. Service of the charge memo is mandatory;
4. Where the officer charged does not submit the statement of defence on service of articles of charges, the enquiry officer has liberty to proceed ex-parte.
35. The above facts lead us to the conclusion that the decision dated 25.03.2011 was uninformed decision and was against the terms of DOP&T OM dated 29.11.2012. Therefore, it is not a valid decision. It was incumbent upon the officer to have drawn a reference to this OM. However, there is nothing in the rules to bar another decision being taken where the earlier decision is not in conformity with the rules. Therefore, the first issue is answered against the applicant.
36. Here we find that the reliance placed upon the decided case of Nand Kumar Verma (Supra) is a misplaced one where the officer was a judicial officer concerned with judicial work who was charged with granting bails indiscriminately and using intemperate language in the court. His explanation was placed before the standing committee comprising of Honble the Chief Justice and other Honble Judge of the High Court for consideration and therefore, it was not an uninformed or invalid decision(?). Drawing from this analogy in the instant case, we find the decision uninformed and against the rules. Therefore, the facts of the above said case do not apply, and this issue is decided against the applicant.
37. Further, while agreeing with the contention of the applicant that the CVC Manual is not binding upon the disciplinary authority who is bound by the relevant rules and government instructions, we take note of the argument of the learned counsel for the respondents that the decision of the disciplinary authority dated 25.03.2011 was uninformed decision against the provisions of the OM dated 29.11.2012 as inferred earlier. Therefore, the facts of the case of Chief Commercial Manager, South Central Railway, Secunderabad & Ors. (supra) are not applicable to the facts of this case. It is well accepted that the government has to issue executive orders where the rules are silent and such executive orders have the force of law. Moreover, we have further found nothing prohibiting such a consideration in the rules. Therefore, the issue is decided against the applicant.
38. Insofar as the issue no.2 that there is no misconduct on the part of the applicant is concerned, for the sake of clarity, we reproduce the charge memo, which reads as under:-
Annexure-1 STATEMENT OF ARTICLES OF CHARGE FRAMED AGAINST MS VIJAI LAKSHMI SHARMA, THEN CHIEF COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD ZONE (RETIRED AS MEMBER CBEC).
Ms. Vijai Lakshmi Sharma, while posted as the Chief Commissioner of Central Excise, Ahmedabad Zone during 2008-09, has committed gross misconduct by her acts of omission and commission in as much as appear in the following articles of charge.
Article-I :
That while posted as the Chief Commissioner of Central Excise Ahmedabad, Ms. Vijai Lakshmi Sharma was one of the two members of an Empowered Committee constituted under Notification No.39/2001-CE dated 31.7.2001, as amended, and she was responsible for granting two certificates dated 18.3.2009 to M/s Sunshine Oleochem Pvt. Ltd. (M/s SOPL) ignoring the glaring discrepancies in the verification reports relating to fulfilment of the conditions of the said Notification relating to value of investment in plant and machinery as well as the cutoff date of commercial production.
Thus Ms. Vijai Lakshmi Sharma, then Chief Commissioner in her capacity as one of the members of the 2nd Empowered Committee, was responsible for allowing the exemption to M/s DOPL for remaining products, despite glaring inconsistencies in the first verification report dated 2.3.06 submitted by the team sent from the Commissionerate Hqrs. For verification; adverse report of the Chemical Examiner and observations of DC/ADC of CC Unit that the assessee appeared to have obtained the certificates by mis-representation and suppression of facts and suggestion that a detailed investigation may be carried out. Ms. Sharma, thereby, compounded the gross misconduct of the previous committee by granting exemption to remaining products. She thereby behaved in a grossly negligent manner and failed to maintain absolute integrity, exhibited lack of devotion to duty and acted in a manner unbecoming of a govt. servant, thereby violating the provisions of Rule 3(1)(i), (ii) and (iii) of the CCS (Conduct) Rules 1964.
Article-II Based on two sets of exemption certificates, first dated 9.3.07, issued by the 1st Empowered Committee comprising of Shri Ajit Kumar, then Chief Commissioner of Central Excise Ahmedabad, as one of the Members and the second as corrigendum dated 18.3.09 by 2nd Empowered Committee comprising of Ms. Vijai Lakshmi Sharma, the then Chief Commissioner of Central Excise, Ahmedabad as one of the Members, M/s SOPL received Central Excise duty refunds amounting to Rs.23.79 crore till 24.5.10. Ms. Vijai Laxmi Sharma, in her capacity as the Chief Commissioner of Central Excise, failed to protect Govt. revenue and caused substantial revenue loss by her above act.
Thus Ms. Vijai Lakshmi Sharma, behaved in a grossly negligent manner and failed to maintain absolute integrity, exhibited lack of devotion to duty and acted in a manner unbecoming of a govt. servant, thereby violating the provisions of Rule 3(1)(i), (ii) and (iii) of the CCS (Conduct) Rules 1964.
