DEEPAK M GANEYAN vs REVENUE

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OA.No.170/00662/2024/CAT/BANGALORE


CENTRAL ADMINISTRATIVE TRIBUNAL

BANGALORE BENCH, BENGALURU


ORIGINAL APPLICATION NO.170/00662/2024


ORDER RESERVED ON 18.08.2026

DATE OF ORDER: 03.09.2026


CORAM:

HON’BLE MRS. JUSTICE S. SUJATHA, MEMBER (J)

HON’BLE DR. SANJIV KUMAR, MEMBER (A)


Deepak M. Ganeyan
S/o M.N. Ganeyan
Aged 59 years, retired as
Superintendent of Central Tax
Residing at No. 109/1231
rd nd
23 Cross, 2 Block, Rajajinagar
Bengaluru 560 010 .... Applicant

(By Shri A.R. Holla, Advocate – through video conference)


Vs.


1. Union of India
By Secretary
Ministry of Finance
Department of Revenue
North Block, New Delhi 110 001

2. The Chairman
Central Board of Indirect Taxes and
Customs, North Block,
New Delhi 110 001

3. The Principal Chief Commissioner of Central Tax
Bengaluru Zone
C.R. Building, Queen’s Road
Bengaluru 560 001
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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4. The Commissioner of Central Tax
Bangalore North Commissionerate
No. 59, HMT Bhavan, Ground Floor
Bellary Road, Bengaluru 560 032 …Respondents

(By Shri Vishnu Bhat, Senior Panel Counsel)

O R D E R

PER: JUSTICE S. SUJATHA, MEMBER (J)


This application is filed by the applicant under Section 19
of the Administrative Tribunals Act, 1985 seeking the following
reliefs:
“(a) To quash the order C. No. II/24/06/2017 Accts B-
North 3861/2023 dated 05.12.2023 issued by the
respondent no. 4, Annexure A4 and extend the
consequential benefits to the applicant accordingly and

(b) Grant such other relief deemed fit, having regard to
the facts and circumstances of the case.”



2. Facts in brief are that the applicant was appointed as
Inspector of Central Excise on 21.09.1990 and he was promoted as
Superintendent of Central Excise with effect from 21.09.2002. The
applicant claims that he became eligible for grant of higher Grade
Pay of Rs. 5400/- on non-functional basis in Pay Band 2 with effect
from 21.09.2006, but the same was extended to him with effect
from 21.04.2008. On re-examination in the light of the extant
instructions in this regard, the Respondent No. 4 issued an order
dated 14.02.2019 withdrawing the higher Grade Pay of Rs. 5400/-
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


from the date it was given to him and further ordered that the pay
and allowances drawn and paid consequent to the grant of Grade
Pay of Rs. 5400/- be recovered. On the challenge made by the
applicant to the order of withdrawal of Non-Functional Grade
(NFG) granted to him in the Grade Pay of Rs. 5400/- in OA No.
572/2020, this Tribunal by an order dated 27.09.2023 disposed of
the same directing the applicant to consider the Office Order dated
14.02.2019 as the show cause notice and reply to the same within
four weeks from the date of receipt of the certified copy of the
order and if such reply is filed, the same shall be considered by the
Respondent No. 4 and an appropriate decision shall be taken in
accordance with law by passing a reasoned and speaking order in
an expedite manner within a timeframe fixed. Pursuant to which,
the applicant submitted his reply to the Office Order dated
14.02.2019 in terms of his representation dated 03.11.2023.
However, the Respondent No. 4 rejected the plea of the applicant
justifying the action of withdrawal of Non-Functional Upgradation
granted to the applicant with effect from 21.04.2008 and ordered
for recovery of excess paid drawn. Being aggrieved, the applicant
has preferred this OA.

Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


3. Learned counsel Shri A.R. Holla representing the
applicant submitted that the applicant is entitled to the NFG benefit
of Grade Pay of Rs. 5400/- in Pay Band 2 with effect from
21.09.2006 as per the relevant rules. There is no rule or official
instruction, which regulates the payment of NFG based on vigilance
clearance and the competent authority has granted the said benefit
to the applicant which is in accordance with law. The said benefit is
not liable to be withdrawn after a period of more than 10 years. The
applicant has been retired on 23.08.2019 under Rule 56 of
Fundamental Rules (FR). Reliance is placed on the judgment of the
Hon’ble Apex Court in the case of State of Punjab & Ors vs.
Rafiq Masih (White Washer) and Ors. , reported in (2015) 4 SCC
334.

