2007 (6) TMI 222 - HC - Customs

Rails - Departmental clarification - Held that - Section 151A of the Customs Act confers the power to issue direction only with respect to classification of the goods and with respect to levy of customs duty so long as it does not affect the quasi-judicial power of the authorities. The Board has no power to interfere with the quasi-judicial powers of assessing officer or for that matter the appellate authority or revisional authority. In our opinion, the impugned Circular is beyond the powers conferred on the Board under Section 151A of the Act and the same is liable to be quashed and set aside - appeal allowed.

Summary

Issues Involved:
1. Validity of Circular No. 8 of 2006 issued by the Central Board of Excise and Customs.
2. Classification of "used steel rails" under the Customs Tariff Act, 1975.
3. Quasi-judicial authority of assessing officers versus administrative directions.

Detailed Analysis:

1. Validity of Circular No. 8 of 2006:
The appellant challenged Circular No. 8 of 2006, arguing that it was violative of Articles 14, 19(1)(g), and 265 of the Constitution of India and Section 151A of the Customs Act, 1962. The court examined whether the circular exceeded the powers conferred on the Board under Section 151A, which allows issuing directions for uniformity in classification and levy of customs duty without affecting the quasi-judicial powers of the authorities. The court concluded that the impugned circular interfered with the quasi-judicial powers of the assessing officer, thus rendering it beyond the Board's authority and liable to be quashed.

2. Classification of "Used Steel Rails":
The core issue was whether "used steel rails" should be classified under Chapter Heading 72.04 as 'ferrous waste and scrap' or under Chapter Heading 73.02 as 'used rails.' The earlier Circular No. 1/2005-Customs classified "used steel rails" under CTH 72.04, making them freely importable. However, Circular No. 8/2006 reclassified them under CTH 73.02, which attracts higher duties and requires an import license. The court observed that the classification of the goods is a factual determination that should be made by the assessing authorities and not pre-determined by the Board's circular.

3. Quasi-Judicial Authority of Assessing Officers:
The court emphasized that assessing officers function as quasi-judicial authorities and their decisions should not be controlled by administrative directions. Citing precedents such as "Orient Paper Mills Limited v. Union of India" and "Tata Teleservices Limited v. Commissioner of Customs," the court reiterated that quasi-judicial powers cannot be overridden by Board directives. The court held that the impugned circular pre-determined the classification issue, which should be independently adjudicated by the assessing officers.

Conclusion:
The court allowed the writ appeal, quashing Circular No. 8 of 2006. The judgment underscored that the assessing officer must independently consider the classification of "used steel rails" without being influenced by the Board's circular. The decision reinforced the principle that quasi-judicial authorities must act independently and impartially, free from administrative interference.