1. Collector of Customs, Calcutta has filed two applications in terms of the provisions of Section 129D(4) of Customs Act, 1962 to be disposed of as appeals. The said applications were presented in the Registry on 24-11-1983. Since a common issue is involved in both the applications, these are disposed of by a consolidated order.
2. The Bench had pointed out to the Ld. S.D.R. that the applications, which are being treated as appeals, have not been filed properly. In the applications in Form C.A. 5, Assistant Collector of Customs, Calcutta has been shown as appellant whereas the same should have been the Collector of Customs, Calcutta. To this query Shri M.C. Thakur, Ld.
S.D.R. has made a request that necessary permission for rectifying the defect may be granted. The learned advocates for both the respondents have no objection for granting opportunity to the appellant for rectifying the defect.
3. After hearing both the sides, necessary permission for the rectification of the defect was granted and the appellant had duly filed revised C.A. 5 form duly signed by the Collector of Customs, Calcutta.
4. On merits, Shri S. Roychowdhury, Ld. Barrister and Sr. Advocate, who has appeared on behalf of Metro Exporters Pvt. Ltd. and Shri S.D.Nankani, Ld. Advocate, who has appeared on behalf of Jayant Oil Mills Pvt. Ltd., have raised a preliminary objection that the applications on form C.A. 5 filed by the revenue in terms of the provisions of Section 129D(4) of the Customs Act, 1962 are not maintainable as the so called extracts from the impugned orders passed by the Collector of Customs, Calcutta were not orders passed by him as an adjudicating authority and the orders passed by him were the orders in his administrative capacity as Collector of Customs, Calcutta. Shri Roychowdhury, Ld. Barrister, has briefly stated the facts and has argued that the Bill of Entry was presented on 28-12-1982 and the order of clearance of the goods for home consumption was passed on 12-1-1983 under Section 47 of the Customs Act, 1962 and the assessment was completed under Section 17 of the Customs Act, 1962. Shri Roychowdhury, the Ld. Barrister has pleaded that the impugned order passed by the Collector of Customs, which is in the nature of an extract and an administrative order, was never communicated to the respondent and as such is a nullity and of no legal consequence. Shri Roychowdhury has argued that earlier the respondents had filed detailed written arguments and the same may be considered.
The written arguments filed by the respondent are reproduced below :- "---. The above appeals have been purportedly filed by the Collector of Customs, Calcutta, in terms of Order No. 104R and 105R, dated 12-10-1983 passed by Shri J. Datta, Member, Central Board of Excise and Customs purportedly under Section 129D(1) of the Customs Act, 1962. The subject matter of challenge is said to be an alleged or purported order of the Collector of Customs, Calcutta, dated 7-1-1983 contained in an office file, extract of which had been made Annexure "A" to the said order of the Board." At the commencement of the hearing of the said appeals an objection was taken on behalf of the respondents in regard to maintainability of the said appeals by way of preliminary or threshhold issue. It has been, inter alia, submitted that the Learned Tribunal being a creature of the statute - its powers, authorities or jurisdiction are circumscribed and/or have been delineated by the provisions of the statute. The Learned Tribunal has no inherent power to entertain an appeal unless such power has been specifically conferred on the Tribunal by the statute.
The Learned Tribunal derived its jurisdiction under Sub-section (4) of Section 129D to entertain an application filed by a Collector of Customs and treat the same as a regular appeal provided the following conditions precedent for exercise of jurisdiction are complied with or found to be in existence: (i) The said appeal has been filed in pursuance to an order of the Board under Sub-section (1) of Section 129D; (ii) The Board has passed the said order upon review of a 'decision of order' passed by the Collector of Customs under this Act; (iii) The said decision or order under review was passed by the Collector in a proceeding in which he acted as an adjudicating authority.
It was submitted that the alleged or purported order of the Collector dated 7-1-1983 sought to be impugned in the instant appeals is neither an 'order or decision' as contemplated under Section 129D nor has it been passed by the Collector of Customs as an adjudicating authority in any proceeding.
The documents described as extracts of the Collector's order are mere note sheets contained in the Departmental files. The 'order or decision' contemplated under Section 129D has to be formal...'order of decision' duly communicated to the parties in the manner prescribed under the Act as the same is appealable. In the instant case the respondents had never been communicated any order or decision of the Collector at any point of the time which is sought to be impugned in the instant appeal. In the premises, the notes contained in the Department's file had never matured into any judicially enforceable and legally recognised appealable order.
The order or decision liable for review by the Board must be an 'order or decision' passed by the Collector as an adjudicating authority in a proceeding and not in his administrative capacity. This is dear from the changes brought in the Revision Power of the Board by the Act No.44 of 1980 which has limited the Board's power of review only to the 'order or decision' passed by the Collector as an adjudicating authority in a proceeding. In the instant case no proceeding was ever initiated within the knowledge and/or upon due notice to the respondents for adjudicating of any legal dispute by the Collector in exercise of quasi-judicial functions nor the purported documents alleged to be his 'order or decision' was ever passed by him in any proceeding initiated by him as an adjudicating authority.
The very heading of the documents purportedly described as Order of the Collector as well as the last sentence makes it dear that the same are mere notes relating to inter-departmental communication containing instructions of the Collector to the subordinate officers and not an order or decision passed in quasi-judicial capacity as an Adjudicating Authority in a proceeding.
The factual basis of a foundation for the exercise of jurisdiction by the Board being non-est, the order dated 12-10-1983 passed by the Board is altogether a nullity and as such no proceedings can be initiated on the basis of the said void order. Reliance has been placed on the observation of Lord Denning in the Privy Council decision in the case of Macfoy-Vs-United Africa Co. Ltd. reported in (1961) 3 All E.R. 1169 in regard to the effect of a void order. His Lordship was pleased to observe that, if an act is void, then it is in law a nullity. "It is not only bad, but incurably bad. There is no need for an order of the Court to set it aside. It is automatically null and void without more ado, though it is sometimes convenient to have the court declare it to be so. And every proceeding which is found on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse" (Lord Denning at P. 1172).
The Learned Senior Departmental Representative was at this stage asked by the Learned Tribunal to explain the facts and circumstances under which the alleged or purported order dated 7-1-1983 was passed as well as amplify the true nature and character of the said order. The summary of the submissions of the Learned Senior Departmental Representative briefly is as follows: (i) The order dated 7-1 -1983 was passed by the Collector on the basic of a specific issue raised by the Assistant Collector with regard to coverage of import of the subject goods against Additional Licence. This order was an order passed under Section 47 of the Act; (a) satisfaction of the proper officer that the goods are not prohibited goods, Each one of the above is a proceeding in itself, a legal requirement under the statute. There is no procedure laid down under Section 47 with regard to exercise of power or discharge of functions.
(iii) The proper officer under Section 47 need not be only one officer. It would be more than one which would be dear from the section itself. The said Section 47 refers to 'the proper officer' and not a proper officer. Therefore, it can be read in plural.
(iv) Several activities are contemplated from the stage of receipt of the Bill of Entry till the passing an order of release under Section 47, such as determination of rate of duty under Section 15.
assessment under Section 17 etc. Each one of these functions requires application of mind and as such quasi-judicial in nature.
The functions under Section 47 are also quasi-judicial as the Collector is to construe the licence to come to a decision as to whether the goods are covered the licence.
(v) The decision of order of the Collector dated 7-1-1983 became final and was duty implemented by the sub-ordinate officers by referring to the relevant file No. In the Bill of Entry which contained the said decision or order of the Collector. The Collector made the said decision as a proper officer under Section 47 for a limited purpose.
