Abi International, Rep. by Its Proprietor Madhu Valluri Vs. Additional Commissioner of Customs (imports) and ors. - Court Judgment

Excerpt:
customs - imported goods - article 226 of constitution of india, customs act, 1962 and section 3 (3) of foreign trade (development and regulation) act, 1992 - petition sought to dismiss impugned order which confiscated and imposed penalty for goods imported by petitioner - goods imported by petitioner considered as office equipments - petitioner entitled to alternative remedy before appellate authority - appellate authority empowered to pass interim relief including release of goods - apprehension of petitioner that he would not get substantial justice before appellate authority is totally misconceived and unwarranted - court advised petitioner to file appeal and interim application for release of goods before appellate authority - direction given to appellate authority to dispose.....orderp.d. dinakaran, j. 1. heard mr. k. subramanian, learned senior counsel appearing for the petitioner and mr. v.t. gopalan, learned additional solicitor general appearing for the respondents at length.2. in brief, an adjudication proceedings was initiated by the commissioner of customs - second respondent herein against the petitioner with respect to the alleged import of 248 numbers of used/second hand computer systems, 3 used colour monitors, 2 key boards and a mouse from goodwill electronics, singapore, and as to whether the goods imported were covered by para 5.3 of the exim policy 1997-2002 as per which, all the second hand/used goods shall be restricted for import and may be allowed only in accordance with provisions of the policy, public notice or license issued in this behalf......

Judgment:
ORDER

P.D. Dinakaran, J.

1. Heard Mr. K. Subramanian, learned Senior Counsel appearing for the petitioner and Mr. V.T. Gopalan, learned Additional Solicitor General appearing for the respondents at length.

2. In brief, an adjudication proceedings was initiated by the Commissioner of Customs - second respondent herein against the petitioner with respect to the alleged import of 248 numbers of used/second hand computer systems, 3 used colour monitors, 2 key boards and a mouse from Goodwill Electronics, Singapore, and as to whether the goods imported were covered by para 5.3 of the EXIM Policy 1997-2002 as per which, all the second hand/used goods shall be restricted for import and may be allowed only in accordance with provisions of the Policy, Public Notice or license issued in this behalf. In other words, inasmuch as the importers do not possess any valid license, the import is in violation of the EXIM policy and Customs Act, 1962.

3. The Adjudicating Authority, viz., the Commissioner of Customs, by order dated 17.4.2002 held against the petitioner holding that the goods referred to above imported by the petitioner are covered by para 5.3 of the EXIM Policy and they are liable to be confiscated under Section 111(d) of the Customs Act r/w Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992, as the petitioner/importer do not possess any valid license for importing the impugned goods, even assuming their claim to be second hand/used goods.

4. Against the said order of the second respondent dated 17.4.2002, an appeal in C/259/2002 was preferred by the petitioner before the Customs, Excise and Gold (Control) Appellate Tribunal - the third respondent herein (CEGAT for brevity) and the said CEGAT by order dated 5.11.2002 set aside the order of the Adjudicating Authority, viz., the Commissioner of Customs, dated 17.4.2002 and remitted the matter to the Commissioner of Customs, in the light of the submissions made by the learned counsel for the writ petitioner himself, who sought for remand of the matter to the Commissioner of Customs for re-consideration of the pleas in terms of the proceedings of the Director General of Foreign Trade, dated 14.6.2002, with reference to the entitlement of the petitioner to clear the goods imported as 'capital goods'. Accordingly, the CEGAT by order dated 5.11.2002 remitted the matter to the Commissioner of Customs for de novo consideration.

5. Thereafter, the Government of India, Ministry of Finance & Company Affairs, (Department of Revenue), Central Board of Excise & Customs, New Delhi, by Circular No.87/2002-CUS dated 17.12.2002, re-notified the jurisdiction of the Adjudicating Authorities and the same reads as follows:

Government of India

Ministry of Finance & Company Affairs

(Department of Revenue)

Central Board of Excise & Customs

New Delhi,

the 17th December, 2002.

To,

All Chief Commissioners of Customs,

All Chief Commissioners of Customs & Central Excise,

All Commissioners of Customs,

All Commissioners of Customs & Central Excise,

Director General, Directorate of

Revenue Intelligence.

Subject: Powers of Adjudication of Additional/ Joint Commissioners of Customs - regarding.

---Sirs,

I am directed to invite your attention to the Board's telex of even number dated 13.5.1992 and instructions contained in Circular No.47/97 dated 6.10.1997 regarding the powers of adjudication of officers of Customs and to state that a need has been felt to increase the powers of adjudication of officers of Customs. Therefore, in partial modification of aforesaid instructions, it has been decided that in cases where the duty has not been levied or has been short levied or erroneously refunded because of collusion, wilful mis-statement or suppression of facts, etc. and where the duty involved is upto Rs. 20 lakhs, the show cause notices may be decided by the Additional Commissioners of Customs. Similarly, the Joint Commissioners of Customs may decide the show cause notices involving duty upto Rs. 10 lakhs.

