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TMI Blog1988 (3) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ld. S.D.R. has made a request that necessary permission for rectifying the defect may be granted. The learned advocates for both the respondents have no objection for granting opportunity to the appellant for rectifying the defect. 3. After hearing both the sides, necessary permission for the rectification of the defect was granted and the appellant had duly filed revised C.A. 5 form duly signed by the Collector of Customs, Calcutta. 4. On merits, Shri S. Roychowdhury, Ld. Barrister and Sr. Advocate, who has appeared on behalf of Metro Exporters Pvt. Ltd. and Shri S.D. Nankani, Ld, Advocate, who has appeared on behalf of Jayant Oil Mills Pvt. Ltd., have raised a preliminary objection that the applications on form C.A. 5 filed by the revenue in terms of the provisions of Section 129D(4) of the Customs Act, 1962 are not maintainable as the so called extracts from the impugned orders passed by the Collector of Customs, Calcutta were not orders passed by him as an adjudicating authority and the orders passed by him were the orders in his administrative capacity as Collector of Customs, Calcutta. Shri Roychowdhury, Ld. Barrister, has briefly stated the facts and has argued that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Collector in a proceeding in which he acted as an adjudicating authority. It was submitted that the alleged or purported order of the Collector dated 7-1-1983 sought to be impugned in the instant appeals is neither an order or decision as contemplated under Section 129D nor has it been passed by the Collector of Customs as an adjudicating authority in any proceeding. The documents described as extracts of the Collector s order are mere note sheets contained in the Departmental files. The order or decision contemplated under Section 129D has to be formal..... order of decision duly communicated to the parties in the manner prescribed under the Act as the same is appealable. In the instant case the respondents had never been communicated any order or decision of the Collector at any point of the time which is sought to be impugned In the instant appeal. In the premises, the notes contained in the Department s file had never matured into any judicially enforceable and legally recognised appealable order. The order or decision liable for review by the Board must be an order or decision passed by the Collector as an adjudicating authority in a proceeding and not in his a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector on the basis of a specific issue raised by the Assistant Collector with regard to coverage of import of the subject goods against Additional Licence. This order was an order passed under Section 47 of the Act; (ii) Section 47 has got three elements - (a) satisfaction of the proper officer that the goods are not prohibited goods, (b) payment of duty, if any, in terms of assessment of the goods and (c) payment of other charges. Each one of the above is a proceeding in itself, a legal requirement under the statute. There is no procedure laid down under Section 47 with regard to exercise of power or discharge of functions. (iii) The proper officer under Section 47 need not be only one officer. It would be more than one which would be clear from the section itself. The said Section 47 refers to the proper officer and not a proper officer. Therefore, it can be read in plural. (iv) Several activities are contemplated from the stage of receipt of the Bill of Entry till the passing an order of release under Section 47, such as determination of rate of duty under Section 15, assessment under Section 17 etc. Each one of these functions requires application of mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r construction would make Section 47 negatory and unworkable. (ii) It is also not factually correct that the Collector of Customs has passed an order of clearance under Section 47. In the instant case the order of the Collector in the note sheet is dated 7-1-1983. The assessment was made on 12-1-1983 and duty was paid on 12-1-1983. On the same day the Group Appraler gave order to OH Officer for drawing samples as per Test Memo with the remark Good Released . Thereafter on 14-1-1983 the Oil Officer drew the sample as per Test Memo and released the goods for Home Consumption. So it is inconceivable that the so-called order dated 7-1-1983 could be termed or described as an order for clearance under Section 47 of the Act. The order for clearance for Home Consumption came to be passed on 14-1-1983 only, as can be seen from above. (iii) The case reported in 1981 ELT P. 235 has no application whatsoever in the facts and circumstances of the case. The ratio of the said judgment as appearing at para 13 relied on by the Learned Senior Departmental Representatives is that the view taken by the two authorities i.e. Licensing and the Customs, in the matter of interpretation of the Licence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iz. administrative capacity and quasi-judicial capacity. When he makes any order or gives any instructions in inter-departmental memos or departmental files he acts in an administrative capacity. However, when he proceeds to adjudicate any disputed