(vi) It was further submitted that once a petition is fled under Sub-section (4) of Section 129D it is the mandatory duty of the Tribunal to hear the said petition on merits.
The Learned Senior Departmental Representative relied upon the following decision in support of his above submissions: In reply to the above submissions of the Learned Senior Departmental Representative it has been submitted on behalf of the respondents that the said submissions of the Department are legally untenable and/or liable to be rejected in limine: (i) Section 47 appears in Chapter VII which relates to "clearance of imported goods and export goods". It is not disputed that the term 'proper officer' as defined under Section 2(34) may mean different categories assigned to or performed by him, but the duty assigned and the functions to be performed under Section 4? are making an order permitting clearance for home consumption upon being satisfied that the goods are not prohibited and the importer has paid the import duty and other charges payable under the Act. This function is not and cannot be divisible. It is an well-established principle of law that when a statute enjoins any duty upon any officer to do any act or discharge any function on the basis of his satisfaction of the existence of factual position, such satisfaction of the existence of factual position, such satisfaction cannot be. the satisfaction of another officer on the basis where of he can pass such an order. On a plain construction of Section 47 it is clear that the identity of the officer who is to order the clearance of the goods and the officer whose satisfaction on these statutory conditions is necessary before the order of clearance is passed, is the same. Any other construction would make Section 47 negatory and unworkable.
(ii) It is also not factually correct that the Collector of Customs has passed an order of clearance under Section 47. In the instant case the order of the Collector in the note sheet is dated 7-1 -1983. The assessment was made on 12-1 -1983 and duty was paid on 12-1 -1983. On the same day the Group Appraier gave order to Oil Officer for drawing samples as per Test Memo with the remark "Good Released". Thereafter on 14-1-1983 the Oil Officer drew the sample as per Test Memo and released the goods for Home Consumption. So it is inconceivable that the so-called order dated 7-1-1983 could be termed or described as an order for clearance under Section 47 of the Act. The order for clearance for Home Consumption came to be passed on 14-1-1983 only, as can be seen from above.
(iii) The case reported in 1981 ELTP. 235 has no application whatsoever in the facts and circumstances of the case. The ratio of the said judgment as appearing at para 13 relied on by the Learned Senior Departmental Representatives is that the view taken by the two authorities i.e. Licensing and the Customs, in the matter of interpretation of the Licence should not be conflicting but in conformity with each other. The said judgement does not lay down any proposition that section 47 of the Act contemplates bifurcation of functions in the matter of passing the order of clearance for home consumption or postulates several officers enjoined with the duty to pass the order. The second case relied upon on behalf of the Department reported in AIR 1985 Calcutta, P. 122, para-26, has also no application. Once it is established that the so-called order of the Collector dated 7.1.1983 is merely an administrative clarification and not an adjudicating order, the said so-called order is not an appealable order under the Act. An administrative clarification or departmental instructions cannot stand as a legal bar in challenging any quasi-judicial order even though it might be passed by a lower authority.
The case reported in AIR 1971 SC,P.1558, Head Note "B" relied upon by the Department only lays down the proposition that a decision or order passed by an officer of the Customs under this Act used in section 188 of the Sea Customs Act must mean a real determination and not a purported determination. We do not dispute this proposition, but it has no relevance to the issues involved in the present case.
This Hon'ble Tribunal having regard to the facts and circumstances of the case would be pleased to dismiss this appeal is not maintainable in law, inter alia, on the following grounds: Orders or decisions passed by the Collector only in quasi-judicial capacity are subjected to review by the Board under Section 129-D(1).
(i) By the Finance (No.s) Act, 1980 (Act No. 44 of 1980), a far-reaching change has been brought about in the Customs Act, 1962 particularly in matters relating to departmental adjudication provided under the statute. By this Act, for the first time, a statutory Tribunal was set up and a clear distinction between the executive and the quasi-judicial functions of the officers of Customs was distinctly drawn. By this Act the term 'adjudicating authority' was defined and incorporated, and Chapter XV which previously related to 'appeals and revisions' have been amended and the power of revision by the Board has been drastically curtailed.
(ii) The scheme of the Act, if read as a whole, after the aforesaid amendment, makes it dear that the Collector is to discharge his functions/duties in a dual capacity viz. administrative capacity and quasi-judicial capacity. When he makes any order or gives any instructions in inter-departmental memos or departmental files he acts in an administrative capacity. However, when he proceeds to adjudicate any disputed issue between an assessee/importer and the Department having civil consequences, he acts as an adjudicating authority and is enjoined with a duty to discharge his functions in a quasi-judicial capacity by initiating proceedings which would commence with the issuance of the show cause notice and end with the communication of the order.
(iii) Only the order of the second category as above i.e. order passed by the Collector as an adjudicating authority in a proceeding is now subjected to review by the Board under section 129D-(1).
(iv) Prior to the said amendment the Board had the power of revision under section 130. The amendment has brought three major changes; :(a)Prior to amendment the Board could review an order passed by any officer of the Customs, whereas after the amendment the Board can review only the order passed by the Collector of Customs ;(b) after the amendment the Board can review only those orders of the Collector of Customs passed as an adjudicating authority (incorporated for the first time), whereas prior to the amendment the Board could review any order of the Collector of Customs or any other officer passed either as an adjudicating authority or as administrative authority and (c) the Board prior to amendment could nullify or set aside or modify the order of an officer of the Customs; whereas it can now only direct for filing an appeal petition to the Appellate Tribunal which is to decide the matter ultimately.
For better understanding the operative part of section 130(as it stood prior to the amendment) and the operative part of section 129-D(1) are set out hereunder: Section 130: Powers of revision of Board(1) The Board may of its own notion or on the application of any aggrieved person call for and examine the record of any proceeding in which an officer of Customs has passed any decision or order under this Act(not being an order passed in appeal under section 128) for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may pass such order thereon as it thinks fit; Section 129-D(1): Powers of a Board or Collector or Customs to pass certain orders - (1) The Board may, of its own notion, call for and examine the record of any proceeding in which a Collector of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself, direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order.
(v) In the instant case the so-called order of the Collector dated 7.1.1983 cannot by any stretch of imagination be described as an order passed by the Collector as an adjudicating authority in a proceeding in discharge of quasi-judicial functions. These are mere note sheets containing the administrative clarification and/or instructions which would be absolutely dear from the last sentence of the so-called purported order.
(vi) A decision or order contemplated in section 129-D must be a decision or order passed by an adjudicating authority in discharge of judicial/quasi-judicial functions in a lawfully instituted proceeding. The dictionary meaning of the words 'decision', 'order' and 'proceeding' as appearing from 'Black's Law Dictionary-Fifth Edition' are given below: 'Decision': A Determination arrived at after consideration of facts, and, in legal context, law. A popular rather than technical or legal word; a comprehensive term having no fixed, legal meaning. It may be employed as referring to ministerial act as well as to those that are judicial character. A determination of a judicial or quasi-judicial nature. A judgement or decree pronounced by a court in settlement of a controversy submitted to it and by way of authoritative answer to the questions raised before it. (P.366).
'Order': A mandate; percept; command; or direction authoritatively given. (P.988).
'Proceeding': in a general sense, the form and manner of conducting judicial business before a court or judicial officer, Regular and orderly progress in form of law, including all possible steps in an action from its commencement to the execution of judgement. Term also refers to administrative proceeding before agencies, tribunals, bureaus, or the like. An act which is done by the authority or direction of the court, agency or tribunal, express or implied; an act necessary to be done in order to obtain a given end; a prescribed mode of action for carrying into effect a legal right.
