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Dr. S.K. Jhunjhunwala Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Calcutta
Decided On
Reported in(1985)(19)ELT521Tri(Kol.)kata
AppellantDr. S.K. Jhunjhunwala
RespondentCollector of Customs
Excerpt:
.....i hold that in the instant appeal, rate of duty is involved and the jurisdiction vests with the special bench. the assistant registrar is directed to transfer the file to the' special bench, customs, excise and gold (control) appellate tribunal, new delhi.
Judgment:
1. DR. S.K. Jhunjhunwala, C/o Ram Swaroop & Sons, 66, Parvati Ghose Lane, Calcutta-7, had filed a revision petition to the Joint Secretary, Revision Application, Ministry of Finance, New Delhi being aggrieved from Order No. 318/80 C. No. Appl/DHL/HQ/63/79 dated 11th June, 1979 passed by the Appellate Collector of Customs, New Delhi. After the coming into existence of the Tribunal, the said revision application was trans- ferred to the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi under Section 131B of the Customs Act, 1962 to be disposed of as art appeal. Since the order in appeal was passed by the Appellate Collector of Customs, New Delhi, the jurisdiction of the appeal as per records of the registry vested with the North Regional Bench, New Delhi. The appellant vide his application dated 3rd May, 1983 had requested for the transfer of appeal to Calcutta and the Hon'ble President had transferred the appeal to the East Regional Bench, Calcutta vide his order dated 25th May, 1980.

2. At the outset of the proceedings, Shri A.K. Chatterjee, the learned Junior Departmental Representative has raised a preliminary objection that in the instant case, rate of duty is involved and this Court has got no jurisdiction to decide this appeal by virtue of the provisions of Sub-section (3) of Section 129C of the Customs Act, 1962. The learned Junior Departmental Representative has referred to para No. 3 of the order in original passed by the learned Assistant Collector of Customs, New Delhi. The same is reproduced as under: "3. E.C.G. Machine, though portable, is also not admissible as a professional equipment to a Surgeon. Further Notification No. 18, dated 7-1-78 is no more operative in view of the fact that that goods under import were shipped on 11-10-78 i.e. after the said notification had been rescinded. The import of these instruments are, however, permissible without an I.T.C. licence under the provisions contained in Para 120 of Handbook of Import and Exports Procedure, 1978-79. Accordingly, the following 3 professional instruments were released to Dr. Jhunjhunwala after assessment of duty @ 100+20% (a) Diathermy unit=7500 (b) ECG Machine+5000/- (c) ECG Monitor=2500. Rest of the professional instrument which were considered portable and satisfied the conditions under Rule 5 of Baggage Rules, 1970 were cleared free of duty. The remaining items of his unaccompanied baggage were cleared to Dr. Jhunjhunwala under the Baggage Rules, 1970 as admissible to him." The learned J.D.R. has pleaded that if the appellant is given the benefit of Transfer of Residence Rules, 1978, the items shall be exempted from duty. He has also referred to the order passed by the learned Appellate Collector of Customs, New Delhi. He has pleaded that every appeal against a decision or order relating among other things, to the determination of any question having a relation to the rate of duty of Customs has to be dealt with by a Special Bench consisting of not less than three Members as per provisions of Sub-section (3) of Section 129C of the Customs Act, 1962. He has pleaded for the transfer of file to the Special Bench.

3. In reply Shri H.L. Banerjee, the learned consultant has pleaded that in the instant case, rate of duty is not involved. The main point is whether the appellant as a surgeon, is entitled to the benefit of Transfer of Residence under Transfer of Residence Rules, 1978. He has pleaded that this Court has to give a finding whether the appellant is entitled to the benefit of Transfer of Residence Rules, 1978 or not.

The question of rate of duty will only arise after this Court comes to the conclusion that the appellant is entitled to the benefit of Transfer of Residence Rules, 1978.

