Central Administrative Tribunal - Madras
E T Muralidharan vs M/O Finance on 8 April, 2025
1 OA No.310/1803/2016
CENTRAL ADMINISTRATIVE TRIBUNAL
CHENNAI BENCH
OA/310/01803/2016
Dated this the 8th day of April, Two Thousand Twenty Five
CORAM :
HON'BLE MR M. SWAMINATHAN. MEMBER (J)
AND
HON'BLE MR. SANGAM NARAIN SRIVASTAVA, MEMBER(A)
E.T. Muralidharan
Superintendent of Customs & Central Excise
O/o The Commissioner of Customs
1, Williams Road, Cantonment
Trichy .. Applicant
By Advocate M/s. S. Sankaranarayanan
Vs.
1.Union of India
rep. By The Chief Commissioner of Customs (Preventive)
No.1, Williams Road, Cantonment
Trichy.
2. The Commissioner of Central Excise,
Service Tax & Customs
6/7, A.T.D. Street, Race Course Road,
Coimbatore. .. Respondents
By Advocate Mr. Su Srinivasan, SCGSC
2 OA No.310/1803/2016
ORDER
(Pronounced by Hon'ble Mr. M. Swaminathan, Judicial Member) The applicant has filed the OA seeking the quashing of the impugned punishment, which involved a reduction in pay by four stages for a period of six months, as imposed by the orders dated 27.08.2013 and 28.08.2013, and subsequently confirmed in appeal by the order dated 07.12.2015 of the Appellate Authority, along with the grant of all consequential benefits.
2. The factual matrix of the case are as follows:
The Applicant is currently serving as a Superintendent of Central Excise at the Customs Commissionerate in Trichy. While working as an Inspector of Central Excise at the Coimbatore Central Excise Commissionerate, the Applicant was issued a Charge Memo on 29.07.2010 for alleged misconduct that occurred between 2002 and 2003, approximately eight years earlier. In response, the Applicant, by letter, dated 02.08.2010, requested the relied-upon documents, as well as additional documents, to enable a timely reply to the Charge Memo. Some of the relied-upon documents were provided on 17.08.2010, well beyond the stipulated timeframe. Before the Applicant could submit his reply, the 1st Respondent initiated inquiry proceedings on 06.09.2010. The Inquiry 3 OA No.310/1803/2016 Officer submitted the report in 2013, concluding that the charges alleged in the Charge Memo were not substantiated. Despite the Inquiry Officer's findings, the Disciplinary Authority disagreed with the report. The disagreement note, along with the Inquiry Officer's report, was communicated to the Applicant by a letter, dated June 2013. The Applicant submitted a representation on 10.06.2013. Subsequently, the Disciplinary Authority passed an order on 27.08.2013, imposing a penalty of a four-
stage reduction in pay from Rs. 20,160 (Basic Pay + Grade Pay of Rs.
4,800) to Rs. 17,360 (Basic Pay + Grade Pay of Rs. 4,800) for six months, with the condition that no increments would be earned during this period.
However, upon the completion of the penalty period, the reduction would not impact future increments. As the above order unfairly denied the Applicant any increments indefinitely, it was considered legally flawed.
Therefore, a corrigendum was issued on 28.08.2013, modifying the order to clarify that the reduction of pay would not affect future increments once the punishment period expired, and the Applicant would not earn increments during the period of the reduction. The Applicant subsequently filed an appeal against the order, but the Appellate Authority dismissed the appeal by order dated 07.12.2015. In light of these circumstances, the Applicant has approached this Tribunal for the aforementioned relief.4 OA No.310/1803/2016
3. The learned counsel for the applicant submits that the department, before the Criminal Court, took the stand that the Applicant's superior officers were responsible for the loss. Notably, no FIR was filed by the CBI against the Applicant, and prosecution was initiated by the CBI against the Applicant's superior officers, asserting that they were solely responsible for the loss. However, in stark contrast, disciplinary proceedings have been initiated against the Applicant, holding him solely responsible for the loss. The Department cannot take a contradictory stance in departmental proceedings from what was asserted in the Criminal Court. The departmental action, therefore, is barred by the principle that one cannot "probate and reprobate."