Article-III :
Though the 1st Empowered Committee had granted exemption to M/s SOPL, only for two products namely Fatty Acid and Toilet Soaps, they applied for refund of duty paid by them on another products also, which was rejected by the jurisdictional AC vide order dated 25.4.07. However the appellate orders dated 31.8.07, 29.1.08 and 30.1.08 by the Commissioner (A) allowed benefit on few more products. M/s SOPL as well as the Department challenged the said orders before the CESTAT and the CESTAT vide order dated 12.2.09 allowed exemption on all the products for which M/s SOPL had filed refund application. Neither the date of commencement of commercial production, nor value of investment in plant and machinery was the subject of appeal and that appeal related only to extending benefit to additional items not specified in the exemption certificates. The 2nd Empowered Committee, comprising of Ms. Vijai Lakshmi, then Chief Commissioner as one of the Members, appears to have erred in issuing corrigendum granting exemption to all remaining products by wrongly interpreting CESTAT order. The CESTAT had only examined the order passed by Commissioner (A), who had held that certain products were of the same family as that of Fatty Acids permitted under the exemption certificate dated 9.3.07, having same tariff classification and could have been manufactured from the same machinery. The CESTAT order, did not allow exemption to products namely, Palm Stearin fatty Acid, Sunflower fatty Acid, Rice Bran Fatty Acid, Distilled Palm Kernel Fatty Acid, Soap noodles, Bath Soap, Washing Soap, Glycerin, Polyamides, Glycerol Monostearate, Stearic acid, Distilled Palm Fatty Acid by specifically mentioning the same. Thus the CESTAT order was applicable to only down-stream or similar products, and if manufactured from the plant and machinery installed and made operational (capable of commencing commercial production) on or before 31.12.05. Therefore, Ms. Vijai Lakshmi Sharma did not have valid grounds to place reliance on the CESTAT order for extending exemption to remaining products. These were not downstream products of Fatty Acid or Soap and the same could not have been manufactured out of machinery installed and made operational on 31.12.05. What appellate authorities had decided was classification of the products of M/s SOPL, while the main issue was whether M/s SOPL were fulfilling the basic conditions of the notification. Ms. Sharma compounded the gross misconduct of the previous committee by granting exemption to remaining products, although, there was sufficient grounds on record for not extending exemption to remaining products in spite of CESTAT order.
Thus Ms. Vijai Lakshmi Sharma, behaved in a grossly negligent manner and failed to maintain absolute integrity, exhibited lack of devotion to duty and acted in a manner unbecoming of a govt. servant, thereby violating the provisions of Rule 3(1)(i), (ii) and (iii) of the CCS (Conduct) Rules 1964.
Article-IV Ms. Sharma also failed in her duty by not initiating proceedings for withdrawl/cancellation of the certificates irregularly issued by the 1st Empowered Committee, which was subsequently done in 2010 by Shri Kishan Singh, the then Chief Commissioner. Instead, she got herself involved in the exercise to extend further exemption to remaining products by ignoring overwhelming evidences gathered by the department for denial of exemption on all the products of M/s SOPL. Ms. Sharma, therefore, appears to have grossly failed to take corrective measures to safeguard government revenue and to prevent loss to Govt. exchequer.
Ms. Vijai Lakshmi Sharma, then Chief Commissioner thereby behaved in a grossly negligent manner and failed to maintain absolute integrity, exhibited lack of devotion to duty and acted in a manner unbecoming of a Government Servant, thereby violating the provisions of Rule 3(1) (i), 3(1)(ii) and 3(1) (iii) of the CCS (Conduct) Rules 1964.
39. We find that the matter has been examined by the CVC in its 1st stage advice and by the Government, and both have found that the charges are grave in nature as the same relate to ignoring the glaring inconsistencies in the first verification report dated 02.03.2006 and the adverse report of the CESTAT dated 12.02.2009 that M/s SOPL obtained the services by misrepresentation and suppression of facts suggesting a delayed investigation and going beyond the mandate granted by the CESTAT in granting exemption in respect of items not covered by the judgment of CESTAT. The charges are obviously grave. The applicant has further been charged with failure to protect the cost of the government by not going for a revision of the order, as her successor the said Kishan Singh has done, and extending the exemption at her own. The decision of the 2nd Empowered Committee to extend the exemption orders to M/s SOPL appears to have been without any basis. Even if one of the allegations were to be proved, it would be sufficient to warrant major penalty and we are certainly in agreement with the respondents in issuing a major penalty charge sheet, considering that a loss of Rs.23 crores has been caused to the exchequer. We think that a prudent competent authority would certainly act in a way that the competent authority has acted vide its decision dated 25.03.2011. We have also held that the decision of the competent authority was against the OM and rules and, therefore, was not binding in this case.
