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T.G. Merchant and Company Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Reported in(1984)(16)ELT269Tri(Mum.)bai
AppellantT.G. Merchant and Company
RespondentCollector of Customs
Excerpt:
.....bench the members then constituting required the appellants to produce the order passed by the addl.collector. the appellants corresponded with the addl. collector to furnish him a copy of the order passed by him. after prolonged correspondence the appellant's advocate received the following correspondence from the addl. collector, bombay. 'please refer to your letter number nil dated 2nd instant on the above subject. the earlier orders of additional collector of customs, bombay regarding export on warning was an executive decision and not appealable.' now it is seen from the above letter that the addl. collector has clarified to the appellants that his earlier order; namely, warning was an executive decision and not appealable.4. when,this appeal was taken up for hearing, shri j.m......
Judgment:
1. This appeal is directed against the order of the Addl. Collector on File No. S/6-1142/82-B and endorsed on S/Bill No. 23805, dt. 29-1-83.

2. The facts necessary for the disposal of this appeal stated briefly are : that the appellants have been issued a licence No.S/15-38/74-75-B, dt. 23-8-74 for Private Warehouse for the storage of all kinds of Wines, Whisky, Beer and other potable spirits, canned goods and cigarettes. The appellants are also engaged in the business of importing all kinds of Wines, Whisky, Beer etc. in their private bonded warehouse for re-export as ships stores or to any other countries outside India except Nepal, Tibet and Bhutan. The appellants received order for shipment of Johnnie Walker Red Label Scotch Whisky from M/s. Grand Cellar, Sharjah for which irrevocable Letter of Credit dt. 18-1-83 was received in their favour with a stipulation that the shipment from India to Sharjah should take place dt. 29-2-82 at the latest. In terms of the above letter of credit, the appellants prepared a Shipping Bill No. 023805 dt. 29-1-83 for re-export of Johnnie Walker Red Label Scotch Whisky to Sharjah from their private bonded warehouse.

This shipment was objected to by the Customs authorities, but later on the shipment was allowed on warning by the Addl. Collector of Customs.

The warning was endorsed on the Shipping Bill. Subsequently, the Asstt.

Collector of Customs, Bond Department, Bombay in his letter No.S/6-1142/82-83-B-dt., 15-2-1983 informed the appellants that they had been granted a licence for private bonded warehouse under Sec. 58 of the Customs Act, 1962 for storage of imported beer, whisky and other spirits for supply to the Foreign Going Vessels and Foreign Diplomats only and as such, permission for re-export of goods under Sec. 69 of the Customs Act, 1962 was not permissible. The letter further stated that the appellants are, however, allowed on warning to re-export the goods i.e. 1063 C/s. of Whisky to Sharjah as a very special case. In future, on such case will be allowed to re-export. The appellants were warned to be more careful and abide by the rules and regulations under the Customs Act. From the facts narrated above it is seen that the appellants had been allowed export. The grievance of the Appellants appears to be that the Addl. Collector ought not to have administrated warning and the warning administrated by the Addl. Collector is without authority and illegal and therefore liable to be set aside.

3. Alongwith the appeal the appellants filed a photostat copy of the shipping bill and a copy of the letter dt. 15-2-83 addressed to the appellants by the Asstt. Collector of Customs, Bond Department, and other documents which are not relevant. It appears when this appeal came up for hearing before this Bench the Members then constituting required the appellants to produce the order passed by the Addl.

Collector. The appellants corresponded with the Addl. Collector to furnish him a copy of the order passed by him. After prolonged correspondence the appellant's Advocate received the following correspondence from the Addl. Collector, Bombay.

'Please refer to your letter Number Nil dated 2nd instant on the above subject.

The earlier orders of Additional Collector of Customs, Bombay regarding export on warning was an executive decision and not appealable.' Now it is seen from the above letter that the Addl. Collector has clarified to the appellants that his earlier order; namely, warning was an executive decision and not appealable.

4. When,this appeal was taken up for hearing, Shri J.M. Jain, S.D.R.raised a preliminary objection as to maintainability of the appeal. His contention was that under Sec. 129-A appeal lies to,the Tribunal only against a decision or order passed by the Collector of Customs as an adjudicating authority. According to Shri Jain it is only such orders where the Collector imposes a penalty or fine appeal lies to the Appellate Tribunal and not against any other order. This interpretation of Shri J.M. Jain in our opinion is wholly erroneous. The provisions of Clause (a) of Sec. 129-A(1) is clear, explicit and unambiguous. It provides an appeal to the Appellate Tribunal against the decision or order passed by the Collector of Customs as an adjudicating authority.

