TMI Blog1988 (12) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for by the Department in their appeals and enhanced the redemption fine to 200% of the c.i.f. value and also imposed a personal penalty of Rs. 10,000/- under Section 112 of the Customs Act, 1962. The appeals filed against the Deputy Collector s order ordering confiscation of the goods by the appellants herein were also heard together by the Collector (Appeals) who rejected their appeals. 2. The facts in brief are that the appellants herein imported Inshell almond seeds and sought clearance under REP licence issued against Export Product G.2(i)(a) of Appendix 17 of Import Trade Control Policy in force at the relevant time. They claimed that the goods as seeds fall under the category of item indicated against S. No. (d) of the said export product in the Policy. A sample of the consignment was drawn and forwarded to the Horticulturist, Tamilnadu, for his opinion who opined that the seeds are fit for germination and viable for sowing. As almonds are dry fruits as known in the trade and are also consumer item of agricultural origin falling under S. No. 121 of Appendix 2(b) of the ITC Policy, the Customs House issued a query Memo, while processing the Bills of Entry filed for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s). The grounds of the Department s appeal was also enclosed to this communication. The appellants were also given notice of the Department s appeal by the Collector (Appeals) in his letter dated 28-11-1987. The appellants also filed appeals on their own against the Deputy Collector s order, after receipt of the copy thereof, questioning the confiscation of the goods. They also put forth their objection to the Department s appeal. The Collector (Appeals) on consideration of the appeals by the appellants as well as by the Department, rejected the appellants appeals and held that a higher fine in lieu of confiscation was leviable and fixed it at 200% of the c.i.f. value, and he also gave a finding that a penalty was imposable in the facts and circumstances of the case on the appellants, and imposed a penalty of Rs. 10,000/- on each of the appellants under Section 112(a) of the Customs Act, 1962. It is against this order that the present appeals have been filed. 3. Shri Nankani, the learned Counsel represented appellants Sun Export Corporation. Shri Habibulla Badsha, the learned Counsel represented appellants A.K. Exports and others. The case was argued by the learned Counsel Shri H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonance with the provisions of Section 129-D(2) which requires the Collector to direct the lower adjudicating authority to apply to the Collector (Appeals) for determination of the points arising out of the decision or order under review. The Collector s order in this case contains no such direction to the adjudicating authority viz. the Deputy Collector and was, therefore, ab-initio void. The learned Counsel further argued that another feature which shows that the Collector s direction under Section 129-D(2) is defective is that in that direction the points arising for determination out of the Deputy Collector s order have not at all been specified which is again a requirement under Sec. 129-D(2), and instead the Collector in the order is merely adopting the brief facts of the case and the grounds of appeal which is an enclosure to the order signed by Assistant Collector. Therefore, there has been no application of mind by the Collector for determining the issues arising out of the Deputy Collector s order, and apart from this, the learned Counsel urged that the appeal filed by the Department is not in accordance with Form C.A. 2 prescribed under the Customs (Appeals) Rules, 1982. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on their appeal by the Collector (Appeals), the learned Counsel pointed out that the very issue had come up before this Bench of the Tribunal in the case of MM. Exports v. C.C.E., Madras, 1988 (18) E.C.R. 283 which was also relating to import of almonds inshell being sought to be cleared against REP licence against the same commodity group G. 2 of Appendix 17 of ITC Policy 1985-88. The learned Counsel submitted that he would adopt the same arguments here too and would contend that the goods imported are seeds and not consumer goods. As regards the margin of profit on the goods the learned Counsel contended that reliance placed on Economic Times is erroneous as what appeared in that Newspaper was only a quotation whereas the margin of profit for the consignment imported at Madras ought to have been made on the basis of enquiries in the local market. Further, the quotation in the newspaper of 31-10-1987 which have been taken by the Department are not relevant for the import at Madras which took place earlier on 14-10-1987. He further pointed out that he understood that in an auction sale of the goods the Customs House itself could sell it only for a much lower margin. The Collecto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his discretion. The provisions of Section 129-D(2) is different which requires the Collector to satisfy himself after examining the records of an adjudication proceedings by a lower authority and then directing the adjudicating authority to apply to the Collector (Appeals) for determination of the points arising out of the order. The filing of the appeal then can be by another officer authorised by the Collector under Section 129-D(4). Therefore, these two Sections have, according to the Counsel, different object and have laid down different procedures. The learned Counsel further urged that under Section 128-A(3) the Collector (Appeals) is empowered only for enhancing the penalty or redemption fine after giving reasonable opportunity to the party concerned. From this, it follows, according to the learned Counsel, that where no penalty at all has been imposed there will be no question of an enhancement of a penalty and therefore, the Collector (Appeals) at appeal stage cannot impose penalty for the first instance in exercise of powers under Section 128-A(3). The other point made by the learned Counsel Shri Nankani, was with reference to the details of the sales of the goods by his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely the order. On 9-11-1987 the Deputy Collector s order was very