(P.1083).
(vii) In any event, the so-called instruction or decision contained in the file having not ever been communicated had not assumed the character of an order or decision as contemplated in section 129-D for the following reasons: (i) It is well-established principle of law as held by the Hon'ble Supreme Court in the case of Bichitra Singh Vs. State of Punjab reported in 1962 Sup.Vol.3, P.713 : AIR 1963 SC, 395 that an order or decision unless communicated does not become an order or decision in the eye of law or an effective order. The Supreme Court was pleased to hold that the order of the Revenue Minister Pepsu could not amount to an order by the State Government unless it was expressed in the name of Rajpramukh as required by Article 166(1) of the Constitution and was then communicated to the appellant; until the order was so communicated it was only of a provisional character and could reconsidered over again. Before communication the order was binding neither on the appellant nor on the State Government.
(viii) The scheme of the Act also vide section 153 makes a mandatory provision for communication of an order or decision, which necessarily implies that the process of passing the order is not completed unless the same is communicated in the manner prescribed under the Act. The contention of the Learned SDR that the so-called order dated 7.1.1983 has been communicated by referring the file in which the said order is contained on the Bill of Entry by the Assistant Collector is thoroughly misconceived. It is a well-established principle of law that if the statute prescribes any act to be done in a particular manner the statutory functionaries are not authorised to do the act in any manner other than the manner prescribed under the Act. Reliance has been placed on- (ix) In the instant case the Collector of Customs has not performed any of the funtions enumerated in section 47. The order for clearance was given by the proper officer and not by the Collector.
On the basis this is out of customs charge order was passed on 14.1.1983 after examination of the goods. The Collector could not have passed any order under section 47 as on 7.1.1983 when the goods had not been examined or duty was not paid.
(x) In any event, the instant appeal is also liable to be dismissed on the ground of serious procedural infirmities. No order of the Collector has been enclosed ' to the appeal as enjoined by Rule 9 of the Tribunal Appeal Rules. What is purported to be an order of the Collector of Customs is only the Notings made in the file and the same has been annexed to the appeal as "extracts of the Collector." There cannot be any appeal against an extract of an order nor the extract can tantamount to be an order It is respectfully submitted that this Hon'ble Tribunal would be pleased to reject the above appeal on the above preliminary grounds for the ends of justice.
5. Shri M.C.Thakur, Ld. S.D.R. replied to the preliminary objections of the Ld. Advocate and states that in the case of Metro Exporters FM.Ltd. the bill of entry was presented on 28.12.1983 in the Custom House.
On 5.1.84 Appraiser verified the papers and put up a note to Assistant Collector Group I and AC/Gr.I raised queries in the file on the same day and the respondent replied to the queries and on 6/1 the Appraiser had put up the file back to Assistant Collector with reference to the queries raised. Shri Thakur stated that the order passed by the Ld.
Collector is an adjudicating order and that he had already filed written arguments which may be considered. The arguments filed by the Ld. SDR on behalf of the appellant are reproduced below: - It would appear from the tabulated chart that the Bill of Entry was presented to the Customs House on 28.12.82. After verification of papers a note was put up to A.C. The A.C. raised queries and same were communicated through Bill of Entry to the importers.
Thereafter, along with the reply received from the respondents the file was put up to Collector for orders with regard to the acceptance of licence and clearance of the goods in question in the background of the events.
The process of completion of assessment of goods are necessarily to be complied with in terms of the various provisions of the Act; and primarily with Sec. 14,15 and 17. The payment of duty on goods imported or exported from India is an obligation created by the charging section which is quite capable of acting independent of the fact whether a particular import is authorised or unauthorised.
The note dt. 7.1.1983 put up by A.C. to the Collector raised a specific issue with regard to the coverage of import of crude coconut oil against additional licence issued to M/s. Bharat Diamond Industries and L/A issued in favour of the respondents.
The note stated that the licence issued is in A.M.79. The goods "crude coconut oil" Imported against this licence is a canalised item. That the licensing authority on the last day of revalidation have made endorsement which requires determination whether 'crude coconut oil' imported against this revalidated licence conforms to the description of the goods contained in the licence and due compliance of conditions applicable to the import in terms of the import policy.
The note also referred to the import of coconut oil at Kandala port and the orders of collector of Ahmedabad. It also referred to other relevant correspondences in this regard. The Collector of Customs considered the matter and allowed clearance.
Section 47 can broadly be categorised into three following headings:- Each one of them is a proceeding in itself. A requirement in terms of law. These proceedings, we may call for the sake of convenience, activities under the Act. There is no procedure laid down under Section 47 with regard to the exercise of power and discharge of functions.
The nature of such activities is transmissible in character and ascertainable under the statute. Therefore, the compliance in terms of Sec. 153 is not always required. The provisions for 'order of clearance' is solely to make it clear that preliminary requirements have duly been complied or met with.
The reference to the proper officer in Sec.47 has to be read in context with Sec.2(34). The definition makes it dear that a proper officer is one who has been assigned functions either by the Board or the Collector of Customs.
The provisions of Sections 3, 4 and 5 further make it dear that an officer of Customs is empowered to exercise powers conferred on him under the Act. By virtue of Sub-section (2) of Section 5, a superior officer of customs can exercise the powers conferred on sub-ordinate officers.
At what point of time a superior officer may exercise powers conferred on a sub-ordinate officers will depend on factors which impliedly have exigencies of the matter for the purpose of discharging functions under the Act. The scheme contained in the Act has to be seen in the background of what is intended under the Act to achieve.
It is to be remembered here that the Act here is giving a cause of action. Therefore, in a given situation, at a point of time, a proper officer for the purpose of discharging the functions under Sec.47 need not necessarily be one and that too a sub-ordinate officer only.
The concept of exercise of power under the Act by a superior officer is dependent on the fact that the superior officer has already been vested with those powers under the Act and thereby powers have been delegated to the subordinate officer.
Therefore, all those powers which a sub-ordinate officer is capable of exercising are already vested with the superior officer unless expressly stated otherwise in the enactment.
That means there is something in the nature of things that a superior officer can do directly or Indirectly to promote the observance of law.
This is perhaps with a view to give practical effect to the legislative intent.
Each word under Sec.47 has to be carefully gone through; for its significance and effect thereof in the background of the scheme of the Act.
The proper officer under Sec.47 need not be one. It could be more than one. It could be superior and sub-ordinate both depending on the functions to be discharged.
the provisions of Sec.47 refer to 'the proper officer' and not a proper officer. Therefore, it can be read in plural.
The determinations of not prohibited goods, has to be understood in context with the provisions of the Act, import licence and the relevant policy.
In the matter of preference, as it is capable of a construction, an order permitting clearance under Sec.47 is the last link of activities enjoined therein. A permission to clear goods after due compliance to the requirements of the relevant provisions of the Act.
Licence is a document. This document has to be read as a whole and in terms of the import policy to adjudge the status of goods. This act of adjudgement is a proceeding in exercise of powers vested in the proper officer under the Act Therefore, its true legal nature and effect with regard to the import of goods as a whole becomes a point for determination here. This power of determination is derived from the Act.
The Collector has considered the issue raised in the note of A.C. The Collector being seized of the matter has come to a reasonable finding and accepted licence and allowed clearance.
This decision/order of the Collector was under Sec.47 for a limited purpose.
The Collector exercising his powers under Sec.47 has not created a new jurisdiction nor has enlarged the existing one. The scheme of the Act permits him to exercise powers under Sec.47.
