1992 (5) TMI 123 - AT - Customs

Summary

Issues Involved:

1. Legality of initiating proceedings under Section 129D(2) of the Customs Act based on material not part of the original adjudication record.
2. Competence of the Collector of Customs to direct a review based on new evidence.
3. Applicability of case law and precedents regarding the scope of review and revision powers.

Issue-wise Detailed Analysis:

1. Legality of initiating proceedings under Section 129D(2) based on new material:

The appellants, M/s. Senior Magnetics Ltd., imported Xenon Video Cassette Loader without an import license, leading to confiscation and a redemption fine by the Deputy Collector of Customs. Later, the Collector of Customs directed a review under Section 129D(2) based on new evidence suggesting under-invoicing. The appellants argued that initiating proceedings under Section 129D(2) should be confined to the original record and not based on new material. They cited several precedents, including the case of Gunvant and Others v. Collector of Central Excise, which held that revisional authorities could not restart investigations based on new evidence not part of the original record.

2. Competence of the Collector of Customs to direct a review based on new evidence:

The respondent countered that the valuation issue was part of the original adjudication record and that the Collector was competent to direct a review under Section 129D(2). They cited the Supreme Court's decision in Swastic Oil Mills Ltd. v. Deputy Commissioner Sales Tax, which allowed for additional enquiry by the revising authority to arrive at a proper decision. The Tribunal's decision in Bell Punch (India) Pvt. Ltd. was also referenced, supporting the view that the Collector could consider material outside the original record for review purposes.

3. Applicability of case law and precedents:

The Tribunal reviewed various decisions cited by both parties. It found no direct Supreme Court or High Court decision specifically interpreting Section 129D of the Customs Act. However, it noted that Section 129D is not merely a revision provision but a combination of revision and appeal, allowing for a broader scope of review. The Tribunal emphasized that while initiating proceedings, the authority could only consider the original record, but during the review, additional evidence could be admitted.

Separate Judgments:

Majority Opinion (G.A. Brahma Deva and K.S. Venkataramani):

The majority held that Section 129D(2) is a unique provision combining elements of both revision and appeal. It concluded that the initiation of proceedings must be based on the original record, not new evidence. The majority cited the Delhi High Court's decision in Gunvant and Others, which emphasized the finality of adjudicatory proceedings and the inadmissibility of new evidence for initiating reviews. Consequently, the appeal was allowed, setting aside the Collector's order directing a review based on new material.

Dissenting Opinion (P.C. Jain):

The dissenting member argued that Section 129D(2) allowed for a broader scope of review, including the consideration of new evidence. He cited the Supreme Court's decisions in K.M. Cheria Abdulla & Co. and Swastik Oil Mills, which permitted additional enquiry during review proceedings. He concluded that the Collector's direction for review based on new evidence was valid and within jurisdiction, and thus, the appeal should be dismissed.

Final Order:

In view of the majority opinion, the appeal was allowed, and the Collector's order directing a review based on new evidence was set aside. This decision was without prejudice to any other remedy available to the Department under the Act for re-opening the assessment made by the Deputy Collector of Customs or lower authority.