4. The counsel pointed out that the fact that the Disciplinary Authority issued the same charges against the Applicant's superior officer in departmental proceedings suggests a lack of proper application of mind and supports the contention that the Applicant has been charged for the misconduct of his superior officer. The Charge Memo issued to a delinquent official should address failures related to their own assigned duties and responsibilities. In this case, however, the Applicant has been penalized for the dereliction of duties by his superior officer, which constitutes a clear miscarriage of justice. The counsel further argued that it 5 OA No.310/1803/2016 is evident that the Charge Memo was issued to the Applicant without due consideration of his actual duties, with an ulterior motive to shield the superior officer from departmental proceedings.
5. The counsel for the applicant further submitted that no action has been taken against the superior officers, Shri C. Ponnu Rajendran and S. Madhavan, Assistant Commissioners, who approved the exports and sanctioned the impugned duty drawback, or against Shri C. Rajendran, Superintendent, who investigated the case but failed to take any action. Despite evidence against them, these officers have been allowed to retire peacefully, while the Applicant has been singled out and discriminated against. Thus, the charge memo is also flawed on the grounds of discrimination.
6. The counsel pointed out that the alleged misconduct occurred in 2002-03, and notices were issued to the exporter in 2005. However, the charge memo was only issued to the Applicant in 2010, eight years later, and the proceedings continued for another three years, culminating in the Disciplinary Authority's order in 2013. Due to this prolonged delay, the Applicant was unable to produce defense witnesses or documents to support his case. Therefore, the counsel requested the relief sought in the present OA.
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7. On the other hand, the learned counsel for the respondents submitted that the issuance of the Charge Memo against the Applicant followed a preliminary investigation conducted by the CIU, Headquarters, Coimbatore, and subsequently by the CBI, which submitted its comprehensive investigation report. This report, detailing the role of each officer in the commission of the offence, was thoroughly reviewed by the Disciplinary Authority, which, after weighing the evidence, issued the Charge Memo to the Applicant. The counsel argued that no malafide intentions could be attributed to the Disciplinary Authority, asserting that the allegation of malafide has no merit.
8. The counsel further stated that the CBI investigation report, along with the related documents, was submitted by the Directorate General of Vigilance (DGV) to the Central Vigilance Commission (CVC). After reviewing the report and verifying the documents, the CVC issued its first- stage advice. Based on the detailed CBI investigation and the seriousness of the offences committed by the officers involved, the CBI recommended disciplinary action for some officers, prosecution for others, and both prosecution and departmental action for a few. In the present case, the CBI recommended only departmental action against the Applicant, and therefore, no prosecution was suggested.
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9. The counsel submitted that a Customs Examiner, the position held by the Applicant, bears significant responsibility in the examination process. They are tasked with physically inspecting and verifying goods to ensure that the declared value is accurate. This duty requires careful diligence, as incorrect valuations in exports can have serious consequences. A superficial check of quantity or a basic inspection, as claimed by the Applicant, reduces the role of the Examiner to a clerical function, which is typically performed by Airlines or Airport Authorities. The primary responsibility of a Customs Examiner extends beyond these basic checks, they must ensure that the goods match the declared description and value, especially when customs duties or export incentives, such as duty drawbacks, are involved. An Executive Officer's role is critical in preventing the overvaluation of export goods or undervaluation of import goods, which can affect revenue collection and economic stability. Had the Applicant exercised due diligence, the financial loss to the Exchequer could have been prevented.
10. The counsel further noted that the Disciplinary Authority (DA) agreed with the Inquiry Officer's (IO) finding that Charge No.1 was not proven, but disagreed with the conclusions regarding Charge No.2. The DA thoroughly reviewed the IO's report and found the IO's findings on 8 OA No.310/1803/2016 Charge No.2 unsatisfactory. In accordance with Rule 15(2) of the CCS (CCA) Rules, the DA issued a disagreement note, which was shared with the Applicant. The Applicant was given an opportunity to respond, and he submitted his reply on 10.06.2013, addressing the points of disagreement. The DA's Order dated 27.08.2013 considered the IO's findings, the disagreement note, and the Applicant's explanation. The DA concluded that the Applicant had failed to comply with the Appraising Manual, which requires both the Appraiser and the Examiner to verify the details in the shipping bill and the public notice issued by the Commissioner on 03.05.2001.
