Customs, Excise and Gold Tribunal - Tamil Nadu
Ajay Exports And Anr. vs Collector Of Customs on 23 June, 1986
Equivalent citations: 1986ECR623(TRI.-CHENNAI), 1986(26)ELT873(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. Since a common question of law arises for interpretation in the above two appeals, they are taken together and dispose of by a common order.
2. The above appeals deal with the import of nut megs and made by the appellants herein in May 1984, the shipment of the same having taken place after 31-3-1984. The import was considered unauthorised by the Collector of Customs, Madras, under the respective impugned orders dated the 28th February, 1985 and the goods were accordingly confiscated. Since the goods have been erroneously allowed clearance by the appraising authorities of the Customs, proceedings were instituted by the Collector of Customs, Madras, by issue of a Show Cause Notice resulting in the impugned orders appealed against under which penalties of Rs. 2,50,000 and Rs. 70,000 were respectively imposed on the appellants. It is against the same, the appellants have come by way of appeal before this Tribunal.
3. Shri Habibullah Badsha, the learned counsel appearing for the appellants did not question the correctness of the view of the authority under the impugned orders that the goods imported were canalised items at the relevant time and merely confined himself to a question of law about the legality, propriety and the correctness of the impugned orders and the jurisdiction of the Collector of Customs in passing the same.
4. It was urged that the goods have been assessed under the relevant bills of entry filed by the appellants herein by the Customs Appraisers and were cleared on the basis of declaration/statement of the parties in terms of Section 17(4) of the Customs Act, 1962. Since the goods had been cleared for home consumption by the proper officer on satisfaction that they were not prohibited and that the importers had paid the import duty, the order permitting clearance is an order of adjudication by a statutory authority in exercise of a quasi judicial function and the same can only be called in question by exercise of revisional power by the Collector of Customs in terms of Section 129D of the Customs Act, 1962. Therefore, the impugned order which springs in consequence of a show cause notice issued by the Collector of Customs under Section 124 as if he was exercising powers as a original adjudicating authority is totally without jurisdiction and nonest in the eye of law. The learned counsel also placed reliance on certain rulings in support of his plea which we shall advert to at the relevant place.
5. Shri K.K. Bhatia, the learned Senior Departmental Representative submitted that in the instant case, no order of adjudication or assessment has been made by any adjudicating authority and the out-of-charge order was given by an Appraiser and the same is merely an executive or administrative act and so the question of Collector of Customs revising the same in terms of Section 129 of the Customs Act would not arise. The learned SDR further urged that an order of adjudication can be passed only by way of confiscation or imposition of penalties by the various authorities as specified in Section 122 of the Customs Act and therefore, the out-of-charge order given by an appraiser on scrutiny of the bill of entry will not come within the mischief 01 an order of adjudication.
6. We have carefully considered the submissions of the parties herein. We personally verified the bill of entry and found that it has also been countersigned by an Asstt. Collector. Therefore, the only question that arises for our determination in the appeals is as to whether the order of clearance given by the authorities below after assessment of the bill of entry is an order of adjudication under the Act and consequently the order is appealable or revisable as the case may be by aggrieved persons. Before the goods are permitted for clearance for home consumption under law, the proper officer should be satisfied that the goods entered for home consumption are not prohibited goods and that the importer has paid import duty, if any, assessed thereon and any charges payable under the Act in respect of the same and it is only after application of mind and satisfaction reached, the proper officer can make an order permitting clearance of goods for home consumption. Section 2(1) of the Act defines adjudicating authority as an authority competent to pass any order or decision (emphasis supplied) under the Act and would not include the Board, Collector (Appeals) or the Tribunal. The term "proper officer" has also been defined under the Act as under :-
"proper officer" in relation to any functions to be performed under this Act, means the officer of Customs who is assigned those functions by the Board or the Collector of Customs".
Therefore, the scope of Section 47 whereunder the proper officer exercises jurisdiction under the Act in permitting clearance of goods entered for home consumption after satisfaction that the goods are not prohibited and that' the importer has paid the import duty has to be understood in the light of the definition of the expression "adjudicating authority" and "proper officer" given under the Act. Section 122 of the Act to which a reference was made by the learned SDR refers to adjudication of confiscation and penalties. It will not be correct to contend that unless an order results either in an order of confiscation or imposition of penalties, it would cease to be an order of adjudication. When imported goods are permitted for clearance by a statutory authority in exercise of a statutory function and on application of mind and on satisfaction reached within the scope and ambit of Section 47 of the Act, such order of the authority permitting clearance is clearly an order of adjudication. It is nowhere, stated under any provisions of the Act nor can it be gathered on the conspectus of various sections of the Act that an order of adjudication should necessarily result either in confiscation or penalty. To a specific question from us, to the learned Senior Departmental Representative as to what would have been the position if an order were passed in the instant case by an Assistant Collector, the learned SDR replied that in such a case that would be an order of adjudication. Therefore, it is obvious that neither confiscation nor imposition of penalty is a determinative criterion or a condition precedent to stamp an order under law as an order of adjudication.
It is nowhere stated under the Act that it is only the Assistant Collector who is competent to pass an order of adjudication and this position is made abundantly clear by comprehensive definitions given to the word "adjudicating authority" under Section 2(1) of the Act according to which it would mean any authority competent to pass any order or decision under this Act not including the Board, Collector (Appeals) or the Tribunal. In the instant case, the bill of entry cleared for home consumption has also been countersigned by an Assistant Collector. We therefore, hold that the original order permitting clearance of the imported goods is an order in adjudication by an authority. Once this position is conceded, it is settled law that an order of adjudication passed by an authority can only be called in question by a superior authority like the Collector of Customs in exercise of the revisional powers in terms of Section 129D of the Act. It is not disputed that such exercise of the revisional powers or correctional jurisdiction by 'a superior authority like the Collector of Customs can only be by calling for the records, examining the same on grounds of legality, propriety or correctness of the same and on examination of the same, giving directions to the subordinate authorities for apply to the Collector (Appeals) for determination of the points arising out of the decision or order, as may be specified by the Collector of Customs.
7. 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 a 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.
8. 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 Anr. v. Union of India and Ors. 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, 1%2. The learned counsel for the appellants also placed reliance on the unreported judgment of the Madras High Court in Writ Petition Nos. 52%, 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.
9. Unfortunately, in the present case, instead of exercising the revisional or review powers in terms of Section 129 (d) (1) 6c (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 revieweing 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.