The expression 'adjudicating authority' is defined under Sec. 2(1) and it reads : (i) 'adjudicating authority' means any authority competent to pass any order or decision under this Act, but it does not include the Board, Collector (Appeals) or Appellate Tribunal.

From the above definition two things are clear. For the purpose of this Act, (1) the adjudicating authority does not include the Board, Collector (Appeals) or Appellate Tribunal.

(2) adjudicating authority is an authority competent to pass any order or decision under the Act. From the perusal of the various provisions in the Customs Act it is seen that the Collector has been conferred with power of adjudication on various matters. He has been given power to assess also. Therefore, we cannot agree with the narrow interpretation placed by Shri Jain that appeal lies to the Tribunal only against such order of the Collector where he imposes fine or penalty. The expression 'adjudication' merely means judgment or decision. This judgment or decision must be under the Act. The judgment or decision implies adjudication of dispute by a judicial process. In the matter of adjudication the Collector exercises the powers of a quasi-judicial authority, and therefore, he is required to act judicially and not arbitrarily or capriciously. To make a 'decision' or an 'order' judicial the following criteria must be established.

(1) determination upon investigation of the question by an application of objective standard to facts found in the light of the existing rules, (2) that the investigation is subject to certain procedural attributes contemplating of an opportunity of presenting its case, and (3) ascertainment of facts by means of evidence if dispute be on question of facts and if the dispute be on question of law on the presentation of legal arguments. (See AIR 1963 S.C. page 577).

5. The Collector of Customs is saddled not only with quasi-judicial powers, but also administrative or executive powers. Under Sec.

l29-A(l)(a) appeal has been provided against the decision or order which the Collector passes in exercise of his quasi-judicial powers.

Under the above provisions no appeal is provided against the orders of the Collector which are passed in his administrative capacity. In other words no appeal lies to the Tribunal against the administrative or executive actions of the Collector. The administrative or executive action can in no sense be said to be judicial in nature. The judicial Act must be distinguished from ministerial and administrative or executive acts. If the above distinction is borne in mind, it would be clear that what the Parliament intended under Sec. 129-A(l)(a) is to provide an appeal against the decision or order passed by the Collector of Customs not in his ministerial or executive capacity, but in his judicial capacity.

6. In the above view of the matter we reject the preliminary objection of Shri Jain, namely, that it is only against such orders where the Collector imposes a fine or penalty an appeal lies to the Appellate Tribunal and not against any other order. But then the present appeal in our opinion is not maintainable because the order challenged namely, the warning administrated by the Add!. Collector cannot be considered as a decision or order against which an appeal is provided to the Tribunal, under Sec. 129-A(l)(a) of the Act. In short this is not an appealable order. The said warning does not constitute a decision or order within the meaning of those expressions. The warning administreted was not in exercise of the quasi-judicial powers vested with the Collector. It was purely an administrative or executive direction. As a matter of fact in the letter which we had quoted in this order the Addl. Collector himself had stated that the warning which he had administered was an executive decision and not appealable.

In this connection we may usefully refer to the decision of the Full Bench of Gujarat High Court reported in AIR 1977, Gujarat page 113, A'bad Cotton Mfg. Co. v. Union of India and Ors.. In that case the writ petitioners challenged the actions of the Central Excise authorities based on the Trade Notice issued by the Collector. A contention was taken before the Hon'ble High Court of Gujarat that the writ petitioners cannot maintain the petition without exhausting an alternative remedy of appeal provided under the Central Excises and Salt Act, 1944. While refuting that contention the Gujarat High Court held that Sec. 35 of the said Act does not provide any appeal against such a trade notice. The trade notice was held to be an administrative direction.

7. Having regard to our view that the warning endorsed on the shipping bill and communicated to the Appellants by the Asstt. Collector by means of a letter dt. 15-2-83, and subsequently clarified by the Addl.

Collector is only an executive direction and not a decision or order within the meaning of those expressions and therefore, no appeal lies to the Tribunal under Clause (a) of Sub-section (1) of Sec. 129-A of the Act. We therefore, reject this appeal as incompetent.


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