The decision or order has not been defined in the Act. The Collector having satisfied himself on this particular point has come to a dear conclusion and this is a decision/order within the meaning of the Act. The Collector of Customs was a competent officer in terms of Sec.2(1) of the Act to pass such an order/decision.A.K. Kraipak v. Union of India, AIR 1970 SC 150 laid down that :- The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. For determining whether a power is an administrative power or quasi-judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised. In a welfare State like India which is regulated and controlled by the rule of law it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of law would lose its vitality if the instrumentalities, of the State are not charged with the duty of discharging their funtions in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a Judicial power are merely those which facilitate if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi-judicial power.
The decision/order of Collector therefore cannot by any means be regarded as administrative. In the instant case the impugned decision/order, however, did not affect any right of the respondents.
The decision/order of the Collector dt.7.1.83 had become final and was duly implemented by sub-ordinate officer. The Bill of Entry refers to the relevant file No. containing the decision/order of the Collector.
Thereafter, there was nothing left for the sub-ordinate officer to determine the nature of goods. The Collector of Customs was proper officer for this determination. In these two cases, for a limited purpose under Sec.47. Once the Collr. was satisfied he accepted the licence and allowed clearance.
Alternatively, the decision/order dt.7.1.83 passed by the Collector of Customs may be regarded as decision/order under the Act. (Mangla Brothers AIR 1985 Cal.122) Para-26.
The finality of this decision/order however, was subject to the provisions of section 129-D. The Collector of Customs on the direction contained in the order passed by the Board in exercise of power under See. 129D(1), upon examination of the record of proceedings has filed on application under Sec. 129D(4) of the Act before the Appellate Tribunal.
The hearing of such application on merit by the Tribunal is mandatory in terms of the word "shall" appearing in Sec.129D(4).
The preliminary objections raised by the respondents is without any substance.
It is, therefore, prayed that the applications filed by the Collector of Customs under Section 129D(4) in these two cases be heard on merits.
6. in addition to the written arguments, Shri M.C. Thakur, Ld. SDR, has cited a judgment of the Tribunal in the case of Collector of Customs v. M.J. Enterprises, Bombay reported in 1987(12) ECR 490 where the South Regional Bench of the Tribunal had held that order passed on a disputed point relating to the validity of import licence is an adjudication order and not an administrative order and hence the Board was competent to review the same, Shri Thakur, the learned S.D.R. has argued that in view of the written submissions and his arguments the appeal filed by the appellants needs to be allowed.
7. Shri Nankani, the learned Advocate on behalf of M/s. Jayant Oil Mills submits that written arguments have already been filed. The Collector's order is in the nature of the guidance issued to sub-ordinate officers. There is no communication of the order to the respondents. Shri Nankani has argued that his arguments are the same which have been advanced by Shri Roychowdhury and the written arguments are common in both the cases. Shri Nankani has pleaded for the dismissal of the appeal.
8. In reply Shri Roychowdhury, the learned senior Advocate has referred to the judgements in the case of Collector of Central Excise, Bombay-Ill v. Orkay Polyester reported in 1987(28) ELT-100 where the West Regional Bench had held that 'The power conferred on the Collector under sub-section(2) of Section 35E is a suo motu power of examination of the record of any proceeding in which the adjudicating authority subordinate to him has passed any decision or order under the Act for the purpose of satisfying himself as to the legality or propriety of such decision or order. In the instant case, the respondents sought permission under Rule-56B to remove polyester filament yarn for draw texturisation. The Assistant Collector by his order dated 17.5.1982 granted permission but by his order 11.3.83 withdrew the permission. The order granting permission, though statutory, was purely discretionary and the same cannot be treated as a 'decision' or 'adjudication order' as is understood by law. The Assistant Collector did hot act as an Adjudicating Authority. He was not required to decide any issue or dispute. There was no duty to act judicially; Therefore, the contention of the respondents that the Collector ought to have exercised his power under Section 35E (2) and since he had not done so, the order dated 17.5.1982 had become final, deserves to be rejected". He has laid special emphasis on page Nos. 26, 27 and 28 of the said order. Shri Nankani, the learned advocate has pleaded for the dismissal of the appeals.
9. We have heard both the sides and have also considered the written submissions filed by both the sides. Before we proceed further we feel that for the proper appreciation of the facts, the reproduction of the Collector's order dated 7.1.1983 is very necessary.- "Extract of Collector's order and Asstt. Collr. Gr.I's notes as in File No. S202-Gr.I(P)-1/83A at N/S IX-XV." "2. Bs/E have been presented for importation of crude coconut oil in bulk by M/s. Jayant Oil Mills Pvt. Ltd. and M/s. Metro Exporters Pvt. Ltd., Bombay. In both these cases the clearance has been sought as an OGL item against additional licence export house No. 2904477 dated 23rd February, 1979. The export house additional licence has been issued to M/s. Bharat Diamond industries, Naginmahal, Vimariman Road, Bombay-20 and the importers have letters of authority in their name. Since the importation of crude coconut oil is canalised as the same appears in Appendix 9 of 82-83 policy, vide their letter No. Nil dated 6.1.83 placed opposite may please be seen. They have referred to the slip attached with the licence which reads that "this licence is revalidated upto 8.2.83 subject to the condition that during the extended period of revalidity the licence shall be valid for import of items in Appendices 5 and 7 and under OGL which can be imported against additional licence subject to the condition contained in para 231 (1) (2) and (4) of import and Export Policy (Volume-1, 82-83). They have submitted that the slip attached indicates that it allows all OGL items as are allowed on the date of issue of the licence subject to para 231 (1) (2) and (4) and in these paras there is no restriction in regard to the importation of OGL items. However, the close scrutiny of this slip attached will indicate that it permits the importation of appendices 5 and 7 and OGL items which can be allowed against additional licences, the slip does not indicate any policy period as such and the importer has stated that it indicates to the policy relevant on the date of issue of the licence i.e. AM 79 Policy. However, it may also be interpreted that the slip indicates that the licence is revalidated to import Appendices 5 and 7 and OGL items which can be imported against the additional licences in 82-83 policy. If that is the case, the industrial grade coconut oil does not appear in Appendices 5 and 7 and it is also not covered under OGL in the present policy, and as the shipment is taking place in the present policy the importation appears to be unauthorised.
The subject licence though issued in February 1979 has been revalidated from time to time with certain conditions. It is true that it is an additional export house licence and Appendices 5 and 7 and OGL items should be allowed as are permissible on the date of the issue of the licence. But it may be mentioned that importation of OGL items is an additional licence and the importation of OGL items is made subject to the conditions mentioned in Appendix 10 of import policy. One of the conditions that has been in existence throughout is that importation of OGL items will take place within the validity of the OGL which is normally 31st March of each year.
This condition appears in '79 import policy also. But it is seen that coconut industrial oil was allowed under OGL in '80 as well as in '81 import policy and it was made clear only in '82 import policy that coconut oil both edible and inedible grade were canalised. It means that the validity of the coconut oil under OGL was there upto March '81 only and importation under OGL of the said item could be allowed if the shipment was within the validity period i.e. 31st March, 1981. However para 222(3) of import policy '82 gives more flexibility and reads that REP licences and additional licences held by export houses will cease to be valid for import of any item which could be imported under OGL during 80-81 but is no longer so in this import policy except for such firm commitment as have been made by opening irrevocable letter of credit through authorised dealers in foreign exchange before 1.4.81. It means that importation of OGL items of 80-81 policy can be allowed in the subsequent period if the irrevocable L/C is opened before 1.4.81. In the present case the order is placed on 13.3.81 but no L/C was opened prior to 1.4.81. In view of this the subject licence does not appear to be covering the imported items as the same is not being imported within the validity of the OGL However the contention of the importer is that the item allowed as OGL on the date of the issue of the licence and the subsequent withdrawal of the item from the OGL should not affect their import licence. The slip attached to the licence may also mean that the licence has been revalidated to import Appendices 5 and 7 and OGL items of import policy relevant at the time of the issue of the licence as the importation has been made conditional to the transitional arrangement made in para 231(1)(2) and (4). Curiously enough, the licensing authorities have not made the revalidation subject to the condition 231 (3) of import policy '83. This para was most crutial to be mentioned in the revalidation slip as it clearly indicates that FIEP licences and additional licences held by export houses/trading houses will cease to be valid for import of any item which could be imported under OGL during 81-82 but no longer so in this import export policy.
