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TMI Blog2022 (6) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... hands even in face of superior wisdom. The ground of unfit for human consumption is, as admitted by the Principal Commissioner of Customs, no longer existent as far as proceedings initiated against the appellant is concerned. As we have premised supra, the issue before us is simple enough: the extent to which the provisions of section 110A of Customs Act, 1962 are intended by law for denying an importer access to his goods pending a dispute on classification that may have import policy ramifications. Classification does not, of itself, measure the gravity of intent of importer as it is the arena within which the rules of engagement between customs authorities, in any country or across time, and importers; every misclassification may not have been with deliberate intent and that is for the adjudicating authority to evaluate before allowing or denying provisional release. It is from the acknowledgement of such obligation to evaluate that section 110A of Customs Act, 1962 was amended to accord co-terminus jurisdiction under section 124 of Customs Act, 1962 and section 110A of Customs Act, 1962. In the present instance, the Principal Commissioner of Customs has sought to dista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Borkhedi/2021/Pt-II dated 30th April 2022 of Principal Commissioner of Customs, Nagpur, the appeal arising therefrom, for which early hearing has also been sought, is also taken up for disposal along with both the applications as the conformity of continued retention of seized goods with order of the Tribunal is required to be examined. Principal Commissioner of Customs, Nagpur, the respondent in the appeal in which direction for disposal of application for provisional release had been ordered and who, according to applicant, had disregarded the spirit of the order is also present in court to render explanation of his actions. As functus officio in the order impugned in the appeal now before us, he is not accountable in personem though, to the extent that the said order is not congruent with order dated 29th March 2002 of the Tribunal, he is and disposal of the appeal on merit does not stand in the way of judicial determination of misconduct, if any, on his part. We draw that distinction with deliberate intent as exercise of quasi-judicial function does not offer a cloak for deliberate defiance should that have occurred. The application for early hearing of the said appeal is, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of their, as well as our, being. In the strenuous defence put forth on behalf of the respondent Principal Commissioner of Customs on each of the occasions, it would appear that we are being solicited to be an accessory in that parricide. It is only to be hoped that this is an episodal aberration and not symptomatic of deeper malaise. The first can be remedied with the armoury at our disposal; the latter may require re-engineering by the Central Board of Indirect Taxes Customs (CBIC) if disregard for the law and disrespect for judicial authority is not to build up into a tsunami that cares not a whit for even the executive authority unable to rein them in. The writing on the wall may well be ignored at its own peril. 6. At this stage, a recollection of the facts may not be out of place. The dispute concerns 50 bills of entry filed in September/October 2021 declaring import of betel nut product known as supari corresponding to tariff item 2106 9030 of First Schedule to Customs Tariff Act, 1975. On the reasonable belief that the goods, to which sub-heading 0802 80 of First Schedule to Customs Tariff Act, 1975 corresponding to areca nuts , with consequent prohibition on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny prohibition for denial of access to imported goods. 8. The Principal Commissioner of Customs, Nagpur chose to re- interpret the jurisdictional competence by alienating from himself the authority conferred on adjudicating authority under section 110A of Customs Act, 1962 in favour of a subordinate officer even though such scruples did not impede the arrogating of such authority to himself in the first instance. If that disclination had been subdued at the altar of judicial direction, that respect should have also forestalled any inclination to leave the decision to a subordinate authority subsequently; it was too late in the day to come to terms with respect for the law. The direction of the Tribunal echoed those of the Hon ble High Court and there is a presumption that higher judicial authority would not impose an extra-legal obligation on executive authority and, in the unlikely event of having done so, it was incumbent on that executive authority to approach the Hon ble High Court of Bombay for modification. Not having done so, it would appear that the intent was to draw attention away from the seizure effected under section 110 of Customs Act, 1962. It was only afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whit about, of judicial hierarchy is made all too clear and borders on contempt for the law and its institutions. Even in the circumstance of having re-established jurisdiction to decide on application for provisional release as directed by Hon ble High Court of Bombay, the Principal Commissioner of Customs did not pause to consider the law relating to seizure, release, adjudication and confiscation which is the next blindspot in this misadventure embarked upon by customs authorities. 9. The exercise of authority to adjudicate and, by extension, to exercise attendant powers conferred by statute is saved by section 5 of Customs Act, 1962. This does not appear to have occurred to the two authorities who, between themselves and for differing reasons, decided that it would be hurtful to public interest to consider provisional release of the impugned goods. In undertaking statutory exercise of power, the triple pillars of constancy, consistency and certainty in concert accords credibility. The bickering and dithering over authority to adjudicate, and to decide upon provisional release, between a Principal Commissioner of Customs and his hierarchical subordinate is; if not pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for detrimental consequence but the refusal to grant provisional release was founded upon an entirely different assumption of unfitness for human consumption arrived at under the cover of darkness by procedural dereliction and which was, then, abandoned in favour of the original cause. Such shots in the dark bespeaks irresponsible exercise of executive power. The lack of such allegation in the show cause notice has been taken note of by the Principal Commissioner of Customs who should, in the first instance, have sought to be convinced with, at least, passable evidence of toxicity before laying his own credibility, and that of his office, on the line. 12. An assured ground that, reasonably, could result in absolute confiscation during adjudication for destruction thereafter and, thus, justifying refusal of provisional release was diluted to that of a classification dispute which, even with potential for confiscation should the allegation of policy infringement be evinced, is no justification for retention; proportion and balance the hallmarks of fair and non-discriminatory exercise of jurisdiction does not seem to have been in the ken of these customs authorities. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature has not thought it appropriate to limit, in any manner, the nature of goods, documents or things which may be provisionally released, under Section 110A, in our view, it is no part of the function of a Court to read, into the said statutory provision, any artificial limitation, not to be found therein. It is only in exceptional situations, where there is an apparent legislative lacuna, which, if left unfilled, would result in manifest injustice, or frustrate the object of the legislation, that a Court can step in and fill the lacuna and, to that limited extent, perform a quasi-legislative function. Else, the Court must rest content with being an interpreter of existing legislation, and has to accept the legislation for what it is. 49. We may, to make matters clearer, contradistinguish Section 110A of the Act, as extracted hereinabove, with Section 125(1) thereof, which reads thus : 125. Option to pay fine in lieu of confiscation. - Whenever confiscation of any goods is (1) authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, by itself, would not render the ineligible for provisional release, under Section 110A of the Act, for the simple reason that Section 110A does not except its application in the case of prohibited goods. Rather, it indicates, unequivocally, to the contrary, by using the omnibus expression any goods, documents or things . 51. The Learned ASG also placed pointed reliance on Circular No. 35/2020-Cus. supra, issued by the C.B.E. C., para 2 of which absolutely proscribes provisional release of goods prohibited under the Customs Act, 1962 or any other Act for the time being in force , goods that do not fulfil the statutory compliance requirements/obligations in terms of any Act, Rule, Regulation or any other law for the time being in force; and goods specified in or notified under Section 123 of the Customs Act, 1962 . Mr. Ganesh relied on Agya Import Ltd. (supra), which holds that para 2 of the said Circular was merely in the nature of a general guideline , and did not incorporate any mandate. We, having perused para 2 of Circular No. 35/2017-Cus. supra, vis-a-vis Section 110A of the Act, are not inclined to be so magnanimous. According to us, para 2 of Circular No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, in the ADG, DRI - and fixed the terms of provisional release. According to her, the only course of action open to the Learned Tribunal, consequent to quashing the Order, dated 4th October, 2019, of the ADG, was to remand the matter to the ADG, to exercise the jurisdiction vested in him by Section 110A of the Act, and fix the terms of provisional release. The Learned Tribunal, according to her, could not have undertaken this exercise, and, by doing so, it effectively usurped the jurisdiction of the Learned ADG, conferred by Section 110A. 55. We are unable to agree, for various reasons. 56. Firstly, Section 129B(1) of the Act empowers the Learned Tribunal, seized with an appeal, challenging the order of the adjudicating authority, to pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary . We are convinced that the jurisdiction, of the Learned Tribunal, to confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is, on the face of it, contradictory in terms. There can be no question of provisional release of seized goods, after completion of adjudication proceedings. Section 110A of the Act specifically empowers provisional release pending the order of the adjudicating authority . It is impossible, therefore, to conceive provisional release consequent on adjudication, or to understand how the ADG chose to opine that it would be premature to arrive at any conclusion about provisional release, before completion of adjudication proceedings. As, after conclusion of adjudication proceedings, the question of provisional release of the goods would be rendered infructuous and, in fact, the adjudicating authority would become functus officio in that regard, in view of the specific words used in Section 110A, the only conclusion, that can follow from the afore-extracted inexplicable finding of the ADG, is that he had made up his mind not to release the seized gold, gold jewellery and silver, provisionally, at any cost. We, therefore, find ourselves in agreement with Mr. Ganesh that any remand, of the matter, to the ADG, to fix the terms of provisional release, would have been an exercise in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of a decision of constitutional courts to the facts of a particular dispute is a matter be considered by the quasi-judicial authority. However, discarding of binding precedent is contrary to judicial discipline which the Hon ble Supreme Court took note of in Union of India v. Kamlakshi Finance Corporation Ltd [1991 (55) ELT 433 (SC)] thus 6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual mala fides but with the fact that the officers, in reaching their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Tribunal as the case may be. In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer. He has only to bring the matter to the notice of the Board or the Collector so as to enable appropriate proceedings being taken under S. 35E(1) or (2) to keep the interests of the department alive. If the officer s view is the correct one, it will no doubt be finally upheld and the Revenue will get the duty, though after some delay which such procedure would entail. 8. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement between customs authorities, in any country or across time, and importers; every misclassification may not have been with deliberate intent and that is for the adjudicating authority to evaluate before allowing or denying provisional release. It is from the acknowledgement of such obligation to evaluate that section 110A of Customs Act, 1962 was amended to accord co-terminus jurisdiction under section 124 of Customs Act, 1962 and section 110A of Customs Act, 1962. In the present instance, the Principal Commissioner of Customs has sought to distance himself from that obligation by pleading lack of propriety engendered from the possibility of binding over the real adjudication authority who, however, did not have appear to have any scruples in snatching a process from the Principal Commissioner of Customs; such noble tolerance of assertiveness does not, however, ennoble the omission to consider the issue remanded to him in accordance with intendment of section 110A of Customs Act, 1962. We have no reason to believe that another remand would prompt a less apathetic response to binding precedent. 19. Only such imported goods as are liable for confiscation under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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