Collector Of Customs v. Nippon Bearing (P) Ltd.

[Order per : S.V. Maruthi, Member (J)]. - The dispute in these 370 appeals relate to the maintainability of the appeals under Section 129A of the Customs Act, 1962.

2. The respondents imported ball bearings from Romania and Hungary. The Collector in his order No. S/10-181/86 dated 20th March 1987 in the case of bearings imported from Romania, by M/s. Shaheel Enterprises, Bombay, S/10-52/87J dated 20th March 1987, S/10-96/85 dated 20th March 1987, in the case of bearings imported from M/s. Impex Metal by M/s. Lyallpur Machinery imported from Hungary accepted the invoice price based on suppliers prevailing price-list. Following these orders, the Collector accepted the invoice price in the case of imports in 370 cases against which the present appeals are filed.

3. The impugned proceedings are as follows :-"Notes above may please be seen.

Dy. Collector’s above note makes very clear about the assessment to be followed for the present and future consignments. By the above two files i.e. S/10-181/86 (Romania (A copy of Order-in-Original placed) S/10-53/87 (Hungary) Collector has accepted price list in the case of Romania of the years 1983,1984 and 1985, whereas in the case of Hungary the 1984 price list has been accepted. In order to finalise the past P.D. assessment on the basis of the above decision of accepting of the price list, the revenue deposit has to be refunded in both the cases of import from Romania & Hungary.

If the above proposal is approved P.D. assessment may be finalised, bonds may be cancelled and R.D. be refunded. This is particularly in light of the file No. S/5-(EEC)585/84J where the Collector on 4-2-1987 had remarked “No refund, wherever they have paid P.D. they may be adjusted”, (file enclosed). As the Collector’s adjudication order is subsequent to the above it is submitted for approval of the above proposal i.e. the respective years price lists be accepted for purposes of finalisation of all P.D. assessments and consequential refund.

A large number of importers and their representatives have submitted letters copy placed opposite to the Collector as well as the Public Grievance Committee, that since the Collector has accepted the price list, R.D. be refunded.

4. The above discloses that a note was put up to the Collector for orders on the proposal to refund duty in the case of 370 imports made from Romania and Hungary by various respondents on the ground that the Collector accepted invoice price in respect of imports made from Romania & Hungary in his order No. S/10-181/86, S/10-53/87. The note also discloses that the said proposal was put up in the context of earlier orders of the Collector in file No. S/5(EEC)585/84-J where on 4th February 87 he remarked:

“No refund. Wherever they have paid P.D. they may be adjusted.”

5. The Collector simply signed the proposal which means the approval of the proposal.

6. The question, therefore, is whether affixing signature to a note put up to the Collector for approval means ‘a decision or order’ passed by the Collector of Customs as an adjudicating authority appealable within the meaning of Section 129A of the Customs Act, 1962.

7. To determine the issue it is necessary to refer to some of the relevant provisions of the Act :

Section 2(1)

“adjudicating authority” means any authority competent to pass any order or decision under this Act, but does not include the Board, Collector (Appeals) or Appellate Tribunal;"

Section 122

“Adjudication of confiscations and penalties. - In every case under this chapter in which anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged –

(a) without limit, by a Collector of Customs or a Deputy Collector of Customs;”

Section 124

Issue of show cause notice before confiscation of goods etc. - No order confiscating any goods or imposing any penalty on any person shall be made under this chapter unless the owner of the goods or such person -

(a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or impose a penalty;

(b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and

(c) is given a reasonable opportunity of being heard in the matter;"

Section 129-A

Appeals to the Appellate Tribunal. - (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such orders -

(a) a decision or order passed by the Collector of Customs as an adjudicating authority;"

(3) “Every appeal under this section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the Collector of Customs, or as the case may be, the other party preferring the appeal.”

