9911796707
TMI Blog1987 (7) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appellants imported the consignment which was sold by the Customs authorities in auction and since they could not obtain the release of the confiscated goods, the Tribunal in their order dated 17-11-1983 observed that the applicants would be entitled to receive the sale proceeds after deducting the expenses of the sale and the duty leviable on the goods. The respondent was directed to give effect to the order within three months. It is with reference to this order that the present application has been filed by M/s. Prabhat General Agencies. 2. Learned Advocate, Shri J.R. Gagrat submitted that this application was made with a view to securing full implementation of the Tribunal s order. He read out the operative part of the Tribunal s order in paras 13 to 15 of the order. He added that the Collector had filed a reference application under Section 130(1) of the Customs Act with regard to this order and this had also been rejected by the Tribunal vide the Tribunal s order, dated 25-7-1984, a copy of which was submitted for ready reference, during the course of the hearing. After the Tribunal s order, the applicants applied to thte Customs authorities for the grant of the Deten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a duty cast on the Customs authorities under Sections 17 and 45. Hence In the present case the Collector of Customs was bound to grant the detention certificate for the full period as mentioned in the application of M/s. Prabhat General Agencies. The detention certificate granted from 11 -9-1981 to 20-10-1981 was not correct as these dates did not have any relevance. Shri Gagrat would urge the Tribunal to issue the directions to the Collector for issue of the detention certificate for the entire period in view of the provisions of Section 129B read with Rule 41 of the CEGAT Procedure Rules. This was a matter incidental to the Tribunal s order and he would rely on the ratio of the Supreme Court s decision in the case of Income Tax Officer v. Mohammed Kunhi (1969) 71 ITR 815. Shri Gagrat also submitted that the provisions of Section 129B were pari materia with the corresponding provisions of Section 254 of the Income Tax Act. Shri Gagrat submitted that by their letter, dated 19-11 -1985 addressed to the Principal Collector of Customs, the applicants had requested for the issue of the detention certificate for the full period but instead the detention certificate was issued under si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the decision of Tarachand Gupta 1983 E.L.T. 1546 and in the case of M/s. Bayer India 1986 (25) E.L.T. 689 (Tri.) - ECR 1986 (8) page 301. He further contended that the question of detention certificate was never raised when the appeal of M/s. Prabhat General Agencies was heard by the Tribunal and the Tribunal was not the proper forum to agitate this issue. In case the applicants were aggrieved by a limited detention certificate they could have approached the higher authorities in the Customs Department. In this behalf, Shri Pal relied on the Tribunal s decision in the case of Miles (India) Ltd. 1983 ECR 242-D para 33, to urge that the Tribunal was functioning within the Customs Act and that it could not go beyond Its ambit M/s. Prabhat General Agencies presented the Bill of Entry on 24-3-1981 and this was returned to the CHA after noting. The CHA presented the Bill of Entry to Licence Section on 22-8-1981. The Custom House could not be responsible for the delay between these two dates. In the meanwhile, the importer had changed the CHA. At the most the delay could be ascribed to the Custom House between 22-8-1981 and the issue of the show cause notice on 11-9-1981. The applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is an incidental function. In this behalf, the learned Advocate has relied on the judgments of the Madras and Bombay High Courts and also the Supreme Court. So far as the judgment of the Madras High Court is concerned, it is seen that this was a full Bench decision in which the Madras High Court held that it was the statutory duty of the Customs Officer under Rule 13 of the Scales of Rates of Madras Port Trust. A reading of the judgment indicates that under this Rule a Customs Officer has been made responsible for the issue of the Detention Certificate. However, the judgment of the High Court has very clearly held that the grant of detention certificate was not appealable under old Section 128 of the Customs Act. Though, therefore, the issue of the detention certificate comes within the statutory duties of the Customs officer, it is not enjoined under the Customs Act but under a different law or rule altogether. The judgment also held very rightly that this was not a matter which could be covered by the provisions of old Section 128 of the Customs Act. On the other hand, the scope of appeals to the Tribunal have been set out in Section 129A of the Customs Act. None of these sco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s very explicit in this behalf. On the aforesaid considerations, the ratio of the Supreme Court s decision in the case of Mohammad Kunhi, therefore, does not apply to this application. It would be further seen that though the application, dated 19-11-1985 was addressed to the Principal Collector of Customs, the detention certificate, dated 3-1 -1986 was issued by the Asstt. Collector only. As observed by the learned S.D.R., the file was not even put up to the Principal Collector for any decision on the applicant s letter, dated 19-11-1985. If, therefore, the decision in this behalf was required to be made under the Customs Act by the Principal Collector of Customs, such a course of action would not have been possible. These facts further show that the matter