In this connection attention is drawn to D.O.No.VIII/48-212-Cus-T/82 dated 30th December, 1982 from Shri B.V.Kumar, Collector of Customs and Central Excise, Ahmedabad, enclosing orders-in-original Nos.6 and 7 (placed in file below) passed by him in regard to importation of coconut oil imported at Kandla Port. By going through these orders it is observed that these licences were issued in 80-81 and at the time revaluation had been made subject to para-222(3) and 185(3) of import policy '82. In this case the subject licence has not been made subject to condition 185(3) of '82 policy and 186(8) of 82-83 policy and as already mentioned this licence is also not subject to the conditions as laid down in para 231 (3) of '83 policy. To the extent mentioned above, the licences produced in this case are different from the licences produced at Kandla by M/s.
Jayant OH Mills Pvt. Ltd.. New Delhi.
In this regard kind attention is also invited to Jt. C.C.I.'s D.O. No. IPC/4/9(5)/40/8l-82/2873, dated 4th September, 1982 wherein it is stated that any consignment of copra and coconut oil when arrived, full details may be sent to them before clearance is allowed. The Director, Central Board of Excise and Customs in his D.O. letter No. 528/62/82-Cus(TU) dated 11.12.82 has directed that there should be no delay and such cases should be expeditiously decided. Another letter of the same number dated 20th December, 1982 enclosing Shri Takhat Ram, Jt. C.C.I.'s D.O. letter No. IPC/4/9(5)/40/81-82(pt) has also been received which may please be seen. These letters have been placed in the file in F.No. S202-Gr.I(G)66/82A placed below. Notes foregoing some of the peculiar nature of revaluation in particular licence No. 2904477 is submitted for information and order..."sd. AC Gr.I 7.1.83.
(1) The first revaluation effect on 7.2.1981 (revalidating the licence for a period of 3 months March, April, May, 1981) is with the condition that it is subject to para 213 of AM 1980 Policy.
Since AM 1980 Policy does not canalise the Industrial Grade Coconut Oil this endorsement does not debar the import. It is during this period that an order has been placed with the foreign supplier for supply of coconut oil, shipment period being specified as November - December, 1982.
(2) The second revaluation is dated 29.5.1981 revalidating the licence for three months - June, July, August, 1981 - with a condition that para 213 of AM 1980, para 215 AM 1981 and para 222 of AM 1982 Policy Book would be applicable. While paras 213 and 215 would not be very relevant for them, for this specific importation para 222 of AM 1982 would be relevant. However, no action has been taken by the importers during this validity period.
(3) Again this has been extended for a period of six months subject to the condition of para 215 of Import Policy 1980-81. Again since canalisation took place in April 1981, this condition is also not relevant for this Importation.
(4) The last extension has been given on 2.11.82 extending the validity of the licence upto 8.2.1983 subject to the condition that "during the extended period of validity the licence shall be valid for import items in Appendices 5 and 7 and under OGL which can be imported against additional licences subject to the conditions contained in Paras 231 (1), (2) and (4) of import and Export Policy (Vol.l) 1982-83". During this revalidation, the importer has opened the L/C and also effected the shipment.
Since the shipment has taken place in December, 1982, the last revalidation would perhaps be relevant for consideration as to whether the licence produced would be valid to cover the present import. It is not dear from the endorsement whether the reference to "Appendices 5 & 7 and under OGL" refers to which period-whether the period of issue of the licence namely AM 1979, or would relate to the current policy 1982-83. However, their reference to the transitional para in the subsequent portion of the revalidation perhaps makes it clear that this reference to Appendices 5 and 7 and OGL cannot be with reference to 1982-83 Policy. Further, it is also dear that only the transitional arrangements covered by para 231 (1),(2) and (4) of 1982-83 Policy have been made applicable. These sub-paras (1),(2) and (4) relate to certain additional benefits that are available to the additional licence for export houses. The crucial para namely sub-para (3) of para 231 specifically prohibiting import of any item which was under OGL during 1981-82 Policy, but no longer so in the policy for 1982-83, has not been referred to in the endorsement and hence it is a deliberate omission. Further, it is also seen that facility under Para 174(5) of AM 1979 Policy, under which the additional facility of importing raw materials, components, and spares which have been placed on OGL for actual users have been permitted for additional licences issued during AM 1979 Policy has not been taken away in the endorsement relating to the revaluation. Nor they have placed the restriction under para 231 (3) of the current Policy which would otherwise prohibit import of OGL items which are no more under OGL in the current Policy. In view of this situation, I find no other alternative but to accept the licence and allow the clearance.
However, this factor should be brought to the notice of the CCI & E for their information with reference to their earlier communication." A simple perusal of the order shows that even on the top of the orders! "extracts of Collector's order and Asst. Collector Gr.I's notes as in File No. S202-Gr.I(P)- I/83A at N/3 IX-XV". This order reproduced above is the subject matter of the appeal. The learned advocates for the respondents raised the preliminary objection that the subject order is not an adjudicating order and the application on Form CA-5 can only be filed in a case in which the Collector of Customs had passed an order as an adjudicating authority. Section 129D of the Customs Act is reproduced below :- S. 129D. Powers of Board or Collector of Customs to pass certain orders.
(1) The Board may, of its own motion, call for and examine the record of any proceeding in which a Collector of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order.
(2) 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, (3) No order shall be made under Sub-section (1) or Sub-section (2) after expiry of one year (Subs, by Finance Act, 1984 for 'two years") from the date of the decision or order of the adjudicating authority.
(4) Wherein pursuance of an order under Sub-section (1) or Sub-section (2), the adjudicating authority or any officer of Customs authorised in this behalf by the Collector of Customs, makes an application to the Appellate Tribunal or the Collector (Appeals) within a period of three months from the date of communication of the order under Sub-section (1) or Sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal xx the Collector (Appeals), as the case may be, as if such application was an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of subsection (4) of section 129A shall, so far as may be apply to such application." A simple perusal of Section 1290 shows that an application to be treated as an appeal under Section 129D(4) can only be filed in a case where the orders were passed by the Collector of Customs as an adjudicating authority. In the matter before us the facts are not disputed. The learned S.D.R. on behalf of the appellant has filed a chart of important dates in both the cases. The Bill of Entry in Metro Exporters Pvt. Ltd. case was numbered as 1582 dated 2th Jan., 83 and in the case of Jayant Oil Mills the number was E-581 dated 12th Jan., 1983. Since the facts and dates in both the cases are similar the chart of important dates in Jayant Oil Mills is reproduced below:- 5.1.83 Appraiser verified the papers and put up a note to A.C. Group-l.
6.1.83 Appraiser put up file back to A.C. with reference to queries raised 7.1.83 File was put up by A.C.Gr.I to Collr. for his order regarding acceptance of licence and clearance of the consignment 8.1.83 Collector passed order accepting licence and allowing clearance of the consignment in file 22.10.83 Board's order 104R and 105R dated 12.10.83 passed under Section 1290(1) of the Customs Act, 1962 for filing an application under Section 1290(4) order was received by Custom House on 22.10.83.