issue between an assessee/importer and the Department having civil consequences, he acts as an adjudicating authority and is enjoined with a duty to discharge his functions in a quasi-judicial capacity by initiating proceedings which would commence with the issuance of the show cause notice and end with the communication of the order. (iii) Only the order of the second category as above i.e. order passed by the Collector as an adjudicating authority in a proceeding is now subjected to review by the Board under Section 129D-(1). (iv) Prior to the said amendment the Board had the power of revision under Section 130. The amendment has brought three major changes : (a)Prior to amendment the Board could review an order passed by any officer of the Customs, whereas after the amendment the Board can review only the order passed by the Collector of Customs; (b) after the amendment the Board can review only those orders of the Collector of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fth Edition are given below: Decision : A Determination arrived at after consideration of facts, and, in legal context, law. A popular rather than technical or legal word; a comprehensive term having no fixed, legal meaning. It may be employed as referring to ministerial act as well as to those that are judicial character. A determination of a judicial or quasi-judicial nature. A judgement or decree pronounced by a court in settlement of a controversy submitted to it and by way of authoritative answer to the questions raised before it. (P. 366). Order : A mandate; percept; command; or direction authoritatively given. (P.988). Proceeding : In a general sense, the form and manner of conducting judicial business before a court or judicial officer, Regular and orderly progress in form of law, including all possible steps in an action from its commencement to the execution of judgement. Term also refers to administrative proceeding before agencies, tribunals, bureaus, or the like. An act which is done by the authority or direction of the court, agency or tribunal, express or implied; an act necessary to be done in order to obtain a given end; a prescribed mode of action for ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be dismissed on the ground of serious procedural infirmities. No order of the Collector has been enclosed to the appeal as enjoined by Rule 9 of the Tribunal Appeal Rules. What is purported to be an order of the Collector of Customs is only the Notings made in the file and the same has been annexed to the appeal as extracts of the Collector. There cannot be any appeal against an extract of an order nor the extract can tantamount to be an order It is respectfully submitted that this Hon ble Tribunal would be pleased to reject the above appeal on the above preliminary grounds for the ends of justice. 5. Shri M.C. Thakur, Ld. S.D.R. replied to the preliminary objections of the Ld. Advocate and states that in the case of Metro Exporters Pvt. Ltd. the bill of entry was presented on 28.12.1983 in the Custom House. On 5.1.84 Appraiser verified the papers and put up a note to Assistant Collector Group I and AC/Gr. I raised queries in the file on the same day and the respondent replied to the queries and on 6/1 the Appraiser had put up the file back to Assistant Collector with reference to the queries raised. Shri Thakur stated that the order passed by the Ld. Collector is an adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies under the Act. There is no procedure laid down under Section 47 with regard to the exercise of power and discharge of functions. The nature of such activities is transmissible in character and ascertainable under the statute. Therefore, the compliance in terms of Sec. 153 is not always required. The provisions for order of clearance is solely to make it clear that preliminary requirements have duly been complied or met with. The reference to the proper officer in Sec. 47 has to be read in context with Sec. 2(34). The definition makes it clear that a proper officer is one who has been assigned functions either by the Board or the Collector of Customs. The provisions of Sections 3, 4 and 5 further make it clear that an officer of Customs is empowered to exercise powers conferred on him under the Act. By virtue of Sub-section (2) of Section 5, a superior officer of customs can exercise the powers conferred on sub-ordinate officers. At what point of time a superior officer may exercise powers conferred on a sub-ordinate officer will depend on factors which impliedly have exigencies of the matter for the purpose of discharging functions under the Act. The scheme contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s come to a reasonable finding and accepted licence and allowed clearance. This decision/order of the Collector was under Sec. 47 for a limited purpose. The Collector was acting well within his jurisdiction. The Collector exercising his powers under Sec. 47 has not created a new jurisdiction nor has enlarged the existing one. The scheme of the Act permits him to exercise powers under Sec. 47. The decision or order has not been defined in the Act. The Collector having satisfied himself on this particular point has come to a clear conclusion and this is a decision/order within the meaning of the Act. The