11. The counsel further submitted that, according to the prescribed duties, one of the key responsibilities of the Examining Officer is to verify whether goods are undervalued or overvalued. The records show that the Applicant allowed the clearance of highly valued goods through customs without any remarks, indicating a failure to exercise due diligence. It is well-established in disciplinary proceedings that the standard of proof is based on the preponderance of probability, rather than proof beyond a reasonable doubt, as affirmed by the Hon'ble Supreme Court in several rulings. In light of this, the evidence on record is sufficient to substantiate the charges against the Applicant, and the proceedings do not require the 9 OA No.310/1803/2016 stringent standard of proof applicable in criminal or adjudication matters under the Customs Act. Therefore, the counsel prayed for dismissal of the OA.
12. We have considered the arguments advanced by the learned counsel on both the sides, perused the pleadings and the materials placed on record. We have also gone through the written submissions of the respective parties and the case laws referred to by them.
13. The applicant was issued with a charge memo dated 29.07.2010 under Rule 14 of the CCS (CCA)Rules, 1985. The Article of the Charge reads as follows:
"That Shri E.T. Muralidharan, Inspector of Central Excise, the charged officer, while functioning as the Inspector of Customs in Air Cargo Complex (ACC), Coimbatore, during the period from 01.11.2002 to07.11.2003 attended export clearance and allowed export in respect of certain fraudulent/fictitious exporters as detailed inAnnexure III(A). The exporters had received export incentives i.e. drawback to the tune of Rs.65,14,505/- from ACC,Coimbatore by exporting low priced goods by over invoicing in a fraudulent manner and caused loss to the Government of India. Shri E.T.Muralidharan, the charged officer, by misusing his official position, had given export clearance by examining the goods in respect of Shipping Bills as detailed in Annexure A III(A) knowing fully well that the goods were over invoiced, there was no genuine purchase order fo the exports and value of the garments exported was much less than the value declared in the export documents. The charged officers had not followed the instructions contained in Public 10 OA No.310/1803/2016 Notices,Board's Circulars with regard to duties of officers and procedures to be followed in relation to export by accepting the illegal gratification in as much as he had
i)failed to draw sample for verification of the Present Market Value and description of the cargo during the examination as required by the Board's Circular No.74/2000 dated 07.09.2000;
ii)failed to notice that the name of the Bank and account number of the exporter were not mentioned by the exporter in the relevant column of the shipping bill;
iii)failed to verify that the IE codes had been furnished in the shipping bills ad also failed to verify the genuineness of the IE codes furnished;
iv) cleared less quantity of goods for export than the quantity declared in the export documents;
v) failed to bring to the notice of the higher authorities to take action under Section 113(h)(ii) of the Customs Act, 1962 for confiscation of goods on the grounds of mis-declaration of material particulars such as IE code, value, quantity, description on the contrary the goods were allowed to be cleared for export despite being aware of the fact that the expert goods were over valued to get ineligible drawback;"
14. After the Charge Memo was issued, the applicant was given the opportunity to accept or deny the charges. Following this, an Inquiry Officer and Presenting Officer were appointed, and the inquiry proceedings began. The applicant participated in these proceedings. The Inquiry Officer found that the charges under Article 1(ii) and (iii) were not proven. However, the Disciplinary Authority disagreed with this finding and issued a Disagreement Note, allowing the applicant to respond. After 11 OA No.310/1803/2016 reviewing the response and the Inquiry Officer's report, the Disciplinary Authority concluded that the applicant's defence did not negate the wrongdoings. Despite acknowledging a delay in issuing the charge memo, the authority emphasized that the fraud committed could not go unpunished due to the delay. Although the applicant was liable for a major penalty under Rule 11 of the CCS (CCA) Rules, the Disciplinary Authority, considering the applicant's denial of promotion for three years and the associated financial and emotional distress, imposed a lenient penalty: a reduction in the applicant's pay by four stages for six months, effective from 01.09.2013. The applicant appealed this decision on 07.10.2013, but the Appellate Authority upheld the Disciplinary Authority's decision, deeming it reasonable, and dismissed the appeal.
