Commissioner of Customs vs Bharatkumar Bakorbhai Parmar

K.A. Puj, J.—The Commissioner of Customs, Ahmedabad has filed these three Tax Appeals u/s 130 of the Customs Act, 1962 proposing to formulate the following substantial questions of law for the determination and consideration of this Court.

(i) Whether in the facts and circumstances of the case, the act of omission by the Respondent to follow procedure stipulated u/s 44 of the Motor Vehicles Act, 1988 read with Rule 53 of the Central Motor Vehicles Rules, 1989 and non-exercise of powers conferred u/s 45 of the Motor Vehicles Act, 1988, to refuse registration, would constitute offence of abetment making the Respondent liable for penalty u/s 114 of the Customs Act, 1962?

(ii) Whether in the facts and circumstances of the case, the findings recorded by the Tribunal about absence of proof involving the Respondent in the act of abetment is in disregard of the admissible evidences on record?

(iii) Whether in the facts and circumstances of the case, the conclusion arrived at by the Tribunal is as the consequence of the non-consideration of relevant material and admissible evidence on record?

(iv) Whether in the facts and circumstances of the case, the Order of the Tribunal allowing the appeal of the Respondent and relieving the Respondent from liability of penalty u/s 114 of the Customs Act, 1962 is tantamount to reversal of findings recorded by the Commissioner, without evidences for such reversal, and liable to quash and set aside in exercise of power u/s 130 of the Customs Act, 1962?

Since, the questions are identical in all the three appeals, the questions are reproduced from Tax Appeal No. 1977 of 2006.

It is the case of the department that M/s. Royal Trading Agency, Bombay filed Shipping Bill No. 17/91 dated, 4th March, 1991 before the Superintendent of Customs, CFS, Adalaj for export of goods, described generally �Indian Handicrafted Assembled Unit (L.M.V.) used�, no brand with specific description for four units (cars) as (1) 1961 built, (2) 1965 built, (3) 1962 built and swan shape children�s toy 1962 and requested for permission to take containers to their site for loading 4 cars to be exported to Felixstowe with customs examination to be undertaken at CFS, Adalaj. The price declared in the shipping bill was US $12,000. On information that the aforesaid motor vehicles were illegally exported, the investigation was carried out, to ascertain validity and permissibility of export of the above referred motor vehicles. In course of investigation, the Investigating Officer has recorded the statements of various persons u/s 108 of the Customs Act, 1962. Notices were thereafter issued, replies were also given and under these facts and circumstances the Commissioner of Customs, Gujarat, Ahmedabad in the capacity of the Adjudicating Authority, passed order in Original No. 50/COMMR/97, dated, 31st December, 1997 directing, inter alia, imposition of penalty of Rs. 7 lacs, Rs. 9 lacs and Rs. 12 lacs respectively on the Respondents of these three Tax Appeals u/s 114(i) of the Customs Act, 1965.

Being dissatisfied with the imposition of Order of penalty by the Commissioner of Customs, Ahmedabad, the Respondents preferred Appeals before the Tribunal u/s 129A of the Customs Act, 1962 and has prayed for quashing and setting the Order in Original No. 50/COMMR/97, dated, 31st December, 1997 passed by the Commissioner of Customs, Ahmedabad. The Tribunal has heard the appeals filed by the Respondent with other appeals, which were filed by co-noticees. Considering the averments made by the parties and perusing the record, the Tribunal quashed and set aside the penalty imposed by the Adjudicating Authority on the Respondents. It is this order of the Tribunal which is challenged in the present Tax Appeals before this Court.

Mr. R.J.Oza, learned Standing Counsel appearing for the department has submitted that the Tribunal has committed serious error of law in allowing the appeals of the Respondents and thereby quashed and set aside the Order of penalty imposed u/s 114(i) of the Customs Act, 1962. He has further submitted that the Respondents have acted in contravention of the statutory provisions contained in the Motor Vehicle Act. He has further submitted that the Respondents have abetted the offence committed by the principal offenders under the Custom Act and willfully made wrong entries in the record and thereby they have facilitated the principal offender to export Vintage cars. He has, therefore, submitted that the penalty was rightly imposed upon the Respondents and the Tribunal, without assigning any reason has deleted the penalty imposed on the Respondents.