4. After hearing both the sides, I would like to observe that Customs, Excise and Gold Control Appellate Tribunal has come to existence by virtue of provisions of Finance (No. 2) Act, 1980. Sections 129, 129A, 129B and 129C, Chapter XV and Section 128 to Section 131C were inserted. Section 129 relates to the Appellate Tribunal, 129A deals with the filing of appeals to the Appellate Tribunal, 129B deals with the order of the Appellate Tribunal and 129C deals with the procedure of Appellate Tribunal. Relevant Sub-section (3) of Section 129C of the Customs Act, 1962 is reproduced as under :- "(3) Every appeal against a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment, shall be heard by a Special Bench constituted by the President for hearing such appeals and such Bench shall consist of not less than three members and shall include at least one judicial member and one technical member." A simple reading of Sub-section (3) of Section 129C clearly shows that every appeal against the decision or order relating among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment, shall be heard by a Special Bench constitued by the President for hearing such appeals and such Bench shall consist of not less than three members and shall include one judicial member and one technical member. When an assessee claims that he is entitled to the benefit of a particular rule and in interpreting the applicability of the said rule, an assessee becomes entitled to be exempted from the purview of the Customs duty. Undoubtedly it amounts to assessment at nil rate of duty.

The intention of the legislature in Sub-section (3) of Section 129C of the Customs Act, 1962, is that an appeal to the determination of any question having a relation to the rate of duty of customs or the value of goods for purposes of assessment shall be heard by a Special Bench constituted by the Hon'ble President for hearing such appeals and such bench shall not consist of less than three members. If this Court decides this appeal, it will be an exercise of irregular or assumption of jurisdiction. 'Jurisdiction' means the extent of the authority of a Court to administer justice not only with reference to the subject-matter of the suit but also local and pecuniary limits of its jurisdiction. The jurisdiction of the Court may be regional or appellate, in the exercise of its regional jurisdiction. The Court entertains regional suits. In the exercise of its appellate jurisdiction, it entertains appeals and while exercising the jurisdiction in deciding the appeal, the appellate court is bound by the provisions of the statute and the appellate court cannot exceed its jurisdiction as provided in the statute. A party may waive objection to irregular exercise or assumption of jurisdiction; but there can be no question of waiver where there is a want of inherent jurisdiction because in such a case, the order must be treated as nullity in the eyes of law. The Privy Council in Ledgard v. Bull [(1886) 13 Ind App 134] observed as follows : "When the Judge has no inherent jurisdiction over the subject-matter of a suit, the parties cannot by their mutual consent, convert it into a paper judicial process,... But there are numerous authorities which establish that when, in a cause which the Judge is competent to try, the parties without objection join issue, and go to trial upon the merits, the defendant cannot subsequently dispute his jurisdiction upon the grounds that there were irregularities in the initial procedure, which if objected to at the time, would have led to the dismissal of the suit." The Hon'ble Allahabad High Court has followed this Privy Council's decision in the case of Chandra Bhushan Khanna and Ors. v. Brij Nandan Singh and Anr., Opposite Parties in AIR 1978 Allahabad 459. The Hon'ble Patna High Court in the case of Mohan Lal and Anr. v. The Charge Officer, Purne a and Ors. reported in AIR 1974 Patna 275 had held that: "It is well settled that if a Court or an authority has got no jurisdiction in law to entertain a dispute and erroneously proceeds to determine the rights of the parties, no amount of con-sent or acquiescence of the parties themselves will create the jurisdiction in the said Court or authority and the inherent lack of jurisdiction in the said authority will not in any way be cured or supplied on account of the act of the parties themselves." The scheme of the act in the Customs, Excise and Gold (Control) Appellate Tribunal is very peculiar in its own way. Under the Income-tax Act, 1961, a reference lies to the High Court under Section 256(1) and 256(2) of the Income-tax Act, 1961, in respect of the orders passed by the In- come Tax Appellate Tribunal, whereas in the case of Customs, Excise and Gold (Control) Appellate Tribunal where an order has been passed by the regional Bench of the Tribunal, a reference application lies to the High Court under Section 130 of the Customs Act, 1962 and to the Supreme Court under Section 130A of the Customs Act, 1962. Under Section 130E of the Customs Act, 1962, the appeal lies to the Supreme Court. Section 130E of the Customs Act, 1962 is reproduced as under : "130 E. Appeal to Supreme Court.-An Appeal shall lie to the Supreme Court from- (a) any judgment of the High Court delivered on a reference made under Section 130 in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved, immediately after the passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court ; or (b) any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment." A simple reading of Sub-section (b) of Section 130E of the Customs Act, 1962 clearly shows that an appeal lies to the Supreme Court from any order passed by the Appellate Tribunal relating to among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. A reference application lies to the High Court only in those cases where a question of law or a mixed question of law and fact are involved and this jurisdiction as a final fact finding court, is to be exercised by the Regional Bench, whereas in the case of Special Bench which has got all India jurisdiction, an appeal lies to the Supreme Court under Section 130E of the Customs Act, 1962. It is a substantive right of the appellant irrespective of whether question of law or question of fact is involved. Whereas in the case of Regional Bench, the finding arrived by the Tribunal on question of fact is final. Hon'ble Supreme Court and High Court are not courts of appeal under the Customs Act, 1962 where the order has been passed by the Regional Bench. A reference application is filed under Section 130 of the Customs Act, 1962.