8. On perusal of the relevant provisions of the Act it discloses that the definition of the adjudicating authority under Section 2(1) of the Act excludes both, Collector (Appeals) or the Appellate Tribunal from its purview, but it is an authority competent to pass any order or decision. Section 122 is the provision under which the Collector is empowered to adjudicate confiscation and penalty. Section 124 provides for giving a reasonable opportunity by the Collector before adjudicating the confiscation and the penalty. Section 129A(l)(a) provides for an appeal to the Tribunal against any decision or order of the Collector passed as an adjudicating authority. Section 129A(3) provides for limitation within which the appeal is to be filed, according to which the appeal is to be filed within 3 months from the date of the communication of the order.

9. Section 122 of the Act should be read with Sec. 124 of the Act. Section 124 of the Act speaks of ‘an order and no reference is made to a ‘decision’. Therefore, the Collector while adjudicating confiscation and penalties passes an order and not a decision. An order under Section 122 of the Act requires communication under Section 129A(3) in the absence of which the question of filing an appeal does not arise. At this stage we may point out that Section 129A1(a) speaks of an appeal against a decision or an order whereas Section 124 speaks of only an order. We may also point out that Sec.l29A(3) does not speak of communicating a decision. In other words the Parliament has consciously made a distinction between a decision and an order to be passed under the Act for the purpose of filing an appeal to the Tribunal.

10. Let us examine whether the impugned action of the Collector is an order passed by the Collector as an adjudicating authority within the meaning of Section 122 read with Sections 124 and 129A1(a) of the Act.

11. The Collector in the relevant file merely affixed his signature to the note seeking approval to the Action proposed. Therefore, it cannot be said to be an order passed in the capacity as adjudicating authority. ‘Adjudication’ means giving or pronouncing a judgment or a decree. It presupposes an existence of ‘lis’ between the department on the one hand and the importers on the other hand and the determination of the ‘lis’ by the Collector which requires the Collector to Act judicially. In other words it requires giving an opportunity to the party against whom the accusations are made to explain the same. The Collector has neither given an opportunity to the importers nor determined the ‘lis’ but simply approved the proposal put up to him. Since the Collector is required to act judically the order also requires to be communicated. Further the action of the Collector would result not only in civil consequences but also levying penalty and confiscation of goods. Therefore, the Collector is required to act judically in passing the order under Section 122 read with Section124 of the Act. Therefore the action of the Collector by affixing the signature to the note cannot be treated as an order passed as an adjudicating authority. Further the said action was not communicated to the parties. Therefore, it is not an order appealale within the meaning of Section 129Al (a) of the Act.

12. The contention of the appellants that the action of the Collector amounts to a decision, and therefore, appealable under sec. 129A1(a) is not really necessary to consider. However, since arguments were advanced we are expressing out views.

13. The word ‘decision’ in common parlance is more or less a neutral expression and it can be used with reference to purely executive act as well as judicial order. The mere fact that executive authority has to decide something does not make the decision judicial. It is the manner in which the decision has to arrive at which makes the difference and the real test is, is there any duty to decide judicially [Province of Bombay v. Khushal Das S. Advani (AIR 1950 SC page 222)].

14. Therefore, the real test is, is there any duty cast on the Collector to decide judicially. In our view the Collector has a duty to act judicially for the simple reason the foundation of the action is the allegation against the importer that they have under-in voiced the goods. There is lis/controversy between the deptt. and the importer and the Collector is duty-bound to give an opportunity to the respondents to explain the allegation against them. Therefore, the Collector has to decide judicially and the decision required communication. In the instant case we have dealt with at length in the earlier pargraphs, the manner in which the Collector disposed of the matter. The mere affixing the signature seeking approval of the proposal does not amount to taking a decision judicially. Consequently, it ceases to be a decision. At the most it may be an executive decision which is not appealable under Section 129 Al (a) of the ACT.

15. In any view of the matter we are of the view that the appeals are not maintainable and accordingly they are dismissed.