1. This appeal arises as under: The respondents herein imported 1053 drums palm oil valued at Rs. 14,22,925/-cif and sought clearance against 8 REP licences. They also placed reliance on para 131(1) of the Policy AM-81 and para 138(1) of the Policy AM-82.
2. The Customs House objected to the clearance on the ground that one of the licences, which was subject to value and restriction, had been already utilised for the import of Mutton Tallow. In respect of the other licences the objection was that the goods were canalised items and therefore not permissible to be imported by any agency other than the canalising agency.
3. The Collector of Customs, who held the adjudication after duly complied with the procedural aspects held that the goods valued at Rs. 39,401/- was covered by the licence and the goods to the extent of Rs. 13,83,523.90 have been imported without cover of a valid licence. He therefore ordered confiscation but allowed redemption on payment of fine of Rs. 10,00,000/-. On appeal, the Central Board of Excise and Customs held that all the 8 licences produced by the appellants were fully valid to cover the importation. The Board directed that the licences be accepted as fully valid and clearance granted to the consignment imported. The Central Government exercised its review power under Section 131(3) of the Customs Act as it then stood. It issued a show cause notice dated 8-10-1982 to the respondents herein, calling upon the respondents as to why the order of the Board should not be set aside and appropriate orders passed in accordance with the law.
4. After the constitution of the Customs, Excise and Gold (Control) Appellate Tribunal on 11-10-1982, the proceeding initiated by the Central Government under Section 131(3) of the Customs Act was transferred to the Tribunal apparently under Section 131(B)(2) of the Customs Act. After the receipt of the records the proceeding sc transferred was registered in the registry of the Tribunal as an appeal. Hence this appeal.
5. During the hearing of this appeal, Shri S.D. Nankani, the learned advocate appearing for the respondents raised a preliminary objection regarding the maintainability of the appeal. He contended that the show cause notice issued under Section 131(3) was dated 8-10-1982. It was posted by registered post on the same date as per the date stamp on the postal cover. But then, the said notice was received by the respondents on 12-10-1982. He urged that having regard to the date of receipt of the notice by the respondents it cannot be said that any proceeding was pending before the Central Government on the appointed date viz.
11-10-1982. If no proceeding was pending before the Central Government on the appointed date, the question of transfer to the Tribunal would not arise. Shri Nankani urged that proceedings under Section 131(3) of the Customs Act as it stood before its amendment by Finance Act 2 of 1980 are deemed to have commenced on giving of a notice to the person affected. In that connection Shri Nankani placed reliance on the decision of the Tribunal reported in 1986 (25) ELT 327. - The Collector of Customs and Central Excise, Rajkot v. Cotton Corporation of India and Ohters. The further submission of Shri Nankani was that the notice can be said to have been given only when the notice is actually served on the party. Since the service was effected only on 12-10-1982 that date will have to be reckoned as the date on which the proceeding under Section 131(3) had commenced. He urged that on 12-10-1982, Section 131(3) as it stood prior to the Finance Act, 1980 (Act 2 of 1980) stood repealed and the new provisions did not confer power of review on the Central Government. He, therefore, prayed that the appeal may be rejected.
6. As to what is meant by "giving of notice", Shri Nankani placed reliance on the following decisions :-K Narasitnhiah v. H.C. Singri Gowda and Ors..
(2) AIR 1972 Gujarat 126 -Ambalal Morarji Soni v. Union of India and Ors..
(3) 1987 (28) ELT 469 (Tri.) - Collector of Customs, Bombay v. Presto Works, Jalandhar.
7. Shri Mondal, appearing for the appellant Collector did not dispute lhat the notice issued under Section 131(3) was served on the respondents only on 12-10-1982.
8. The short question for our consideration is whether there was validity initiated proceeding pending on 11-10-1982 before the Central Government.
9. Section 131(3) as it then stood conferred suo motu revisional power on the Central Government. Sub-section 3 of Section 131 reads :- "The Central Government may of its own motion annul or modify any order passed under Section 128 or Section 130." "No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value shall be passed under this Section - (a) in any case in which an order passed under Section 128 or Section 130 has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value; and (b) in any other case, unless the person affected by the proposed order has been given notice to show cause against it, within one year from the date of the order sought to be annulled or modified." 10. It is thus seen that giving of a show cause notice is a must before the Central Govenment exercises its suo moto revisional power.
"Every proceeding which is pending immediately before the appointed day before the Central Government under Section 131, as it stood immediately before that day, and any matter arising out of or connected with such proceeding and which is so pending shall stand transferred on that day to the Appellate Tribunal and the Appellate Tribunal may proceed with such proceeding or matter from the stage at which it was on that day as if such proceeding or matter were an appeal filed before it." 12. What statutorily stand transferred to the Tribunal is the proceeding which is pending before the Central Government under Section 131 immediately before the appointed date.
13. According to the contention of Shri Nankani, since the show cause notice was given to the respondents only on 12-10-1982, no proceeding under Section 131(1) was pending before the Central Government and therefore nothing stand transferred to the Tribunal.
He contended that the proceeding could be said to have been commenced only on 12-10-1982 the date on which the show cause notice under Section 131(3) was served on the respondents. It is the validity of this contention that determines the fate of this appeal.
14. The issue of show cause notice for initiation of proceeding appears in more than one Section of the Customs Act. Section 28(1) requires service of notice within the periods specified therein to collect duty which has not been levied or has been short levied or erroneously refunded. The expression used in that Section is "serve notice on the person chargeable with the duty".