2. As for other cases i.e. the show cause notices where the extended period if not invoked, as per the existing instructions the Additional Commissioners of Customs and Joint Commissioners of Customs are authorised to adjudicate the cases upto a value limit (value of goods) of Rs. 10 lakhs. The value limit has been raised to Rs.20 lakhs. In other words, the Additional Commissioner of Customs and Joint Commissioner of Customs can now adjudicate cases upto a value limit (value of goods) of Rs. 20 lakhs.

These instructions may be brought to the notice of all concerned by way of issuance of suitable Public Notice/Standing Order.

Difficulties, if any, in implementation of the Circular may be brought immediately to the notice of the Board.

Kindly acknowledge receipt of the Circular.

Sd/.

Under Secretary to the

Govt. of India.

6. As per the said Circular dated 17.12.2002, the Additional Commissioner of Customs is empowered to adjudicate the impugned matter after the order of remittance dated 5.11.2002 by the CEGAT.

7. Pursuant to the orders of remittance dated 5.11.2002, the Additional Commissioner (Imports) - the first respondent herein passed the impugned order dated 6.5.2003 holding that the imported items viz., used computer, monitors and mouse, valued at Rs. 10,85,190/- are to be considered as office equipments other than the capital goods and therefore confiscated the same under Section 111(d) of the Customs Act, and further imposed a penalty of Rs.1,00,000/- on the petitioner under section 112(a) of the Customs Act. Of course, the impugned order of the first respondent dated 6.5.2003 itself provides for an appeal remedy before the Commissioner (Appeals), Customs House, Chennai-1, within sixty days from the date of communication of the said order dated 6.5.2003.

8. Aggrieved by the said order dated 6.5.2003, the petitioner has preferred the above writ petition seeking a writ of Certiorarified Mandamus to call for the records of the first respondent in his order No. 535 of 2003 dated 6.5.2003, quash the same and consequently to direct the respondents to apply the EXIM Policy 1997-2002 to the import of 248 numbers of used second hand computer systems, 3 numbers of used colour monitors, 2 numbers of key boards and a mouse pursuant to Bill of Entry No. 385759 dated 22.3.2002 supplied by M/s. Goodwill Electronics, Singapore, under Invoice No. GG-002 dated 21.1.2002 and to declare the said import is covered by para 5.3 of the EXIM Policy, 1997-2002 read with para 5.4 of the Handbook of Procedures.

9. When the matter came up for admission on 15.9.2003, Mr. V.T. Gopalan, learned Additional Solicitor General, took notice on behalf of the respondents and submitted that the petitioner has got an effective alternative remedy before the Commissioner (Appeals) as stated in the impugned order itself and hence, the matter was adjourned to today for a detailed argument in this regard.

10.1. Today, Mr. K. Subramanian, learned Senior Counsel appearing for the petitioner, contends that when the CEGCAT by order dated 5.11.2002,made in Appeal No. C.259/2002, remitted the matter for a fresh de novo enquiry, which would only mean that the de novo enquiry should be conducted by the same authority, who had been assigned to conduct the de novo enquiry by the Appellate Authority, viz., the Commissioner of Customs and therefore, the Additional Commissioner of Customs ought not to have adjudicated the matter. Hence, the impugned order suffers for want of jurisdiction.

10.2. My attention was also invited to the meaning of 'de novo enquiry' as per the Black's Law Dictionary, which reads as follows:

' Generally, a new hearing or a hearing for the second time, contemplating an entire trial in same manner in which matter was originally heard and a review of previous hearing. Trying matter anew the same as if it had not been heard before and as if no decision had been previously rendered.'

10.3. The second contention of the learned Senior Counsel appearing for the petitioner is that the Circular dated 17.12.2002 will not supersede the provisions of the Act, viz., the scheme of the Act, where the Commissioner of Customs is the Adjudicating Authority, the CEGAT alone is the Appellate Authority and when the CEGAT - Appellate Authority directed the original Adjudicating Authority, viz., the Commissioner of Customs to hold a de novo enquiry, only the Commissioner of Customs ought to have conducted the de novo enquiry and by violating the above direction by passing the impugned proceedings dated 6.5.2003 by the Additional Commissioner of Customs, and directing the petitioner to file an appeal against the impugned proceedings dated 6.5.2003 before the Commissioner of Customs, would confer the powers of the appellate authority viz., CEGAT on the original authority himself viz., Commissioner of Customs to decide the matter on appeal, which amounts to abrogation of powers conferred on the statutory authorities.

10.4. Thirdly, the learned Senior Counsel appearing for the petitioner, based on the decisions of the Apex Court in Popular Planation vs . State of Karala, reported in : AIR1991SC1232 ; Pankaj Bhargava vs . Mohinder Nath, reported in : AIR1991SC1233 ; and Mohasinali Merchant vs. Shyamlal and others, reported in (2000) 9 SCC 734, contends that the right of alternative remedy should not be construed as an obstacle to render substantial justice to the parties and finally it is contended that the goods of the petitioner are lying for more than 18 months in the warehouse and they are entitled to the release of the goods by way of interim arrangement.