Collector of Customs was a competent officer in terms of Sec. 2(i) of the Act to pass such an order/decision. Tarachand Gupta, AIR 1971 SC 1558 Taraporevala, Law of C. Excise Second Edition, P.9 Permissive Expressions The Supreme Court in the case of A.K. Kraipak v. Union of India, AIR 1970 SC 150 laid down that:- The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. For determining whether a power is an administrative power or quasi-judicial power one has to look to the nature of the power con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on merit by the Tribunal is mandatory in terms of the word shall appearing in Sec.129D(4). The preliminary objections raised by the respondents is without any substance. It is, therefore, prayed that the applications filed by the Collector of Customs under Section 129D(4) in these two cases be heard on merits. 6. In addition to the written arguments, Shri M.C. Thakur, Ld. SDR, has cited a judgment of the Tribunal in the case of Collector of Customs v. M.J. Enterprises, Bombay reported in 1987(12) ECR 490 where the South Regional Bench of the Tribunal had held that order passed on a disputed point relating to the validity of import licence is an adjudication order and not an administrative order and hence the Board was competent to review the same. Shri Thakur, the learned S.D. R. has argued that in view of the written submissions and his arguments the appeal filed by the appellants needs to be allowed. 7. Shri Nankani, the learned Advocate on behalf of M/s. Jayant Oil Mills submits that written arguments have already been filed. The Collector s order is in the nature of the guidance issued to sub-ordinate officers. There is no communication of the order to the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e No.2904477 dated 23rd February, 1979. The export house additional licence has been issued to M/s. Bharat Diamond Industries, Naginmahal, Virnariman Road, Bombay-20 and the importers have letters of authority in their name. Since the importation of crude coconut oil is canalised as the same appears in Appendix 9 of 82-83 policy, vide their letter No. Nil dated 6.1.83 placed opposite may please be seen. They have referred to the slip attached with the licence which reads that this licence is revalidated upto 8.2.83 subject to the condition that during the extended period of revalidity the licence shall be valid for import of items in Appendices 5 and 7 and under OGL which can be imported against additional licence subject to the condition contained in para 231 (1) (2) and (4) of Import and Export Policy (Volume-1, 82-83). They have submitted that the slip attached indicates that it allows all OGL items as are allowed on the date of issue of the licence subject to para 231 (1) (2) and (4) and in these paras there is no restriction in regard to the importation of OGL items. However, the close scrutiny of this slip attached will indicate that it permits the importation of appendices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ened before 1.4.81. In the present case the order is placed on 13.3.81 but no L/C was opened prior to 1.4.81. In view of this the subject licence does not appear to be covering the imported items as the same is not being imported within the validity of the OGL. However the contention of the importer is that the item allowed as OGL on the date of the issue of the licence and the subsequent withdrawal of the item from the OGL should not affect their import licence. The slip attached to the licence may also mean that the licence has been revalidated to import Appendices 5 and 7 and OGL items of import policy relevant at the time of the issue of the licence as the importation has been made conditional to the transitional arrangement made in para 231(1)(2) and (4).Curiously enough, the licensing authorities have not made the revalidation subject to the condition 231 (3) of import policy 83. This para was most crucial to be mentioned in the revalidation slip as it clearly indicates that REP licences and additional licences held by export houses/trading houses will cease to be valid for import of any item which could be imported under OGL during 81 -88 but no longer so in this import e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly, August, 1981 - with a condition that para 213 of AM 1980, para 215 of AM 1981 and para 222 of AM 1982 Policy Book would be applicable. While paras 213 and 215 would not be very relevant for them, for this specific importation para 222 of AM 1982 would be relevant. However, no action has been taken by the Importers during this validity period. (3) Again this has been extended for a period of six months subject to the condition of para 215 of Import Policy 1980-81. Again since canalisation took place in April 1981, this condition is also not relevant for this importation. (4) The last extension has been given on 2.11.82 extending the validity of the licence upto 8.2.1983 subject to the condition that during the extended period of validity the licence shall be valid for import items in Appendices 5 and 7 and under OGL which can be imported against additional licences subject to the conditions contained in Paras 231 (1), (2) and (4) of Import and Export Policy (Vol.1) 1982-83". During this revalidation, the Importer has opened