Customs, Excise and Gold Tribunal - Tamil Nadu
Parkar Leather Export Co. vs Collector Of Customs on 20 August, 1986
Equivalent citations: 1987(12)ECR283(TRI.-CHENNAI), 1987(29)ELT53(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Collector of Customs, Madras dated 15.4.1986 imposing a fine of Rs. 20,000/- under Section 125 of the Customs Act, 1962, hereinafter referred to as the Act.
2. The appellant herein filed a shipping bill No. 3608 dated 29.11.85 at the Madras Customs House for export of 23 bundles containing 5560 pieces of Full Chrome Goat Suede lining finished leather valued at Rs. 1,95,867/- FOB. The exporters have furnished a declaration in the shipping bill that the goods sought to be exported were covered by Item e(2)(ii) of 15:8170/79 and entitled to be cleared duty free. Government of India, Ministry of Finance, Department of Revenue Notification No. 333-Cus. dated 2.8.1978 as amended by Notification No. 282/85-Cus., dated 30.8.1985 exempts finished leathers of goat, sheep and bovine animals and their young ones, when exported out of India from the whole of duty of customs leviable thereon under the Second Schedule to the Customs Tariff Act, 1975 w.e.f. 1.9.85 when they satisfy the standards as specified for such finished leathers by the Indian Standards Institution in IS: 8170/79. The shipping bill was assessed to 'nil' duty by the proper officer and a 'let export order' was given. Subsequently, on receipt of certain intelligence, the goods were re-examined by the authorities and on such re-examination, the authorities found that the goods sought to be exported were not finished leather goods entitled to exemption in terms of the aforesaid notification of the Finance Ministry and instituted proceedings which ultimately resulted in the present impugned order, now appealed against.
3. Shri Rajaraman, the learned consultant appearing for the appellant submitted that once the authorities, after examination of the consignment gave a 'let export order, it would amount to an order of adjudication in terms of Section 51 of the Act and the correctness of the order can only be impugned and called in question by the Collector of Customs by exercising the power of review in terms of Section 129-D(2) of the Act. In the instant case, the impugned order purporting to be an order of adjudication by the original authority once over, is not legally tenable. It was further urged that the goods in question were only finished leather and this issue itself was not free from doubt even among the authorities of the Customs who eventually had to refer the matter to" the expert opinion of Central Leather Research Institute, Madras. The learned consultant also assailed the correctness of the opinion of the CLRI dated 16.12.1985 and contended that an opportunity to cross examine the officer who analysed the sample was not given to the appellant with the result, the impugned order is vitiated in law. It was further urged that the goods in question have undergone all the seven processes specified in IS: 8170/79 and at any rate, if there is any doubt even among the Customs authorities necessitating them to re-examine the consignments and seek the opinion of an expert, a benefit would arise in the circumstances which should ensure in favour of the appellant.
4. Heard Shri K.K. Bhatia, the learned Senior Departmental Representative.
5. Since the appeal can be disposed of on a question of law, I do not feel called upon to go into various other pleas urged on behalf of the appellant. In the instant case, the admitted fact remains that the proper officer on examination of the goods in question made an order permitting clearance and loading of the goods for exportation after feeling satisfied that the goods entered for export are not prohibited goods and no duty was payable by the exporter in terms of Section 51 of the Act. The order passed by the proper officer in the exercise of the power conferred on such officer under Section 51 of the Act is an order of adjudication. Therefore, in the instant case, the 'let export order' given by the proper officer is in exercise of a quasi judicial power in adjudication by a proper officer and exercise of such power under Section 51 of the Act is an order that can be interfered with by the Collector of Customs only in terms of Section 129D(2) of the Act. In other words, the Collector of Customs may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Customs in his order.
6. In the instant case, Shri Bhatia, the learned S.D.R. conceded that no such power of review was exercised by the Collector in terms of Section 129D(2) of the Act. It was also not disputed by the learned S.D.R. that the 'let export order' originally given in favour of the appellant in respect of the goods in question was in exercise of the powers by a proper officer in terms of Section 51 of the Act. Therefore, the present impugned order which purports to be an order of adjudication is without jurisdiction and is not legally sustainable. Though no authority or case law was cited by either of the parties before me, I would like to refer to some case laws having a/bearing on this issue. This question is no longer res integra and is covered by a Bench ruling of this Tribunal to which I am a party in the case of 'M/s. Ajay Exports & Tradex India Corporation v. Collector of Customs, Madras', 1986 (26) ELT 873 (Tribunal) [C, Appeal Nos. 167 and 168 of 198-5 (MAS)] decided on 23.6'.86. Speaking for the Bench I have observed as under :
"6. In the .instant case, it is conceded and it is not controvertible that the impugned order is not one which springs into .existence out of the exercise of revisional jurisdiction by the Collector of Customs but is an order passed by the Collector of Customs as an original adjudicating authority, as it were, in consequence of a show cause notice issued under Section 124 of the Act. We, therefore, find that the impugned order is without jurisdiction and is not legally sustainable in law.