relating to the issue of the detention certificate is not a statutory function of the Customs Officer under the Customs Act. It cannot, therefore, be appealable to the Tribunal which has to function within the four corners of the Customs Act. This view has been held consistently by this Bench of the Tribunal which have rejected any request for grant of detention certificates. The learned Advocate himself had argued this point i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cancelled, namely, on 10-3-1981 .Since the import had taken place prior to the date of cancellation, this Bench held that the order of confiscation was bad in law and accordingly the Bench set aside the orders passed by the Addl. Collector and the Board. Since the appellants did not redeem the goods, the goods were disposed of by the Customs authorities in auction. The Bench while allowing the appeal observed that the appellants would be entitled to receive the sale proceeds after deducting the expenses of sale and the duty leviable on the goods. 9. After the Tribunal s order, the Customs Department ordered refund of Rs. 4,83,652.87. It appears the Port Trust authorities had collected Rs. 1,59,089.88 as demurrage charges. With a view to claim refund of the said demurrage charges, the appellants by their letter, dated 9-6-1984 requested the Collector to issue a detention certificate for the period from 24-2-1981 to 29-11-1981, from the date of general landing till the last date of removal of the consignment to the Customs warehouse. After several requests, the Asstt. Collector of Customs, Group C issued an ITC Detention Certificate, dated 3-1-1986 granting detention for the peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained for the customs purposes. Since the customs had issued a detention certificate from 11-9-1981 to 20-10-1981, it can be assumed that the customs did consider the said period as the period during which the goods were detained for customs purposes. The liability to grant detention certificate arises if at all, from the date of entering the Bill of Entry and not from the date of landing of the goods. The effective date of presentation of the Bill of Entry was 22-8-1981. The permission to bond the goods under Section 49 was finally granted on 20-10-1981. Therefore, the detention of the goods for customs purposes could be for the period from 22-8-1981, the date of effective presentation of the Bill of Entry, to 20-10-1981, the date of return of Bill of Entry with permission to bond. Therefore, it is not clear why the Customs did not grant the detention certificate for the period 22-8-1981 till 11 -9-1981, the date on which the show cause notice was issued. If in law, there is a duty cast on the Customs authorities to issue a detention certificate, then in the instant case, the said certificate should have been issued for the period commencing from 22-8-1981 till 20th October, 1981 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of a detention certificate arose only after the Tribunal s order. The appellants could not have anticipated at that stage that the customs authorities would refuse to grant the certificate for the period during which the goods were under detention for customs purposes. The necessity to approach theTribunal arose only when the customs authorities refused to grant the certificate. Shri Pal, the learned Departmental representative had contended that the issue of a detention certificate is entirely within the discretion of the customs authorities. He has further contended that the detention certificate was recommendatory in nature and the Bombay Port Trust was not bound to accept this. He has further contended that Rule 41 of the Cegat Procedure Rules cannot travel beyond the Customs Act. In that connection, Shri Pal had also relied on the Tribunal s decision in the case of Miles (India) Ltd., 1983 E.C.R. 242-D. 14. Brother Dilipsinhji in his order posed a question as under: The main question which comes up for consideration is whether the Tribunal is competent to go into the aspect of the grant of detention certificate". After referring to Rule 41 of the Cegat Procedure Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained for customs purposes and whether such a direction could be issued. Rule 41 of the Cegat Procedure Rules empowers the Tribunal to make such order or issue of direction as may be necessary or expedient to give effect to the orders or to prevent the abuse of its process or to secure the ends of justice. If the Customs authorities had properly understood the effect of cancellation of the licence the goods would not have been detained and the Bill of Entry would have been cleared. The detention of the goods was on account of the erroneous assumption on the part of the customs authorities that the cancellation of the licence makes the licence invalid or void ab initio. Therefore, the ends of justice require that the customs authorities should be directed to follow the practice which they have been following in the matter of grant of detention certificate. Such a direction, in my view, would fall within the scope and ambit of Rule 41 of the Cegat Procedure Rules. 