the L/C and also effected the shipment. Since the shipment has taken place in December, 1982, the last revalidation would perhaps be relevant for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n adjudicating authority. Section 129D of the Customs Act is reproduced below :- S 129D. Powers of Board or Collector of Customs to pass certain orders. (1) The Board may, of its own motion, call for and examine the record of any proceeding in which a Collector of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. (2) The Collector of Customs may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Customs in his order. (3) No order shall be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s order the goods released 22.10.83 Board s order 104R and 105R dated 12.10.83 passed under Section 129D(1) of the Customs Act, 1962 for filing an application under Section 129D(4) order was received by Custom House on 22.10.83. On or about 23.11.83 Collector of Customs filed an appeal before the Hon ble Tribunal A simple perusal of the extract from the Collector s order attached with Form No. CA-5 shows that it is an administrative instruction/communication to the Assistant Collector. It is a settled law that a quasi-judicial authority while passing an adjudication order has to apply his/her own mind and the administrative order/instructions/communication cannot be treated as an adjudication order. The Hon ble Madras High Court in the case of M. Nazir Hussain v. Assistant Collector of Customs reported in (1969) 82 Mad LW 257 had held that Where clearance certificate for a consignment of goat hair is given, but later on receipt of a communication from the Government clarifying schedule II, item 12 of the Indian Customs Tariff, duty on that consignment is demanded under Section 28(1) of the Customs Act, the demand order is vitiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ynthetics Ltd., and others v. Central Board of Direct Taxes and others reported in (1972) 83 ITR 335 SC. In that case the Supreme Court had held that we were informed by the counsel for both the parties that the decisions conveyed in those communications were not made in exercise of any of the powers conferred on the Board by any law. They were merely replies to the communications sent by the appellants. They cannot be even considered as directions under Section 111 of the Income-tax Act, 1961, as they pertain to decisions to be taken by concerned taxing authorities. The Board is not competent to give directions regarding the exercise of any judicial power by its subordinates. The opinions expressed in those communications pertain to the exercise of judicial powers by the taxing authorities, as it is for those authorities to determine as to the year in which the undertaking began to manufacture or to produce articles within the meaning of Section 80J of the Income-tax Act, 1961. The communications sent by the Board and impugned in the writ petition are replies sent by the Board to the letters written by the appellant. They cannot bind the taxing authorities who have to decide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s written I am quite aware, that dictionaries are not to be taken as authoritative exponents of the meanings of the words used in Acts of Parliament, but it is a well-known rule of courts of law that words should be taken to be used in their ordinary sense, and we are therefore sent for instruction to these books . He has also written that the meaning of a section may be determined, not so much by reference to other individual provisions of the statute, as by the scheme of the Act regarded in general. He has further opined that the previous legislation may be relevant to the interpretation of later statutes in two ways (i) the course which legislation on a particular point has followed often provides an indication as to how the Act at present in force should be interpreted, and (ii) light may be thrown on the meaning of a phrase in a statute with reference to a specific phrase in an earlier statute dealing with the same subject matter. Since adjudication has not been defined in the Act, we have to resort to various dictionary meanings: I. Mozley and Whiteley s Law Dictionary, 8th Edition by John B. Saunders defines adjudication as Adjudication : 1. The giving of judgment a se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n : Giving or pronouncing a judgment or decree. In bankruptcy law, adjudication is the act of the Court declaring a person to be bankrupt. In Scots Law it signifies the diligence by which land is attached in security and payment of debt, or by which a feudal title is made up in a person holding an obligation to convey without a procuratory of resignation or precept sasine. There are thus (1) the adjudication for debt; (2) the adjudication in security; and (3) adjudication in implement (Bell s Diet.) A decision of the Honourable Supreme Court has given the definition of Decision in the case of Province of Bombay v. Khushaldas S. Advani, 1950 S.C.R. 621 at p. 642 reported in AIR 1950 S.C. 222 at p.229 as : The word decision in common parlance is more or less a neutral expression and it can be used with reference to purely executive acts as well as judicial orders. The mere fact that an executive authority has to decide something does not make the decision judicial. It is the manner in which the decision has to be arrived at which makes the difference and the real test is: Is there any duty to decide judicially? VII. The compact edition of the Oxford English Dictionary, Vol. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order or decision in the eye of law or an effective order. The Supreme Court was pleased to hold that the order of the Revenue Minister Pepsu could not amount to an order by the State Government unless it was expressed in the name of Rajpramukh as required by Article 166(1) of the Constitution and was then communicated to the appellant; until the order was so communicated it was only of a provisional character and could be reconsidered over and over again. Before communication the order was binding neither on the appellant nor on the State Government . In the matter before us the adjudication was done by the Assistant Collector. The extract of the order dated 7th January, 1983 which has been attached with Form CA5 is in fact communication between the Assistant Collector and the Collector and the same could not be treated as an adjudication order/decision. The same has never been communicated to the respondents in terms of the provisions of Section 153 of the Customs Act, 1962 and as such is not binding on the respondents in any way. The judgments cited by the learned S.D.R. also do not help him as the facts are different and the learned S.D.R. has cited the judgment of the South R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority. In other words, earlier the Board could question any decision or order of the Collector irrespective of whether it was an executive or a quasi-judicial decision or order, whereas now it can direct filing of an application before the Tribunal only in respect of such proceedings which were in the nature of quasi-judicial proceedings. 13. It is, therefore, necessary to determine the nature of action taken and the proceedings, if any, in which the Collector of Customs had passed the Impugned orders . 14. In this connection, an examination of the papers filed by the Department shows that they include a note of the Assistant Collector which was put up on file to the Collector for his orders. The papers also include a decision of the Collector on the note sheet, passed on the basis of the notes put up to him. The note of the A.C. indicates the view point of the Appraising Group regarding the validity of a licence. The note of the Collector, recorded after considering the Group s viewpoint, incorporates a decision accepting the licence and allowing clearance. 15. Before the consider as to what it all amounts to, it may be helpful to take note of a few basic fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice was issued and no hearing was offered, which would have normally been done in case it was decided to adjudicate the case. It is indeed apparent from the documents filed before us including the notes of the A.C. and the Collector and the date sheet, that after the queries had been replied to, the whole debate in the matter was confined to (within) the Department and the action taken was in the nature of internal processing of the case. That is to say, acting in accordance with the prevalent procedure the Collector had arrived at his decision in an executive fashion. In other words, the Collector had taken a decision and passed an order during the course of an administrative/executive proceedings, in this view of the matter. 20. There is yet another way in which the matter can be looked at. 21. Since it has been pleaded by the Ld. S.D.R. at great length that the order of the Ld. Collector was, in fact, an order passed under Section 47, it may be mentioned that orders in adjudication proceedings are passed, nor under Section 47, but with reference to Section 122 read with Section 124 and other relevant provisions of the Customs Act (and/or allied laws). Indeed, no or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed; consequently, an order under Section 47 has been ultimately passed in the normal course by the proper officer at the gate of the docks. The decision of the Collector is, by no means, an order under Section 47. It is actually an order passed long before the out-of-charge stage. [But, if indeed it was an order under Section 47, as argued by the Ld. S.D.R., then and even then if could only be an executive order as shown above and we would be back to square one.] 24. I may also take this opportunity to mention that adjudication in the circumstances, if and when resorted to, is normally required to be preceded as well as followed up by executive action and therefore, merely represents an intermediate stage as such. (This is equally true of town-seizure and baggage cases as also purely assessment cases). 25. It Is often argued that the processing of the bill of entry or an assessment by itself was a quasi-judicial act but in my opinion, it need not always be so and where there was no Lis , no dispute, then the processing could be completed by various executive steps alone. The same is true of matters requiring acceptance of licence. 26. Thus, it is evident from the documents f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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