4. Detailed reply statement has been filed on behalf of the
respondents. Learned counsel Shri Vishnu Bhat representing the
respondents submitted that as per Government of India, Department
of Expenditure’s resolution dated 29.08.2008 notifying
th
recommendations of the 6 CPC and subsequent clarification by the
CBIC vide F. No. 26017/98/2008/Ad. IIA dated 21.11.2008, Group
‘B’ officers, on completion of four years of service in the pay scale
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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of Rs. 7500-250-12000/- (pre-revised) were granted Grade Pay of
Rs. 5400/- in Pay Band-2 on non-functional basis. Accordingly, as
the applicant was placed in the higher scale of Rs. 7500-250-
12000/- with effect from 21.04.2004, he was granted Non-
Functional Upgradation with effect from 21.04.2008 on completion
of four years in the scale and was placed in the Grade Pay of Rs.
5400/- in Pay Band-2 vide order dated 04.03.2009. Subsequently,
Board vide letter dated 16.09.2009 clarified that Non-Functional
Upgradation may be granted retrospectively with effect from
01.01.2006 on completion of four years of regular service in the
grade of Superintendent, irrespective of the pay scale attached to
the post, provided the individual is clear from vigilance angle. On
scrutiny of service book of the applicant for the purpose of grant of
financial upgradation under MACP scheme during the year 2018, it
was observed that the pay fixation on grant of Non-Functional
Upgradation to the Grade Pay of Rs. 5400/- was effected from
21.04.2008, whereas he was due to the said Non-Functional
Upgradation with effect from 23.09.2006. Hence, the date of grant
of Non-Functional Upgradation was re-examined in the light of the
extant instructions in this regard. During the process of obtaining
vigilance clearance for grant of Non-Functional Upgradation, it was
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


informed that the Charge Memorandum dated 20.01.2006 was
issued to the applicant which culminated in the penalty order of
removal from service, confirmed by the Appellate Authority.

5. On the challenge made before this Tribunal in OA No.
455/2013, this Tribunal vide order dated 25.07.2014 quashed both
the orders of the Disciplinary Authority and the Appellate
Authority and remitted the matter back to the Disciplinary
Authority. In pursuance to the order of this Tribunal, the inquiry
proceedings were initiated and the disciplinary proceedings not yet
being completed, the applicant was not free from vigilance angle
with effect from 20.01.2006 onwards till date. Accordingly, the
Non-Functional Grade Pay of Rs. 5400/- in Pay Band 2 granted to
the applicant with effect from 21.04.2008 was withdrawn vide
order dated 14.02.2019, with orders for recovery of excess pay
drawn. Further, the applicant was compulsorily retired on
23.08.2019 under Rule 56(j) of the Fundamental Rules/Rule 48 of
the CCS (Pension) Rules, 1972 vide order dated 23.08.2019. Thus,
supporting the impugned order, learned counsel seeks for dismissal
of the OA.

Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


6. We have carefully considered the submissions of the
learned counsel for the parties and perused the material on record.

7. The sole point that arises for our consideration is,
whether withdrawal of NFU benefit in the Grade Pay of Rs. 5400/-
granted to the applicant with effect from 21.04.2008, further
ordering for recovery of excess pay drawn is justifiable?

8. Board's clarification issued vide letter dated 16.09.2009
provides thus:
“3. It is now clarified that the grant of the higher grade pay
of Rs. 5400 in PB-2 on non functional basis is not linked to
vacancy and may be given retrospectively w.e.f. 1/1/2006
provided the officer concerned has,

(i) completed minimum 4 years of regular service as
on 1/1/2006 as Customs Appraiser/Superintendent of
Central Excise/Superintendent of Customs (P)
irrespective of the pay scale attached to the post, and

(ii) is clear from vigilance angle.”

Thus, an officer who has completed minimum four years of regular
service as on 01.01.2006 as Customs Appraiser/Superintendent of
Central Excise/ Superintendent of Customs (P) irrespective of the
pay scale attached to the post and is clear from the vigilance angle
is entitled to the grant of the higher Grade Pay of Rs. 5400/- in Pay
Band 2 on non-functional basis retrospectively with effect from
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


01.01.2006. The second condition categorically specifies about the
clearance from vigilance angle.

9. In OA No. 455/2013 (DD: 25.07.2014), this Tribunal
quashing the order of the Disciplinary Authority and the Appellate
Authority remanded the matter to the Disciplinary Authority to take
a fresh decision directing the Disciplinary Authority to reinstate the
applicant. The charge memo was not quashed and the disciplinary
proceedings were alive. The relevant paragraphs of the said order
are extracted hereunder for ready reference:
“18. For the foregiving reasons, we are of the considered
view, the impugned orders suffer for non examination of Shri
Abdul Kader and Shri Y. Raju and non supply of the documents.
nd
The 2 stage advice was not supplied by the Disciplinary
Authority, the decision of the Disciplinary Authority is liable to
be quashed, consequently, the order of the Appellate Authority
is liable to be quashed and both orders are quashed.
Accordingly, the issue framed above decided as affirmative.
The matter is remitted to the Disciplinary Authority to take
decision as observed above. The respondents have not justified
to support the impugned orders.


nd
19. With regard to the 2 relief for reinstatement of the
applicant into service, since we quash the order of the
Disciplinary Authority, the applicant is entitled for
reinstatement. Accordingly, the Disciplinary Authority is
directed to reinstate the applicant and to take decision the
period from date of dismissal to the date of reinstatement, in
accordance with Rules as observed in the earlier para.


20. The OA is allowed in part. No order as to costs.”


Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


10. In the light of the aforesaid order, the arguments of the
learned counsel for the applicant that there is no disciplinary
proceeding pending against the applicant subsequent to the
quashing of the penalty orders by order dated 25.07.2014 in OA
No. 455/2013 deserves to be negated.