11. Per contra, Mr. V.T. Gopalan, learned Additional Solicitor General appearing for the respondents, inviting my attention to Sections 2(1), 2(8) and 128 of the Customs Act, contends that the order dated 6.5.2003 passed by the Additional Commissioner of Customs is well within the jurisdiction in the context of the Circular dated 17.12.2002 and therefore, the petitioner cannot have any grievance to prefer an appeal before the Commissioner (Appeals), who is not the same Adjudicating Authority, who passed the order dated 17.4.2002 originally.

12. I have given a careful consideration to the submissions of both sides.

13.1. From the perusal of the records, I find that the order dated 17.4.2002 was passed by the Commissioner of Customs and not by the Commissioner (Appeals), as rightly pointed out by the learned Additional Solicitor General.

13.2. As per Section 2(1) of the Customs Act, 'Adjudicating Authority' means any authority competent to pass any order or decision under this Act, but does not include the Board, [Commissioner (Appeals)] or Appellate Tribunal; and as per Section 2(8), the 'Commissioner of Customs', except for the purposes of Chapter XV, includes an Additional Commissioner of Customs.

13.3. Chapter XV deals with the provisions relating to the appeals and revisions. Section 128 of the Customs Act reads as follows:

'Appeals to [Commissioner (Appeals)] (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a Commissioner of Customs may appeal to the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order:

Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.

(2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf.

13.4. It is not in dispute that the power of the Government to re-notify the jurisdiction for the purpose of adjudication, relied upon by the respondents in Circular dated 17.12.2002, was not challenged at any point of time. Even though the CEGAT allowed the appeal and remitted the matter to the Commissioner of Customs, it is apparent that thereafter the said Circular dated 17.12.2002, re-notifying the jurisdiction of the Adjudicating Authority, viz., the Additional/Joint Commissioner of Customs, Commissioner of Customs came into force. Once such power of the Appellate Authority is valid in law, unless the same is set aside in a manner known to law, I am of the considered opinion, as rightly pointed out by the learned Additional Solicitor General, the jurisdiction of the Appellate Authority in the order dated 24.6.2002 remitting the matter to the Commissioner has to be read only with Circular dated 17.12.2002 and Sections 2(1), 2(8) and 128 of the Customs Act.

13.5. In the instant case, the Additional Commissioner is empowered to act as an Adjudicating Authority as per section 128 of the Customs Act for the purpose of adjudication into the matter in view of the Circular dated 17.12.2002. But, still the Commissioner (Appeals) is vested with the appellate jurisdiction as per Section 128 of the Act, in view of Section 2(8) of the Act, whereunder the Commissioner of Customs, except for the purpose of Chapter XV, includes an Additional Commissioner of Customs. Therefore, in my considered opinion, the Additional Commissioner of Customs is well within the jurisdiction to conduct the de novo enquiry and to pass the impugned order dated 6.5.2003 and the Commissioner (Appeals), who is excluded from the meaning of adjudicating authority as per Section 2(1) of the Act, being an appellate authority, could exercise the powers of the appellate authority in Chapter XV of the Act in view of Section 2(8) of the Act.

13.6. If the petitioner is still aggrieved, he is at liberty to file an appeal before the Commissioner (Appeals) under Section 128 of the Act, as I am unable to appreciate the argument that the same original authority has now been empowered to decide the appeal for the simple reason that the original order dated 17.4.2002 was passed by the Commissioner of Customs, but not by the Commissioner (Appeals) as per Section 128 of the Act.

13.7. The definition of de novo enquiry that the entire trial should be held for second time or the new hearing or the hearing of the second time should be held in the same manner will not mean by the same official, particularly when the jurisdiction of the authorities have been re-notified, which remains unchanged.

14.1. With regard to the other contention of Mr. K. Subramanian, learned Senior Counsel for the petitioner, placing reliance on the decisions of the Apex Court (cited supra), that while exercising the powers under Article 226 of the Constitution of India, the plea of alternative remedy should not be an obstacle to render substantial justice, in my considered opinion, when the Appellate Authority is empowered to pass any interim relief including the release of goods, as provided under the Customs Act itself, the apprehension of the petitioner in this regard that he would not get substantial justice before the Appellate Authority, is totally misconceived and unwarranted.

14.2. Under the above facts and circumstances of the case, except to permit the petitioner to prefer a statutory appeal before the Commissioner (Appeals) and also file an interim application seeking release of the goods, if he is so advised, and to direct the Appellate Authority, viz., the Commissioner (Appeals), to consider the interim application of the petitioner for the release of the impugned goods, pass appropriate orders within 30 days from the date of receipt of appeal and to dispose of the main appeal within ninety days from the date of receipt of appeal, no further order is required in the above writ petition.

With the above direction, the writ petition is disposed of. No costs. Consequently, WPMP. No. 19856 of 2003 is closed.