15. Section 110 authorises seizure, of goods, documents and things which are liable to confiscation under the Act. Sub-section 2 of Section 110 reads :- "Where any goods are seized under Sub-section (1) and no notice in respect there of is given under Clause (a) of Section 124 within six months of seizure of the goods, the goods shall be returned to the persons from whose possession they were seized;" Section 124 provides that no order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty.
16. Section 128 which provides for an appeal to the Collector (Appeals) and Section 129A which provides for appeals to the Appellate Tribunal and Section 129DD which provides for revision application to the Central Government require the aggrieved person to file an appeal or an application within three months from the date of communication of the order appealed against. Sub-section 4 of Section 129A which provides for filing cross-objection by a respondent within 45 days from the receipt of the notice that an appeal has been preferred.
Sub-section 4 of Section 129D requires the adjudicating authority or the authorised officer to make an application to the Appellate Tribunal or the Collector (Appeals) within a period of three months from the date of communication of the order made by the Board or by the Collector as the case may be.
17. Under Section 130(1) which provides for reference, the applicant is required to make the application within 60 days of the date upon which he is served with notice of an order under Section 129B. The said Sub-section requires the Appellate Tribunal to draw up a statement of the case and to refer the questions of law to the High Court within 120 days of the receipt of the application. Sub-section 2 of this Section confers a right on the respondent to file a cross-obiection within 45 days of the receipt of the notice from filing of the reference application.
18. Section 153 prescribes the mode of service of notice issued under the Act. The mode prescribed are - (ii) or sending it by registered post to the person for whom it is intended or to his agent; and (iii) if the notice cannot be served on him in the above said manners, by affixing it on the notice-board of the Customs House.
19. From the various provisions relating to the notice it is seen that the expres-sions used in different sections are different.
Excepting in the matter of filing of the appeals, revision application and reference application, the actual service of notice appears necessary to initiate proceedings. In the case of appeals, revision application and reference application, it is sufficient if the impugned order is communicated. The actual service of the impugned order may not be necessary for reckoning the period of limitation for filing the appeals and reference application. But in all other cases, the actual services of notice is not only contemplated by the expressions used in the various sections but also from the scheme of the provisions.
20. As has been seen earlier under! the old Section 131 (3) the show cause notice is required to be given before exercising the power conferred on the Central Government.Collector of Customs and Central Excise, Rajkot v. Cotton Corporation of India and Ors. - [1986 (25) ELT 327] the majority of the Members of the Special Bench 'D' held that giving of a notice under Section 131(3) is a must for valid initiation of proceedings under that Sub-section. In the said decision, the actual sending of notice took place on 12-10-1982 and therefore the majority of the Members held that the notice cannot be said to have resulted in the valid initiation of proceedings under Section 131(3). of the Customs Act before the appointed day. The Bench, however, did not examine the question as to the connotation of giving a notice.
22. In the case of Collector of Customs, Bombay v. Presto Works, Jalandhar -1987 (28) ELT 469 (Tri.) the Special Bench 'B2' held that - "A plain reading of the relevant provisions of Section 28 of the Customs Act makes it clear that what is required to be accomplished within six months is not the 'issue' of notice but 'service' of notice on the person concerned. Further where the demand notice is sent by registered post, the Post Office is to be treated as an agent of the sender, and therefore, the date of mere sending over of the registered letter containing notice, to the Post Office would not be relevant but the date on which it is served on the addressee." For taking the above view the Bench had relied upon the earlier judgment of the Tribunal reported in 1986 (23) ELT 492 - Jayashree Textiles & Industries, Rishra v. Collector of Customs, Calcutta.In K. Narasimhiah v. H. C. Singri Gowda and Ors. - AIR 1966 S.C. 330 -the Supreme Court considered the contention that the sending of the notice amounted to giving the notice. The Supreme Court observed - "Giving" of anything as ordinarily understood in the English language is not complete unless it has reached the hands of the person to whom it has to be given. In the eye of law however "giving" is complete in many matters where it has been offered to a person but not accepted by him. Tendering of a notice is in law therefore giving of a notice even though the person to whom it is tendered refuses to accept it. Thus as soon as the person with a legal duty to give the notice despatches the notice to the address of the person to whom it has to be given, the giving is not complete." 24. The Division Bench of the Gujarat High Court in the case of Ambalal Morarji Soni v. Union of India and Ors. - AIR 1972 Guj. 126 elaborately considered the con notation of the expression "giving of a notice" contemplated by Section 110(2) of the Customs Act and Section 124 of the said Act as well as Section 79 of the Gold (Control) Act. The Gujarat High Court also referred to the provisions of Section 153 of the Customs Act. After referring to the decision of the Supreme Court in the case of Narasim-hiah v. H.C. Singri Gowda and Ors. the Gujarat High Court observed - "The giving of the notice is hot complete unless and until it reaches the person concerned or its actual tender to him. Merely despatching of the notice to the address of the person does not complete the giving of the notice." 25. Since the giving of the notice in the instant case to the respondents was only on 12-10-1982, we accept the contention of Shri Nankani that there was no valid initiation of the proceeding by the Central Government before the appointed date. After the appointed date, the Central Government was not vested with the power of revision. In the circumstances, no action can be taken against the respondents herein in pursuance of the notice issued on 8-10-1982 but received by the respondents on 12-10-1982.