We have heard Mr. Oza at great length and also perused the Orders passed by the Commissioner of Custom as well as Tribunal. So far as present Respondents are concerned, Commissioner of Custom has observed that one Anilkumar H. Patel submitted that registration application contained the correct year of make and as such the department cannot say that the application contained false year of make. He also stated that the department has not brought any evidence to prove on record that the handwriting on the pages of right hand side of the duplicate R.C. Book are of his or any person under his control. As regards payment of Rs. 65,000 to him he has stated that the statement is not clear as to whether Rs. 65,000 were paid to him for preparing the R.C. Book or after the R.C. Books were prepared. So far as Respondent, Shri D.T. Mehta is concerned, the Commissioner of Custom observed that as per his statement, Shri Anilbhai had asked to inspect the vehicle and Anilbhai had accompanied him to shed where all three vehicles were lying. On being asked as to why correct details are not mentioned on the record of registration and R.C. Book, none of the Respondents could give any satisfactory reply as per the finding of the Commissioner of Custom. It is further observed that as per statement of Assistant Regional Transport Officer, he stated that no registration can be done in respect of vehicles, which are non working or which are not complied with the Motor Vehicle Act. Shri D. T. Mehta, R.T.O. Inspector, who inspected the said vehicles has admitted in his statement that he had not taken road test of the three vehicles. Shri B. B. Parmar, Junior Clerk, of R.T.O. Office stated that he had seen the three duplicate R.C. Books which were shown to him by the recording officer and were written in his own hand writings and that he signed last page of three books. He also stated that he filled the details of year and model No. in registration records as per dictation given by Shri J.P.Parikh, Head Clerk. Shri J. P. Parikh, on being asked as to why he did not ask his clerk to mention the details of cars in the registration book, he stated that he was advised by D. T. Mehta to write the work �not known� for column Nos. 3 and 10. He also stated that he advised Mr. Mehta to call for old registration books since vehicles were old, but Mr. Mehta instructed him to use work �not known�, since the Applicants have not brought old registration record. Mr. Darji admitted that xerox copies of duplicate R.C.Books were shown to him and stated that writing on the left side of the book was his hand writing and on right side was not his hand writing.

On the basis of statements of co-noticees and these three Respondents and the finding was arrived at by the Commissioner of Custom that these persons have failed to discharge their duties properly and they registered the old vehicles without calling for old documents, without taking the road test and by not making all the entries in the records of registration books. On the basis of these facts, the learned Commissioner of Customs came to be conclusion that lapses/involvement of these persons have been brought out in the forgery of three registration books. It appears that all the three Respondents, who are either Clerk, Junior Clerk or Head Clerk have acted at the behest of Shri D. T. Mehta, who is R.T.O Inspector. Since, he is the superior authority in hierarchy, they have acted as per his instructions. However, even Commissioner has not attributed any motive to these three persons and on the basis of instructions issued by Mr. D.T. Mehta they have acted. The penalty imposed on them by the Commissioner amounting to Rs. 7 lacs, Rs. 9 lacs and Rs. 12 lacs is, therefore, unjustified. The Tribunal has considered this aspect of the matter in its order and it was observed by the Tribunal that all the four Applicants including Mr. Mehta and present three Respondents are employed in the office of Regional Transport Officer, Nadiad. Mr. D.T. Mehta examined the case in question following the application for registration. In the application he has written against the column the year of manufacture �not known�. The year of the manufacturing was shown in the affidavit of owner. Shri Jagdishbhai P. Parikh, Head Clerk, said in his statement that the year of manufacture was not filled in his register and registration certificate issued was because of the advice received from Mr. D. T. Mehta. Why Mr. Mehta chose to write �not known� in the application was not satisfactorily explained nor why he could not take steps to ascertain the year of the manufacture. However, the Commissioner�s order does not indicate how this would have facilitated the smuggling of the cars. The Tribunal, therefore, observed that the duplicate registration certificate which was presented to the Custom at the time of export showed the year of manufacture to be 1960, 1961 and 1962. However, there is nothing to connect the Applicant with these years being shown. The Tribunal further observed with regard to Mr. D. T. Mehta that whether his functioning as a motor vehicle inspector was contrary to the guidelines of his department would not be relevant for the purpose of imposition of penalty u/s 114 of the Act unless it can be shown that his acts or omissions were significant and facilitated to the export. Neither of these requirements was satisfied. Since, all the three Respondents are subordinate to Mr. Mehta, they were duty bound to act as per his instruction. There is nothing on record to show that they have played any active role in facilitating an illegal export of Vintage cars. To some extent, the role of Mr. Mehta in this entire transaction is found questionable. For that purpose, we have already issued notice for final disposal in Tax Appeal No. 1975 of 2006. This being the finding of fact by the Tribunal, we are of the view that no substantial question of law arises out of the Order of the Tribunal and hence all the three Appeals are accordingly dismissed.