1987 (11) TMI 218 - AT - Customs

Issues Involved:
1. Jurisdiction of the Collector of Customs (Appeals)
2. Compliance with re-export conditions and enforcement of bond
3. Nature of the amount demanded (duty, penalty, or fine)
4. Denial of natural justice and procedural fairness
5. Competency of the Assistant Collector to adjudicate the matter

Issue-wise Detailed Analysis:

1. Jurisdiction of the Collector of Customs (Appeals):
The Collector of Customs (Appeals) dismissed the appeal on the grounds of lacking jurisdiction, stating, "The main issue in this case is whether the case falls within the jurisdiction of the Collector of Customs (Appeals)." The Collector reasoned that the bond was in pursuance of Notification No. 97-Cus., dated 2.5.1979, making it a Customs duty issue, thus outside his jurisdiction. However, the judgment found this view incorrect, stating, "The Collector (Appeals) has jurisdiction to hear the appeal and he ought to have considered the appeal on merit."

2. Compliance with Re-export Conditions and Enforcement of Bond:
The appellants imported 40 empty containers with a condition to re-export them within 15/30 days. Despite re-exporting 37 containers by 3.5.1983 and the remaining 3 by 9.5.1983, the Assistant Collector issued a detention order on 20.5.1983 and demanded Rs. 9,50,000/- for non-compliance. The judgment noted, "The Assistant Collector did not consider the request made by the Appellants for extension of time for re-export," highlighting the arbitrary nature of the enforcement.

3. Nature of the Amount Demanded (Duty, Penalty, or Fine):
The Assistant Collector's order was vague regarding whether the amount demanded was duty, penalty, or fine. The judgment stated, "He did not spell out whether it was the fine amount in lieu of confiscation or it is penalty or it is fine and penalty or fine/penalty and duty." This ambiguity necessitated a remand for clarification.

4. Denial of Natural Justice and Procedural Fairness:
The judgment emphasized the denial of natural justice, stating, "The Assistant Collector acted arbitrarily. It was a clear case of denial of principles of natural justice." The appellants were not given a fair opportunity to present their case, and their request for an extension due to a strike at the manufacturing unit was not considered. The judgment cited Supreme Court precedents, including Swadeshi Cotton Mills v. Union of India, to underscore that decisions made in violation of natural justice are null and void.

5. Competency of the Assistant Collector to Adjudicate the Matter:
The Assistant Collector's competency was questioned as the value of the goods liable to confiscation exceeded Rs. 25,000/-. The judgment concluded, "The adjudication order of the Asstt. Collector on this ground alone is null and void." The matter was remanded for fresh consideration by a competent authority.

Conclusion:
The judgment set aside the orders of the Assistant Collector and the Collector (Appeals), remanding the matter for fresh consideration. The competent authority was directed to consider the genuineness of the appellants' request for an extension, the effect of the re-export, and whether any amount could still be demanded. The fresh adjudication was ordered to be completed within six months.

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