Similar are the provisions of Income-tax Act, 1961 or old Income-tax Act, 1922. This view is supported by the judgment of Privy Council in the case of Rajendra Narain Bhanjadeo v. C.I.T. reported in 8 ITR 495, 500. This view of the Privy Council was affirmed by the Hon'ble Supreme Court in the case of Indian Molasses v. C.I.T. reported in 37 ITR 66-72 and Petlad Turkey Red Die Works Co. Ltd. v. C.I.T. reported in 48 ITR 92-96 (S.C). The jurisdiction of Regional Bench is territorial and the jurisdiction of the Special Bench is all India jurisdiction. The larger Bench of this Tribunal in Appeal No. ED(SB) (T) 11/82-B and other six appeals vide order dated 7th June, 1984 has held that Special Bench has got all India jurisdiction. During the course of arguments, the learned authorised representative for the respondent had pleaded that they have got no objection if this Court exercise its jurisdiction in deciding this appeal. There is no question of waiver where there is inherent jurisdiction because in such a case, it will be nullity in the eyes of law. Order No. 2 of 1982 passed by the Hon'ble President, Customs, Excise and Gold (Control) Appellate Tribunal also clearly lays down that where rate of duty is involved, it has to be dealt with by the Special Bench. The same is reproduced as under : "Four Special Benches shall be located at New Delhi, and shall deal with matters relating, among other things, to the rate of duty of customs or of excise (hereinafter referred to as classification) or to the value of goods for purposes of assessment of duty of customs or of excise (hereinafter referred to as valuation)." I would also like to refer a judgment of the Special Bench in the case of Mis. Malwa Vanaspati and Chemicals Co. Ltd, Indore v. Collector of Central Excise, Nagpur, reported in 1983 E.L.T. 1004 I would like to reproduce para Nos. 17, 18 and 19 of the said judgment.

"17. Sub-section (2) of Section 35-D of the Act vests exclusive jurisdiction in the Special Bench of the Tribunal to hear and decide all appeals against a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment.

18. In Sub-section (3) of the aforesaid provision jurisdiction is conferred on the President or any other member, so authorised in this behalf by the President, sitting even singly, to hear and decide any disputed case, where the difference in duty or the duty involved does not exceed ten thousand rupees, provided that the determination of any question having a relation to the rate of duty or value for purposes of assessment is also not in issue.