15. Since this Bench had set aside the order of confiscation, the principle object of the doctrine of restitution would apply. The principle of the doctrine of restitution Is, that, on the reversal of a judgment, the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As already stated, the right to detain the goods involves the corresponding obligation to issue a detention certificate if the detention of the goods was not attributable to any fault or negligence on the part of the importer, so that the importer could have the benefit of concession and exemption in the payment of demurrage charges in relation to the goods detained. If the customs authorities who have been empowered to detain the goods are not bound to issue a detention certificate in cases where the detention was not attributable to any fault or negligence on the part of the importers, it is possible that the power of detention could be used in an arbitrary manner. It is for this reason we are inclined to infer a corresponding duty on the part of the customs authorities to issue a detention certificate if there is an undue delay in examining the goods and conducting the necessary tests and the delay is not attributable to any fault or negligence on the part of the importer. When a power is given by a statute, that power should be taken to impose a corresponding duty to exercise the power in a reasonable manner . The ratio of the above decision equally applies to the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion certificate contemplated under Rule 13(a) and (b) of the Rules framed under the Port Trust Act. When the Rules provide for free period and concessional rates, the Port Trust cannot refuse to grant the relief if a detention certificate from the customs authorities is produced. 18. With great respect, brother Dilipsinhji had only referred to certain observations found in the Full Bench Judgment. The Full Bench itself was constituted to consider the correctness or otherwise of the decision of the Division Bench in Collector of Customs v. M.P. Works, wherein the Division Bench had held that there is no statutory or public duty cast on the customs authorities to issue a detention certificate. The Full Bench unequivocally held that they are not inclined to agree with the view expressed in Collector of Customs v. M.P. Works. They are of the considered view that the customs authorities are under a public duty to issue a detention certificate. 19. Shri Pal had contended that since the detention certificate was not issued under the Customs Act, the Tribunal which was constituted under the Customs Act, cannot travel beyond the Customs Act and in this connection, reliance was placed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a detention certificate. In that event, there was no need for the party to approach the Tribunal. As a matter of fact, even in the present case, the Collector did issue a detention certificate, though not for the period for which it should have been issued, but for a shorter period. The earlier decisions of the Bench had not laid down any binding precedent. 22. On careful consideration of all the aspects, I allow this application in part and direct the Collector of Customs, Bombay, to issue a modified detention certificate for the period from 22nd August 1981 to 20th October, 1981. Bombay 6-2-1987 (K. Gopal Hegde) Member (Judicial). 23. As there is difference of opinion between the two Members, the records of the Miscellaneous Application may be forwarded to the President for referring the following point of difference to one or more Members of the Tribunal: POINT OF REFERENCE Whether in terms of Rule 41 and in the circumstances of the case, the application should be rejected as being not competent, as has been held by Member (Technical), Off should be allowed in part and a direction should be issued to the Collector of Customs, Bombay, for issue of a detention c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal could lie to the Tribunal. In purporting to issue any direction under Rule 41 of the Rules supra, the Tribunal would be exercising a power of entertaining an appeal not permitted by law. The Tribunal, according to him, was bound by the provisions of Customs Act, 1962 and could not travel beyond it. For this submission he relied on the Tribunal s decision in the case of Miles India Ltd., Baroda v. Collector of Customs, Bombay, 1983 E.L.T. 1026, which was approved by the Supreme Court in 1985 E.C.R. 289 (S.C.). (This was a case of claim for refund presented beyond limitation stipulated under Section 27(1) of the Customs Act, 1962). As to the reliance of the learned Judicial Member on Madras High Court decision in National Industries v. Asstt. Collector of Customs, Madras. 1980 E.L.T. 128 (Madras). Shri Pal submitted that even according to this decision (para 8) issue of detention certificate is not under any of the provisions of the Customs Act. Besides this decision was given in exercise of writ powers conferred on High Courts under Article 226 of the Constitution of India which power could not be claimed by the Tribunal under Rule 41 of the Cegat Procedure Rules, 1982. Detent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be over looked that the petitioner National Industries in that case had approached the Hon ble Madras High Court for Issue of a writ of mandamus. It appears that the Hon ble High Court accepted the Petitioner s plea and came to his rescue because the petitioner had no remedy under the Customs Act. Now it is fairly well settled that the extraordinary powers of the High Court under Article 226 of the Constitution of India are much wider than those of a Tribunal like CEGAT. The Tribunal has to work within the framework of the statute. From the Hon ble Madras High Court decision itself, it would appear that the petitioner against refusal of issue of detention certificate could not have represented appeal to the tribunal. The appellants relying on Rule 41 of the Cegat Procedure Rules, 1982 is indirectly seeking to achieve what they could not have achieved by filing an appeal to the Tribunal because according to the Madras High Court such an appeal would not be competent. Exercise of such a power under Rule 41 of the Cegat Procedure Rules on the ground of securing ends of justice may not be justified. As to giving effect to the order, the order has in fact been fully complied with by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