11. In OA No. 1030/2016, the applicant had challenged
initiation of fresh proceedings against the applicant on 02.11.2016
by the Commissioner of Central Tax, Respondent No. 3 therein
under Rule 14 of CCS (CCA) Rules, 1965. The said application
was dismissed by this Tribunal vide order dated 09.11.2017 and the
respondents were permitted to re-examine two witnesses namely
Shri Abdul Khader and Shri Y. Raju. Review Application filed
against the said order came to be dismissed vide order dated
16.11.2017 holding that the Disciplinary Authority may give a
finding on the charge based on the statements of witnesses given
under Section 108 of the Customs Act, 1962, though they were not
subjected to cross examination. This order was challenged by the
applicant in Writ Petition No. 54194/2017 before the Hon’ble High
Court of Karnataka which came to be dismissed vide order dated
26.03.2018. Pursuant to which, compulsory retirement order has
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


been passed by the Disciplinary Authority vide order dated
23.08.2019 under Rule 56 (j) of FR/Rule 48 of CCS (Pension)
Rules, 1972. This order was challenged by the applicant before this
Tribunal in OA No. 514/2020 which came to be disposed of vide
order dated 17.07.2023 setting aside the order of compulsory
retirement further directing the respondents to reinstate the
applicant into service. Learned counsel for the respondents has
submitted that the said matter is now seized of by the Hon’ble High
Court in Writ Petition No. 17444/2023. Thus, while granting the
benefit of NFU to the grade of Rs. 5400/- with effect from
21.04.2008 and issuing the pay fixation order dated 04.03.2009
disciplinary proceedings against the applicant were pending.
However, having noticed the withdrawal of NFG of Rs. 5400/- and
ordering recovery sans issuing a show cause notice after a period of
about 10 years, this Tribunal in OA No. 572/2020 (DD:
27.09.2023) directed the applicant to consider the Office Order
dated 14.02.2019 as the show cause notice to give reply to the
same, which has been duly complied with, by the applicant
submitting the representation dated 03.11.2023. Considering the
same, the impugned speaking order dated 05.12.2023 has been
passed by the Respondent No. 4. Now, the ground of violation of
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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principles of natural justice would not enure to the benefit of the
applicant since opportunity has been provided to the applicant to
submit his reply/representation. Considering the grounds urged by
the applicant, point-wise findings are given by the Respondent No.
4 in the speaking order impugned herein.

12. In the light of the Board's clarification dated 16.09.2009
referred to above, vigilance clearance being mandatory, withdrawal
of the same after noticing the discrepancy cannot be faulted with.
Hence, though withdrawal of NFG benefit to the Grade Pay of Rs.
5400/- is justifiable. However, recovery of the same calls for
interference by this Tribunal in the light of the judgment of the
Hon’ble Apex Court in Rafiq Masih , supra, more particularly, with
reference to paragraph (iii) and (v) which reads thus:
“(iii) Recovery from employees, when the excess payment
has been made for a period in excess of five years, before
the order of recovery is issued.

xxxx

(v) In any other case, where the Court arrives at the
conclusion, that recovery if made from the employee, would
be iniquitous or harsh or arbitrary to such an extent, as
would far outweigh the equitable balance of the employer's
right to recover.”




Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE



13. In our considered view, the applicant has not made any
misrepresentation or played fraud. Indeed, vigilance clearance was
sought and thereafter NFG benefits were granted with effect from
21.04.2008. If the department is not clear about the mandatory
requirement of vigilance clearance or vigilance clearance was
issued in 2008 while extending NFG benefits, casting aspersions on
the applicant would not be appropriate. The onus was on the
respondents to examine the correctness of the vigilance clearance,
but no such exercise having been done, after 10 long years initiating
recovery action is arbitrary and unjust.


14. Indisputedly, excess payment has been made for a period
in excess of five years (nearly for about ten years before the order
of recovery is issued). In such circumstances, it is not uncommon
that any delayed action of recovery of the excess amount paid will
cause undue hardship to the applicant. Though the applicant's case
would not come within para 18 (i) of the judgment in Rafiq Masih
supra, being a Group ‘B’ employee, but paras 18 (iii) and (v)
certainly attracts. Such recovery is iniquitous, harsh and arbitrary to
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'

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OA.No.170/00662/2024/CAT/BANGALORE


such an extent that it will far outweigh the equitable balance of the
employer's right to recover the same. Hence, we pass the following:
: ORDER :
1) The impugned order dated 05.12.2023 issued by the
Respondent No. 4 at Annexure A4 to the extent of
upholding the order for recovery of excess pay drawn vide
order dated 14.02.2019 is set aside. In all other respects, the
said order dated 05.12.2023 remains intact.

2) OA stands allowed to the extent indicated above.
No order as to costs.

Sd/- Sd/-
( DR. SANJIV KUMAR ) ( JUSTICE S. SUJATHA )
MEMBER (A) MEMBER (J)


/ksk/
Digitally signed by
KAVYA SHREE K
Location: CAT, Bangalore
Date: 2026.09.07
17:29:01+05'30'