40. Therefore, taking note of all the facts of the case, as discussed above, this court cannot construe the mistake of levelling of the charges not being covered under misconduct. In this regard, we may also refer to the Swamys Compilation of Central Civil Services Conduct Rules where it is true that the term misconduct has not been defined anywhere but Rule 3 provides a long list of what a government servant should do. For sake of clarity this section is reproduced 3. General (1) Every Government servant shall at all times-
(i) Maintain absolute integrity;
(ii) Maintain devotion to duty; and
(iii) Do nothing which is unbecoming of a Governmnet servant.
(2) (i) Every Government servant holding a supervisory post shall take all possible steps to ensure the integrity and devotion to duty of all Government servants for the time being under his control and authority;
(ii) No Government servant shall, in the performance of his official duties, or in the exercise of powers conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior;
(iii) The direction of the official superior shall ordinarily be in writing Oral direction to subordinates shall be avoided, as far as possible. Where the issue of oral direction becomes unavoidable, the official superior shall confirm it in writing immediately thereafter;
(iv) A Government servant who has received oral direction from his official superior shall seek confirmation of the same in writing as early as possible, whereupon it shall be the duty of the official superior to confirm the direction in writing. EXPLANATION I.- A Government servant who habitually fails to perform the task assigned to him within the time set for the purpose and with the quality of performance expected of him shall be deemed to be lacking in devotion to duty within the meaning of Clause (ii) of sub-rule (1).
EXPLANATION II.- Nothing in Clause (ii) of sub-rule (2) shall be construed as empowering a Government servant to evade his responsibilities by seeking instructions from, or approval of, a superior officer or authority when such instructions are not necessary under the scheme of distribution of powers and responsibilities. The provisions of these rules are so broad and the charges against the applicant are so grave that once established it would not fall in any other category other than misconduct.
41. Insofar as the third issue is concerned, the answer is very simple. We find from the perusal of the records that the Finance Minister has directed action against one Shri Ajit Kumar, the then Chief Commissioner of Central Excise & Customs, Ahmedabad and a Member of the 1st Empowered Committee, and that a request was also sent to CBEC to initiate action against him vide OM dated 21.08.2012 (page 606 of the OA). Therefore, the ground of discrimination cannot be accepted. Moreover, assuming that no action had been contemplated against the said Ajit Kumar, the applicant, in our opinion, would not have stood to derive any advantage from it, the logic being that being a subject matter specialist, she was duty bound to guide the Board as per the law and facts. We do not find any such guidance forthcoming. It is axiomatically accepted that each officer is responsible for her/his own deeds and cannot take shelter behind the misdeed of others. In any case, this part of the discussion happens to be hypothetical in view of the fact that action is under process against the said Ajit Kumar.
42. Insofar as the Issue no.4 is concerned, we take note of what we have concluded earlier. We have concluded that the earlier decision of the competent authority to close the enquiry on the basis of the reply of the applicant was uninformed decision and was contrary to the OM dated 29.11.2012. The show cause notice itself mentioned that this was not a formal charge sheet being issued but was rather only an enquiry. Thus, this order was issued after having referred to the CVC for its 1st stage advice. The respondents should not have been in such a hurry to draw the curtains upon the case. In any event no formal order had been issued regarding the closure of the case. Therefore, we have found that this decision was without force and has rightly been issued by the subsequent decision which was in due consideration of the 1st stage advice of the CVC and after having taken the matters into consideration. We have also seen that the scope of rule 3 of the Central Civil Services (Conduct) Rules is so wide and the charges levelled against the applicant are so grave that by no stretch of imagination can it be concluded that no misconduct is made out. We have further seen that there is no discrimination as the FM has directed action against the applicant and the same has been initiated. We have taken further note of the fact that the action against M/s SOPL had already been taken by reversing the notification by the successor of the applicant one Kishan Singh and the same is under process. Therefore, we find that the applicant has failed to objectively make out a case for quashing of the charge sheet which is to be undertaken only under the circumstances when the same has either been issued by the incompetent authority; does not bear out any offence; it is against some express provision of law; it is hit by malafide. This has been reiterated by this Tribunal in a number of cases viz., Manjit Singh vs. Union of India & Ors. OA No.1308/2013 decided on 05.01.2015 MANU/CA/0008/2015; Dhirendra Khare vs. Central Board of Direct Taxes OA No.1606/2014 decided on 16.01.2015 and K. V. M. Abdunnafih vs. Union of India OA No.2055/2010 decided on 24.12.2014 MANU/CA/ 0731/2014. We find that none of these points are attracted in this case and, therefore, the OA being bereft of merit is dismissed but without any costs.
(Dr. B. K. Sinha) (Syed Rafat Alam)
Member (A) Chairman
/pj/