23.11.83 Collector of Customs filed an appeal before the Hon'ble Tribunal.
A simple perusal of the extract from the Collector's order attached with Form No. CA-5 shows that it is an administrative instruction/communication to the Assistant Collector. It is a settled law that a quasi-judicial authority while passing an adjudication order has to apply his/her own mind and the administrative order/instructions/communication cannot be treated as an adjudication order. The Hon'ble Madras High Court in the case of M.Nazir Hussain v.Assistant Collector of Customs reported in (1969) 82 Mad LW 257 had held that "Where clearance certificate for a consignment of goat hair is given, but later on receipt of a communication from the Government clarifying schedule II, item 12 of the Indian Customs Tariff, duty on that consignment is demanded under Section 28(1) of the Customs Act, the demand order is vitiated.
Where administrative officers are vested with quasi-judicial powers, they should function and exercise those powers by application of their own minds entirely uncontrolled and unguided by any direction issued by any superior officer in the hierarchy of the administrative set-up and therefore, where it is shown that an order of such an authority has rested solely on a direction from the administrative superior, it will be illegal.
As such, where after giving clearance certificate for a consignment of goat hair the authority under the Act, on receipt of a communication from the Government clarifying schedule II, Item 12 of the Indian Customs Tariff, demands under Section 28(1) duty on that consignment, his order being solely guided by the Government direction is, by that very fact, vitiated. There is no doubt, ex facie, from such order of the authority that he considered the Government directive as decision.
The authority that he considered the Government directive as decision.
The authority should be left free to decide the scope of schedule II, Item 12 of the Indian Customs Tariff (Extract taken from S.R.Roy's Second Edition 1966, paras 97 & 98). Hon'ble Calcutta High Court in the case of the income-tax Officer 'F' Ward, Dist. IIIA and Ors. v. Eastern Scales (Pvt.) Ltd. reported in 1978 TLR 1039 had held that Section 119(3) does not permit the authorities mentioned therein to interfere with the exercise of judicial or quasi-judicial functions by the income-tax Officer in making the assessment. Section 119 contemplates administrative directions or instructions that may be issued from time to time by the authorities mentioned in Sub-section (3) as also in other sub-sections. The income-tax Officer has to act judicially or quasi-judicially in the assessment proceedings and any direction by any higher authority as to the manner in which such proceedings are to be disposed of would be interference with the judicial or quasi-judicial function of the Income-tax Officer and if he acts according to such directions his orders are liable to be set aside on that ground.
Where, the Income-tax Officer passed order rectifying the assessment order under S. 154 according to the directions of the Additional Commissioner of Income-tax, the order passed by the Income-tax Officer was liable to be set aside as was passed at the behest of the Commissioner and not at his own Instance. Similar ratio was laid down in the case of J.K. Synthetics Ltd., and Ors. v. Central Board of Direct Taxes and Ors. reported in (1972) 83 ITR 335 SC. In that case the Supreme Court had held that we were informed by the counsel for both the parties that the decisions conveyed in those communications were not made in exercise of any of the powers conferred on the Board by any law. They were merely replies to the communications sent by the appellants. They cannot be even considered as directions under Section 111 of the Income-tax Act, 1961, as they pertain to decisions to be taken by concerned taxing authorities. The Board is not competent to give directions regarding the exercise of any judicial power by its subordinates. The opinions expressed in those communications pertain to the exercise of judicial powers by the taxing authorities, as it is for those authorities to determine as to the year in which the undertaking began to "manufacture or to produce articles" within the meaning of Section 80J of the income-tax Act, 1961. The communications sent by the Board and impugned in the writ petition are replies sent by the Board to the letters written by the appellant. They cannot bind the taxing authorities who have to decide the question in issue on its own merits, uninfluenced by extraneous considerations. In terms of the provisions of Section 129-D of the Customs Act the Board may, of its own motion, call for and examine the record of any proceeding in which a Collector of Customs as an adjudicating authority has passed any decision or order this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. Sub-section (1) of Section 2 of the Customs Act defines the "adjudicating authority" as any authority competent to pass any order or decision under the Customs Act, but does not include the Board, Collector (Appeals) or Appeallate Tribunal. Before we come to any conclusion we have to see whether the order dated 7.1.83 is an adjudication order or decision. The same has not been defined in the Act and as such a recourse has to be taken to the dictionary meaning in view of the Hon'ble Supreme Court's judgment in the case of Commissioner of income-tax v. Taj Mahal Hotel reported in A.I.R. 1972 S.C. 168 at page 170, where the definition of a word has not been given in an Act it must be construed in its 'popular sense' if it is a word of every-day use. "Popular sense" means that sense, which people conversant with the subject matter, with which the statute is dealing, would attribute to ft. In such a case it is also permissible to refer to dictionaries to find out the general sense in which the word is understood in common parlance. However, in selecting one out of the various meanings of the word, regard must always be had to the context.
It was also held by the Hon'ble Rajas-than High court in the case of Shitabkhan v. Bar Council of India, AIR 1969 Raj. 136 at page 141. The Hon'ble Punjab High Court had held that in the case of Hazara Singh v.State of Punjab, AIR 1961, Punjab 34 at page 39 (Full Bench), where a word used to an Act, is capable of various shades of meaning, the particular meaning to be attached must be arrived at by reference to the Scheme of the Act or of the Section in particular taken as a whole.
Maxwell who is considered to be an authority on interpretation of Statutes on the interpretation of Statutes, 12th Edition in his book has written "I am quite aware, that dictionaries are not to be taken as authoritative exponents of the meanings of the words used in Acts of Parliament, but it is a well-known rule of courts of law that words should be taken to be used in their ordinary sense, and we are therefore sent for instruction to these books". He has also written that the meaning of a section may be determined, not so much by reference to other individual provisions of the statute, as by the scheme of the Act regarded in general. He has further opined that the previous legislation may be relevant to the interpretation of later statutes in two ways (I) the course which legislation on a particular point has followed often provides an indication as to how the Act at present in force should be interpreted, and (ii) light may be thrown on the meaning of a phrase in a statute with reference to a specific phrase in an earlier statute dealing with the same subject matter.
Since adjudication has not been defined in the Act, we have to resort to various dictionary meanings: 1. Moziey and Whiteley's Law Dictionary, 8th Edition by John B. Saunders defines adjudication as "Adjudication: 1. The giving of judgment a sentence or decree. Thus we say, it was adjudged for the plaintiff etc.
2. An adjudication of bankruptcy, or that AB was adjudicated a bankrupt following the making of a receiving order if no composition was accepted (Bankrupt).
3. By commissioners of Inland Revenue as to amount to stamp duty chargeable upon a document where in case of doubt application has been made to them under Section 12 of the Stamp Act, 1891. A stamp indicating their decision is impressed or affixed. There is an appeal to the High Court.
II. Butterworth's Words and Phrases legally defined volume 2: D-H : 1969 Edition Decision - Australia -I take it that an adjudication or decision of justices is something which is announced but not what is passing in the minds. of the justices. It is a decision announced in open court. That is their decision or adjudication.
Adjudication : The passing of a sentence/judgment or decree. It is specially used in bankruptcy law. The court is said to adjudicate or declare a debtor bankrupt when satisfied that there is reason for so doing (Harms).
