Alleged Abetment for Fraudulent Export of Goods: CESTAT deletes Penalty against Late Customs Inspector [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi bench has quashed a penalty order passed against a Customs Inspector against whom the charges for abetment for fraudulent export of goods were made. The officer died in February this year during the proceedings and was represented through his wife before the Tribunal.

Earlier, in 2016, a notice was issued to the appellant proposing the imposition of penalty under Section 114 (iii), 114 AA of Customs Act, 1962 for conducting the market inquiry in a manner as amounts to abeting the fraudulent export of goods by the companies of Shri Sajjan Kumar i.e. DAPL, OSAF, DI, TC etc.,resulting in incorrect availment of draw-back. Accordingly, a penalty of Rs. One lakh was imposed on the appellant after the conclusion of the proceedings.

Before the Tribunal, the appellant contendedthat the penalty has wrongly been imposed upon deceased Subhash Chand, who conducted the market survey in official discharge of his duty. It was further contended that any negligence while conducting the market survey may amount to dereliction of duties on his part, but can never be alleged as abetment for fraudulent export of goods by the companies of Shri Sajjan Kumar.

Considering the above arguments of the appellant, Judicial Member Rachna Gupta observed that the documents would show that the appellant was not diligent enough to gather relevant details during the course of inquiry and his failure to appreciate the relevant facts led to dereliction of his duties but not alleged abetment.

“To my opinion abeting is something much more than the negligence or dereliction of duties. As already discussed above, the noticed negligence on part of the appellant unless and until goes back to the stage of initiation of crime, same cannot be held to the abetment either instigation or conspiracy. The improper and amateur act of market survey in the given facts and circumstance, cannot be held as aiding Shri Sajjan Kumar to make fraudulent export of carpets,” the Tribunal said.

Relying on a catena of judicial decision, the Tribunal allowed the plea of the appellant and held that “I observe from the Show Cause Notice as also from the order under challenge that there is no allegation against the appellant about intentional aiding and active complicity. All what alleged is that the appellant conducted the market inquiry into a casual and amateur improper manner. There has been catena of judgments to show that any lapse in performance of duty by Custom Officer can at the most be considered as inefficiency which cannot lead to any charge of abetement or connivance thus attracting the penalty under Section 114 of Customs Act.”

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