S KARTHIKEYAN Vs. ADDITIONAL COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Heard Mr.AR.L.Sundaresan, learned Senior counsel appearing for Ms.D.Naveena, learned counsel appearing for the petitioner and Mr.A.P.Srinivas, learned Standing counsel appearing for the respondent.

(2.) The petitioner is working as a Superintendent of Central Excise and Customs at Coimbatore and he has come to adverse notice of the Department and was placed under suspension by order passed by the Commissioner of Central Excise, Coimbatore, dated 04.02.2014. Subsequently, the Suspension Review Committee had reviewed the matter and the suspension was revoked with effect from 05.11.2015 and it is stated that disciplinary proceedings have been initiated against the petitioner. In this Writ Petition, the petitioner has challenged an order-in-original, dated 29.04.2016, passed by the Additional Commissioner of Customs, Coimbatore in which a penalty of Rs.1,74,940/- has been imposed on the petitioner under Section 112A(ii) of the Customs Act and a penalty of Rs.5,50,10,690/-, under Section 104AA of the Customs Act. The allegations, which had led to the passing of the impugned order, are that M/s.Visal Lubetech Corporation, a proprietary concern owned by one R.Parivallal at Bangalore, filed two bills of entries dated 21.12.2013 and 20.01.2014 at the Inland Container Depot, Irugur, through their Customs House Agent M/s.Nippon Express (India) Pvt., Ltd., for import of certain goods declared as Carbon Black Feed Stock (CBFS), which was stuffed in four and six containers respectively. The importer claimed classification of the goods under Customs Tariff No.28030090 attracting rate of duty of 22.583% and self assessed the amount of duty as Rs.5,09,161/- and Rs.9,20,551/- respectively with aggregate amount of duty in respect of both the bills of entry as Rs.14,29,712/-. In order to verify the correctness of the self assessment and in accordance with the Alert Circular No.12/2013, issued by the Directorate of Revenue Intelligence, samples were drawn on 30.12.2013 and it was sent for testing to the Central Revenue Control Laboratory. The sample was returned by the Central Laboratory on the ground that it was not sealed properly.

(3.) It was further stated that the Assistant Commissioner of Customs, ICD, Irugur, who was present at the time of drawl of sample on 30.12.2012, is said to have noticed that the colour and viscosity of the sample returned by the Central Laboratory was different from the original sample, he had seen at the time of drawl of sample. Suspecting tampering the said officer had conducted enquiries with all the officers and gathered information and brought the matter to the notice of the Commissioner of Customs, Central Excise, Coimbatore by letter dated 25.01.2014, who in turn ordered the case to be investigated by the Customs Intelligent Unit, (CIU), who had recorded statements of all the concerned individuals under Section 108 of the Customs Act. The petitioner, who was working as Superintendent, had given a statement on 25.01.2014, stating that he was present during the drawl of sample on 30.12.2013 and that the importer might have replaced the sample drawn with pre-filled cans at the point of drawl. However, he denied having helped the importer in substitution of the sample. A second statement was recorded from the petitioner on 27.01.2014, wherein he stated to have admitted that he had received the pre-filled samples from the importer's son and he had handed over the original samples taken from the containers to the importer's son and substituted samples were handed over to the Inspector, ICD, Irugur. Further, in the statement, the petitioner is said to have stated that he was informed that the goods imported are inferior variety of CBSF and that is why necessity was there for replacement of the sample. Subsequently, sample was taken and properly sealed and sent to the Central Laboratory, who had certified that the samples were "base oil" vide report dated 01.06.2014. For the purpose of this case, it may not be necessary to refer to the other facts pertaining to the importer, which has been set out both in the show cause notice as well as in the impugned order-in-original and suffice to state that while issuing the show cause notice, the respondent stated that the petitioner admitted in his statement dated 27.01.2014, to having facilitated the substitution of the sample, despite being told by the importer that the import cargo was of the inferior quality, therefore, he had abetted the commission of offence punishable with penalty under Sections 112, 114AA of the Customs Act and opportunity was granted to the petitioner to submit his reply. The petitioner submitted a letter to the respondent, dated 23.10.2015, enclosing a letter addressed to the Chief Commissioner, Coimbatore, dated 22.09.2015, requesting the same to be treated as an interim reply. The reply given by the petitioner has been referred to in paragraph 35 of the impugned order. Essentially, the petitioner states that he was not at fault, statements recorded from the him were under threat and coercion and second statement was recorded from him cannot be relied on. Subsequently, personal hearing was granted in which the petitioner appeared through a consultant and made written submission, which has been referred to in the impugned order from paragraph 39 onwards. In paragraphs 65 and 66 of the impugned order, the respondent, while adjudicating the show cause notice, has considered the petitioner's submissions and recorded a finding that defence raised by the petitioner lacks credibility and the petitioner was held to be guilty of abetting the commission of the offence under Section 112 of the Customs Act. Ultimately, the impugned order, dated 29.04.2016, has been passed, wherein sofar as the petitioner is concerned, a penalty of Rs.1,74,940/- has been imposed under Section 112(a)(ii) and a penalty of Rs.5,50,10,690/- under Section 114AA of the Act.