15. To bring out the true nature of the case, it is essential to present the relevant findings of the Inquiry Officer as outlined below:
"........ The Inquiry Officer after analysing the oral, documentary and assessment of evidence made the observation that "the charge of accepting illegal gratification does not stand makes me inclined to arrive at the finding that the charge that the CO had cleared less quantity of goods is not proved. As such, I conclude that sub-article (iv) of Article-I is not proved.
The ultimate charge is that the CO failed to bring to the notice of the higher authorities to take action 12 OA No.310/1803/2016 under Section 113 (h) (ii) of the Customs Act, 1962 for confiscation of goods on the grounds of mis- declaration of material particulars such as IE code, value, quantity, description, on the contrary the goods were allowed to be cleared for export despite being aware of the fact that the export goods were overvalued to get ineligible drawback. I find that the subject allegation of encompasses all the preceding allegations in addition to the charge that action to confiscate the impugned goods was not initiated by the CO. I have already arrived at the conclusion that the misdeclaration of value, quantity and description of the goods exported vide the impugned Shipping Bills are not proved by the evidences on record. I have also recorded my findings supra that the verification of the IE code particulars was not within the ambit of duties of the CO. Fairplay and justice demands that the entire issue be weighed on the basis of preponderance of probabilities and that no evidence is disregarded. In the light of the above, I find that the allegation that CO was aware of the mis-declaration of material particulars such as IE code, value, quantity and description and that he did initiate action for confiscation of the same is not substantiated by the evidences on record and hence the sub-article (v) of Article I is not proved."
In conclusion, the Inquiry Officer held that the charges framed against the charged officer (the applicant herein), vide Article I of Memorandum, dated 29.07.2010 as "Not Proved".
16. However, the Disciplinary Authority, disagreeing with the findings of the Inquiry Officer, issued a Disagreement Note. In our view, this decision is unsupported by evidence and is both erroneous and illegal. In 13 OA No.310/1803/2016 the Criminal Court, the respondents claimed that the Applicant's superior officers were responsible for the loss. Notably, the CBI did not file an FIR against the Applicant but instead initiated prosecution against his superior officers, asserting that they were solely responsible for the loss. Furthermore, they have been allowed to go unpunished despite the evidence against them and have been granted the opportunity to retire peacefully. In stark contrast, disciplinary proceedings have been initiated against the Applicant, holding him solely accountable for the loss. The Department cannot take a contradictory stance in departmental proceedings compared to what was asserted in the Criminal Court. This case highlights the failure of senior officials, including the Commissioner of Customs, to take timely and appropriate steps to prevent the loss of government revenue. Instead of addressing their own failure to discharge their supervisory duties, they issued a charge memo to the Applicant and imposed an illegal punishment. In our view, the Applicant was wrongfully punished resulting in an unjust reduction in his pay.
17. It is to be noted that the alleged misconduct occurred during the period of 2002-03, but the Charge Memo was issued to the applicant only in 2010, after a delay of approximately 8 years. The proceedings then continued for another 3 years, with the Disciplinary Authority passing the 14 OA No.310/1803/2016 impugned order on 27.08.2013. The excessive delay in initiating and concluding the disciplinary proceedings, in violation of CVC guidelines, prevented the Applicant from presenting defense witnesses or documents to effectively support his case. For these reasons, we firmly believe that the Applicant should not be singled out or discriminated against through disciplinary action.
18. In the result, we quash and set aside the impunged orders, dated 27.08.2013 and 28.08.2013 of the Disciplinary Authority as well as the Appellate Authoirty's order, dated 07.12.2015. Resultantly, the applicant is entitled to the consequential benefits and the respondents are directed to grant the same within a period of 3 months from the date of receipt of this order.
19. The OA is allowed on the above terms. In the circumstances,there shall be no order as to costs.
(SANGAM NARAIN SRIVASTAVA) (M. SWAMINATHAN)
MEMBER(A) MEMBER(J)
08. 04.2025
mas
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