- is that diligence (execution of the law) by which the real estate of a debtor is adjudged to belong to his creditors in payment of the debts; and the abbreviate must be recorded in the register of adjudication (Bell's dictionary) - Order. The order of a Court in its insolvency jurisdiction declaring a person insolvent.
Adjudication means giving or pronouncing a decision. The terms is often used in insolvency proceedings to denote an order by which a debtor is declared an insolvent. See Section 7 of the Provincial Insolvency Act, 1920 and Section 10 of the Presidency Town Insolvency Act, 1909.
The Collector may adjudicate proper duty payable on an instrument on application by any party. See Sections 31 and 32. Indian Stamp Act, 1899.
Adjudication: The judgment or decision of a Court. The terms is principally used in bankruptcy proceedings, the adjudication being the order which declared the debtor to be bankrupt (q.v.) Jowitt's Law Dictionary 1959 Adjudication : Giving or pronouncing a judgment or decree. In bankruptcy law, adjudication is the act of the Court declaring a person to be bankrupt. In Scots Law it signifies the 'diligence' by which land is attached in security and payment of debt, or by which a feudal title is made up in a person holding an obligation to convey without a procuratory of resignation or precept sasine. There are thus (1) the adjudication for debt; (2) the adjudication in security; and (3) adjudication in implement (Bell's Dict.) A decision of the Honourable Supreme Court has given the definition of Decision in the case of Province of Bombay v. Khushaldas S. Advani, 1950 S.C.R. 621 at p. 642 reported in AIR 1950 S.C. 222 at p.229 as: The word "decision" in common parlance is more or less a neutral expression and it can be used with reference to purely executive acts as well as judicial orders. The mere fact that an executive authority has to decide some thing does not make the decision judicial. It is the manner in which the decision has to be arrived at which makes the difference and the real test is: is there any duty to decide judicially? He does decree also an adjudging of them upon that Account to eternal glory.
2. A sitting in judgment, or pronouncing sentences, upon a claim.
Men whose lives were passed in adjudicating oh question of civil rights.
Adjudication: of action: see adjudicate. The Fr. adjudication 16th C. in Litre, may be the immediate source.
1. The act of adjudicating or adjudging; an awarding or settling by judicial decree.
4. Scotch Law - An attachment of heritable estate as security or in satisfaction of a debt.
[Extract from the case of Mahindra & Mahindra Ltd. v. Collector of Central Excise, Bombay-I reported in 1983 ECR 1865 (Cegat)].
The dictionary meanings of the word 'Decision', 'Order' and 'Proceeding' as appearing from Black's Law Dictionary Fifth Edition are reproduced below :- Decision : "A determination arrived at after consideration of acts, and, in legal context, law. A popular rather than technical or legal word; a comprehensive term having no fixed, legal meaning. It may be employed as referring to ministerial act as well as to those that are judicial or of a judicial character. A determination of a judicial or quasi-judicial nature. A judgment or decree pronounced by a court in settlement of a controversy submitted to it and by way of authoritative answer to the questions raised before it". [Page 366] Order : A mandate; percept; command; or direction authoritatively given. [P. 988] Proceeding: "In a general sense, the form and manner for conducting judicial business before a court or judicial officer. Regular and orderly progress in form of law, including all possible steps in an action from its commencement to the execution of judgment. Term also refers to administrative proceeding before agencies, tribunals, bureaus, or the like...." An act which is done by the authority or direction of the court, agency or tribunal, express or implied; an act necessary to be done in order to obtain a given end; a prescribed mode of action for carrying into effect a legal right. [P. 1083] The respondents have also cited the judgment of the Hon'ble Supreme Court in the case of Bachhittar Singh v. State of Punjab and Anr.
reported in AIR 1963 S.C. 395 wherein it was held that "an order or decision unless communicated does not become an order or decision in the eye of law or an effective order. The Supreme Court was pleased to hold that the order of the Revenue Minister Pepsu could not amount to an order by the State Government unless it was expressed in the name of Rajpramukh as required by Article 166(1) of the Constitution and was then communicated to the appellant; until the order was so communicated it was only of a provisional character and could be reconsidered over and over again. Before communication the order was binding neither on the appellant nor on the State Government". In the matter before us the adjudication was done by the Assistant Collector. The extract of the order dated 7th January, 1983 which has been attached with Form CA5 is in fact communication between the Assistant Collector and the Collector and the same could not be treated as an adjudication order/decision.
The same has never been communicated to the respondents in terms of the provisions of Section 153 of the Customs Act, 1962 and as such is not binding on the respondents in any way. The judgments cited by the learned S.D.R. also do not help him as the facts are different and the learned S.D.R. has cited the judgment of the South Regional Bench in the case of Collector of Customs, Cochin v. M.J. Enterprises reported in 1987 (12) ECR 490 CEGAT. This judgment does not help the appellant.
In view of the Hon'ble Madras High Court's judgment in the case of M.Nazir Hussain v. Assistant Collector reported in 1969 (82) Madras LW 257 and Hon'ble Supreme Court's judgment in the case of Bachhittar Singh v. State of Punjab and Anr. reported in AIR 1963 S.C. 395 and dictionary meanings, we hold that the order dated 7th January, 1983 is not a decision or order passed by the Collector of Customs, Calcutta as an adjudicating authority and as such the same cannot be a subject matter of appeal before the Tribunal in terms of the provisions of Section 129D of the Customs Act, 1962. Accordingly the application under Section 129D to be treated as appeals are not maintainable. In the result both the appeals are dismissed.
10. These are applications fled by the Collector of Customs. Calcutta as per the direction of the Central Board of Excise and Customs. A question has arisen as to whether the Board is competent to pass orders in terms of Section 129D of the Customs Act, 1962 to direct the Collector of Customs to file applications against the impugned orders before this Tribunal.
11. Our attention has been drawn, in this connection, to the language used in Section 129D(1) which authorises the Board to call for and examine the record of any proceeding in which a Collector of Customs, as an adjudicating authority, has passed any decision or order under this Act. It has been contended before us that 'Proceeding' referred to in the above provision could only be an adjudication proceeding and the Board was competent to pass orders under Section 1290 only in respect of such a proceeding and not other proceedings.
12. I find that there is a lot of force in this argument. As I had mentioned in the Court, a comparison of old Section 130 (as it stood prior to October 1982) and Section 129D (as it stands now) clearly shows that prior to amendment, the Board could call for and examine the record of any proceeding in which a Collector of Customs had passed any decision or order whereas after the amendment its powers were restricted to calling for and examining the record of only such proceedings in which a Collector of Customs had passed an order or decision as an adjudicating authority. In other words, earlier the Board could question any decision or order of the Collector irrespective of whether it was an executive or a quasi-judicial decision or order, whereas now it can direct fling of an application before the Tribunal only in respect of such proceedings which were in the nature of quasi-judicial proceedings.
13. It is, therefore, necessary to determine the nature of action taken and the proceedings, if any, in which the Collector of Customs had passed the impugned 'orders'.
14. In this connection, an examination of the papers filed by the Department shows that they include a note of the Assistant Collector which was put up on file to the Collector for his orders. The papers also include a decision of the Collector on the notesheet, passed on the baste of the notes put up to him. The note of the A.C. indicates the view point of the Appraising Group regarding the validity of a licence. The note of the Collector, recorded after considering the Group's viewpoint, incorporates a decision accepting the licence and allowing clearance.
15. Before the consider as to what it all amounts to, it may be helpful to take note of a few baste facts regarding the scheme of the Act and the Departmental procedure in respect of processing of bills of entry and licences for the purpose of allowing clearance of goods.
16. Normally, an importer (or his agent) files a bill of entry in the Custom House along with the relevant documents including the licence.