7. We are fortified in our view by the judicial pronouncements of various High Courts in regard to this issue. The Division Bench ruling of the Delhi High Court in the case of Jain Shudh Vanaspati Limited and Another v. U.O.I. and others reported in 1982 ELT 43 (Del.) and relied upon by the learned counsel for the appellants has clearly held that Section 47 of the Act, in the light of the legislative history attaches finality to the satisfaction of the officers that the goods in question are not prohibited. The finality cannot be disturbed except in a manner known to law. The Delhi High Court has further held that "an order under Section 47 is one of the orders against which a revision can lie under Section 130 of the Act as it then stood". Under the present Act, as we have observed earlier, the order under Section 47 of the Act permitting clearance can only be reviewed or revised in terms of Section 129(d) of the Customs Act, 1962. The learned counsel for the appellants also placed reliance on the unreported judgment of the Madras High Court in Writ Petition Nos. 5296, 5297, 5653 and 5654 of 1979 wherein the question arose as to the "let-export order" granted by an Assistant Collector is a statutory order which could be revised by the same authorities. It was held that an Assistant Collector giving "a let export order" cannot revise under law his own statutory order and the same can only be revised or reviewed in accordance with the provisions under the Act by a superior authority.
8. Unfortunately, in the present case, instead of exercising the revisional or review powers in terms of Section 129(d)(1) & (2) of the Act, Collector of Customs has purported to issue a show cause notice and decided the issue as if: he were an original adjudicating authority. If the Collector of Customs had exercised jurisdiction as a revisionary or reviewing authority in terms of Section 129(d) of the Act and directed his subordinate authority to file an appeal before the Collector (Appeals), it would have been a proper course but as the same has not been done in the instant case, the impugned order is without jurisdiction and is legally not sustainable. In this view of the matter, we set aside the impugned order appealed against and allow the appeals."
Even though the bench ruling of the Tribunal referred' to a case of import with reference to the scope of Section 47 of the Act, the ratio would squarely apply in interpreting the scope of Section 51 as well because while Section 47 deals with import, Section 51 deals with export and in similar circumstances, and both are covered by Chapter VII of the Customs Act, 1962. I am also fortified in the view I am presently taking by a division bench ruling of the High Court of Punjab and Haryana in the case of Oswal Woollen Mills referred, to in the case of Industrial Cables (India) Ltd. and Anr. v. Union of India and Ors., a single judge judgment, reported in 1986 (25) ELT 33 (P&H). It will be worthwhile to reproduce the extracts of the Division Bench ruling as given in the above ruling of the High Court :
"Sub-section (1) of Section 2 of the Act defines "adjudicating authority" to mean "any authority competent to pass any order or decision under this act, but does not include the Board, Collector (Appeals) or Appellate Tribunal." Sub-section (33) thereof defines "prohibited goods" to mean "any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. Sub-section 34-of Section 2 defines "proper officer" in relation to any functions to be performed under this Act to mean "the officer of Customs who is assigned those functions by the Board or the Collector of Customs." Section 17 of the Act lays down that after an importer has entered any imported goods under Section 46, or an exporter has entered any export goods under section 50, the imported goods or the exported goods, as the case may be or such part thereof as may be necessary may, without undue delay, be examined and tested by the proper officer. After such examination and testing the duty, if any, leviable on such goods, shall, save as otherwise provided in Section 85, be assessed. For the purpose of assessing duty, the proper officer may require the importer, exporter or any other person to produce any contract, broker's note, policy of insurance, catalogue or other document whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and to furnish any information required for such ascertainment, which it is in his power to produce or furnish and thereupon the importer, exporter or such other person shall produce such document and furnish such information. Section 18 of the Act makes provision for provisional assessment of duty by the proper officer, while Section 19 thereof provides for the determination of duty where goods consist of articles liable to different rates of duty. Section 47 of the Act provides that where the proper officer is, satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under the Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. Reference to the above provision of the Act leaves no manner of doubt that the clearance of the goods in the present case, which is admitted by the respondents, was under Section V7 of the Act and the order permitting the clearance of the goods by the proper officer must be presumed to be after due adjudication firstly with regard to the fact whether or not the import of the goods is prohibited by the Act or any other law for the time being in force within the meaning of Sub-sect ion (33) of Section 2 ibid and the proper officer was an "adjudicating authority" within the meaning of Sub-section (1) thereof. It is not at all necessary that some infraction of law which brings the imported goods within the fold of "prohibited goods" must be pointed out by the adjudicating authority before its ultimate order of clearance of the goods and payment of duty thereon can be cloathed with the character of an order "after due adjudication".
7. Therefore, following the ratio decidendi of the aforesaid rulings, hold that the impugned order appealed against is not sustainable in law and in this view of the matter, I set aside the same and allow the appeal.