19. Clauses (a) (b) in Sub-section (3) of Section 35-D contemplate situations where the point in issue is not in relation to the rate of duty. The provisions of Sub-section (3) have a specific purpose inasmuch as in a given case a duty may have been paid and a claim of refund is made on the ground that the payment was wrongly made or in excess of what was due. There may be more than one reason for such a claim without contesting the rate. Similar would be the case with regard to penalty. But the case in hand stands on a different footing. It is not one of those situations where duty is paid and/or levy is being contested or exemption being claimed which does not effect the rate. The effect of the claim of exemption under the Notification No. 23/72-C.E. is to change the rate itself. To further elaborate the point, those cases where duties are paid-it may be excise duty or import tariff or export levy-and subsequently it is contested that they were wrongly collected, without contesting the rate or accepting certain rates, will stand on different footing than the type of cases before us where question would normally be whether an exemption notification or a concession notification issued under Rule 8 and/or Rule 192 will affect the rate of duty.

Such cases certainly would involve a question in relation to rate of duty of excise which are contemplated under Sub-section (2) of Section 35-D to be dealt with by a Special Bench. To repeat, when the question comes up for determination of duty, may be with reference to an exemption or concession notification, it would necessarily, affect' the rate and, therefore, the question would be in relation to the rate of duty. Therefore, I cannot be a party to my brother's view-point that the jurisdiction of the case did not vest but a chance factor brought the case before the Special Bench." In the instant case, the appellant has made a claim of Transfer of Residence, under Transfer of Residence Rules, 1978. Relevant portion of Transfer of Residence Rules, 1978 is reproduced as under : "Allowance for professional equipment etc.-In addition to articles allowed under Rule 2 and subject to the time-limit mentioned in C1.

(c) of the rule a highly qualified scientist, technologist, doctor or engineer, returning to India for permanent settlement after a stay abroad for a minimum period of two years, may also be allowed to import free of duty such equipment, instruments, apparatus and appliances, up to a value of thirty thousand rupees as are ordinarily required by him in his profession.

Explanation.-For the purpose of this rule, "a highly qualified scientist, technologist, doctor or engineer" is a person who holds a post-graduate degree or its equivalent in science, technology, medicine or engineering, as the case may be, from an Indian or foreign university and has been employed or engaged abroad in his field of specialization for at least one year." Baggage (Conditions of Exemption) Rules, 1975 are also reproduced as under : "In exercise of the powers conferred by Sub-section (2) of Section.

79 of the Customs Act, 1962 (52 of 1962), and in supersession of the Baggage (Conditions of Exemption) Rules, 1963 [notification of the Government of India, in the Ministry of Finance (Department of Revenue and Insurance) No. 19, dated 23rd January, 1963], the Central Government hereby makes the following Rules namely :- 1. These Rules may be called the Baggage (Conditions of Exemption) Rules, 1975.

2. Where any goods in the baggage of passenger or a member of the crew are exempted under Section. 79 of the Customs Act, 1962 (52 of 1962) from payment of import duty leviable thereon, the exemption shall be subject to the conditions that such goods shall not be sold, displayed, advertised or offered for sale or displayed in a shop- (a) and, in the case of fire-arm also that such fire-arm shall not be gifted or given to a retainer or otherwise parted with, until such fire-arm has been used for a period not less than ten years from the date of clearance by such person or passenger or member of crew, or (b) and, in the case of a T.V. set, also that such a T.V. set shall not be gifted or otherwise parted with, until such T.V. set has been used for a period not less than five years from the date of clearance by such person or passenger or member of the crew, or (c) and, in the case of any other goods until the market price of such goods has depreciated to less than fifty per cent of their market price when new." The moment this Court comes to the conclusion that the appellant is entitled to the benefit of Transfer of Residence Rules, 1975 the appellant gets exemption from duty. Otherwise, he has to pay duty at the rate of 100%+20%. Accordingly, I hold that in the instant appeal, rate of duty is involved and the jurisdiction vests with the Special Bench. The Assistant Registrar is directed to transfer the file to the' Special Bench, Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi.


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