After noting the bill of entry is processed in the Appraising Group. At this stage, the Appraiser and the Group A.C. examine the documents and raise queries, if any necessary, and the importer (or his agent) answers to the queries; if the officers are satisfied, the licence is accepted and the bill of entry is completed. The goods are, thereafter, released on payment of such duty as may have been assessed.
17. The process includes examination of goods at an appropriate stage (which may precede or follow the scrutiny of documents). Finally, an order of clearance is passed and the goods are allowed out of Customs Control). The out-of-charge order is normally given by an officer in the docks after seeing the relevant documents.
18. In other words, the clearance of goods through Customs involves a series of steps or actions in several phases or stages. Each of these steps by itself is normally in the nature of an administrative, technical or executive action and the entire process, may or may not involve adjudication. The need for adjudication as a matter of fact, arises only in such cases where a dispute, inter se, between the Department and the importers, surfaces; that is to say, an adjudication proceeding pro-supposes or implies the existence of a 'Lis', inter se, between the parties and initiation of steps prescribed in law such as issue of notice etc. for the purpose; and if is well-established that during the adjudication proceedings under the Customs Act, the norms prescribed for quasi-judicial proceedings are required to be adhered to.
19. In the instant case, it appears that a licence was produced before the officers at the time of filing the bill of entry, some queries were raised and answered and the licence was put up to the Collector by the Group Officer with his views and was found to be acceptable. Therefore, obviously, no 'Lis' arose, inter se, between the Department and the importer. Hence, apparently there was no need for initiating adjudicating proceeding and none was, in fact, initiated. This is evident from the fact that no show cause notice was issued and no hearing was offered, which would have normally been done in case it was decided to adjudicate the case. It is indeed apparent from the documents filed before us including the notes of the A.C. and the Collector and the datasheet, that after the queries had been replied to, the whole debate in the matter was confined to (within) the Department and the action taken was in the nature of internal processing of the case. That is to say, acting in accordance with the prevalent procedure the Collector had arrived at his decision in an executive fashion. In other words, the Collector had taken a decision and passed an order during the course of an administrative/executive proceedings, in this view of the matter.
21. Since it has been pleaded by the Ld. S.D.R. at great length that the order of the Ld. Collector was, in fact, an order passed under Section 47, it may be mentioned that orders in adjudication proceedings are passed, nor under Section 47, but with reference to Section 122 read with Section 124 and other relevant provisions of the Customs Act (and/or allied laws). Indeed, no order in the nature of adjudication order is required to be passed in terms of Section 47.
22. Section 47, as a matter of fact, provides only for executive step(s) consequent to or flowing from a series of actions required to be taken in respect of the goods, right from their landing or filing of a bill of entry onwards. It simply involves checking whether the orders (executive/quasi-judicial) already passed have been duly implemented so that the goods could be allowed to pass out-of-Customs control. That's all. In other words, an officer acting under Section 47 merely acts like a security officer guarding the entry/exit of a prohibited area to which access is permissible only by a 'Pass' and therefore, the Security Officer or the Guard at the gate is required to examine the 'Pass' and see whether it has been issued by the appropriate authority in respect of the person holding the same and was valid for the day or time of seeking entry or exit. Such security officer does not by himself decide as to whether the holder of the 'Pass' was otherwise eligible for such a 'Pass'. Similarly, the proper officer acting under Section 47 does not adjudicate. He merely sees as to whether all the prescribed formalities have been duly completed and allows the goods to go out of Customs charge if he is satisfied in this respect. This is the limited role of an officer acting under Section 47. Nothing, of course, prevents the Collector of Customs from performing these duties, if he has reasons to or chooses to perform these functions which are otherwise normally performed by a junior officer. But even if the Collector chose to do so, the act would still be an executive act and would not get converted into an act of adjudication merely because the officer allowing out-of-charge happens to be a Collector.
23. Furthermore, as aforesaid an order under Section 47 is the result of other action(s)/decision(s) taken before this stage. In specific terms, it means and shows that an order for completion of a bill of entry or acceptance of a licence, must necessarily preceded an order under Section 47; and this is exactly what has happened in the instant cases; as evident from the notes the datesheets and the bill of entry.
First it is the Collector who has, taken a decision to accept the licence, thereafter, the Group has completed the bills of entry and allowed the goods to be cleared; consequently, an order under Section 47 has been ultimately passed in the normal course by the proper officer at the gate of the docks. The decision of the Collector is, by no means, an order under Section 47. It is actually an order passed long before the out-of-charge stage. [But, if indeed it was an order under Section 47, as argued by the Ld. S.O.R., then and even then if could only be an executive order as shown above and we would be back to square one.] 24. I may also take this opportunity to mention that adjudication in the circumstances, if and when resorted to, is normally required to be preceded as well as followed up by executive action and therefore, merely represents an intermediate stage as such. (This is equally true of town-seizure and baggage cases as also purely assessment cases).
25. It is often argued that the processing of the bill of entry or an assessment by itself was a quasi-judicial act but in my opinion, it need not always be so and where there was no 'Lis', no dispute, then the processing could be completed by various executive steps alone. The same is true of matters requiring acceptance of licence.
26. Thus, it is evident from the documents filed before us (Including the notes, the datasheet and the bills of entry) that that the procedure followed in the matter before us, merely involved scrutiny of documents by the Group Officers, raising and answering to same queries, putting up of the papers to the Collector, the Collector's acceptance of the licence and consequential completion of bill of entry followed by out-of-charge orders. The entire process, thus followed, obviously involves only administrative and executive steps. It clearly shows that there was no cause for initiating adjudication proceedings and none was in fact initiated (as already observed earlier).
27. In view of this position there was strictly speaking no need to go in to the question of compliance, with Section 153 required, in respect of service of orders/decisions etc. However, since this point has also been touched upon (by both the sides) I may mention, en passant, that it is undoubtedly essential to communicate any decision or order to the affected parties and such communication alone marks the conclusion of a legal proceeding. This is the settled law as rightly pointed by the Ld.
Counsels for the appellants. However, the Departmental communication takes several traditionally accepted forms. Thus, it is evident from the description of the procedure normally followed by the Department as per the Appraising Manual and briefly touched upon by the Ld. S.D.R.(and as also evident from the documents before us including the notes, the datasheet and the bills of entry) that it may not always be necessary to take recourse formally to Section 153, for the documents may simply exchange hands, inter se, between the Departmental officers and the importers (or their agents) during the normal course of administrative processing, with various decisions/orders, passed at various stages, usually recorded on the bill of entry itself (or the accompanying documents). Therefore, the communication become a sort of shuttling communication of an executive character interspersed between various steps involved in the processing of the bill of entry as a part of procedure followed for clearance of goods through the Customs.
28. In the instant case, evidently no formal 'order-in-original was passed in the conventional sense and the decision of the Collector (recorded on the notesheet) got communicated to the respondent in the normal course of processing of the bill of entry by way of suitable endorsement on the relevant documents at the proper stage and this order got implemented in due course by way of completion of bill of entry in accordance with the same and ultimately, by way of out-of-charge order under Section 47, passed by the proper officer in the docks.
29. Thus, whichever way one may look at it, the action taken in the matter before us amounts merely to an administrative/executive proceeding in which a decision has been taken by the Collector as an executive authority and not as an adjudicating authority.
30. In terms of Section 129, the Board was not competent to direct fling of an application before this Tribunal against such an order. The Board's order is, therefore, beyond jurisdiction and invalid as such.
Hence, the applications filed in pursuance thereof, are not maintainable. They are dismissed as such without going into the merits of the cases.