much on record although due to administrative reasons its actual communication to the appellants was made subsequently. Since Collector had this order before him and the records relating to the issue of that order, he has applied his mind and given the direction for its review before the Collector (Appeals). The Deputy Collector s order was already signed, and on record, and that authority had, therefore, become functus officio and could not have changed the order by itself. Again whatever communicated to the appellants on 18-11-1987 was not actually the gist of the order, but an extract of the operative portion of the Deputy Collector s order dated 9-11-1987. In this connection he referred to the Section 8 files containing the Deputy Collector s order which was perused by the learned Counsels and by the Bench. The learned S.D.R, further contended that in deciding the case, the Collector (Appeals) has rightly relied upon CEGAT decision, which is quite appropriate in hierarchial system of quasi-judicial Tribunals, and referred in this connection to the Supreme Court s observation in the case of Jain Exports v. Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation was already contained in the CEGAT SRB decision followed by the Collector (Appeals). Even without the CCIE s clarification the Collector (Appeals) had shown that by commercial parlance the goods art known as dry fruits, and also the significant absence of any large scale cultivation of almonds in India which is also a surrounding circumstance. The learned S.D.R. also submitted that the ERB decision in Metro Exporters case relied upon by the appellants was not on all fours with the present case where there was a formal order passed by the Deputy Collector duly approved by him on records and the full extract thereof had in fact been communicated to the appellants. The further point made that the Collector (Appeals) has no power to impose penalty for the first instance also is not valid as according to the learned S.D.R. when the statute confers powers on the Collector (Appeals) for enhancing a penalty, it logically follows that the power to impose it in the first instance goes with it. 7. We have carefully considered the submissions made by the learned Counsels and the learned S.D.R. It has been urged on behalf of the appellants that the departmental appeals before the Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor has in result directed the filing of the appeal before Collector (Appeals) for enhancing redemption fine and for imposing penalty. We find that the appeal filed before the Collector (Appeals) is also only on the above points. Therefore, there has been undoubtedly application of mind by the Collector before he issued the direction for review under Section 129-D(2). The plea that order of the Collector dated 18-11-1987 itself speaks of only public interest and Government revenue as the basis, when considered in the above context, has to fail as it then becomes clear that the narration in the order is by way of a summation. It has further been urged that at the time the Collector passed the order no order of the Deputy Collector existed and none had been communicated and tendered to the appellants and the Deputy Collector s order communicated did not have any reference to cash bills at all for determining margin of profit and redemption fine. However, we find that it is evident from the copy of Deputy Collector s order that it had been passed on 9-11-1987 and despatched on 11-12-1987. Therefore when the Collector called for the records under Section 129-D(2) and issued the direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch opinion of the Ministers may amount the decision of the Government it must be communicated to the person concerned and until the order is communicated to the person affected by it, it would be open to the Council of Ministers to consider the matter over and over again and therefore, till such communication of the order by the State, the order cannot be regarded as anything more than provisional in character. We do not find any relevance at all to the ratio of the decision to the facts and circumstances of this case. This is a case where the adjudicating authority viz. the Deputy Collector has indisputably passed an order and review of the same under Section 129-D(2) of the Act by the Collector does not depend upon communication of the same to the respondent herein. The order of the Deputy Collector was very much in existence and in exercise of the power of review, a statutory direction has been given by the Collector for preferring an appeal before the competent authority and the respondent had participated in the appeal proceedings after having received the, Order of Adjudication and therefore, cannot claim to have suffered any prejudice merely because the order of adjudicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor although he may not be the officer who had adjudicated the case. In this case the learned SDR informed us that the adjudicating officer was not available at the time Collector passed the order under Section 129-D(2), being away on leave. 8. As regards the grounds in the Departmental appeal, it has been urged that reliance has been placed on certain cash bills which are not referred to at all in the Deputy Collector s order and that review cannot lake place on fresh material. However, it is seen that the Collector while examining the records of the case leading to the adjudication order as required under Section 129-D(2) had found that the Deputy Collector had considered and relied upon certain cash bills which were not relevant in arriving at the margin of profit and had ignored other sources, and the Collector had then validly referred to it in the Department s appeal. Even otherwise if the adjudicating authority fixes a redemption fine based on certain data and passes an order without indicating any basis at all therefor, then, that itself could be a ground for review. Further, when the clearance of a consignment of one and the same importer is sought by splitting it up and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so bound by this discipline. The Hon ble Supreme Court had emphasised this principle in the case of Jain Export v. Union of India - (1988) 3 SCC 579, as follows : In Casselly and Co. v. Broomy, the Lord Chancellor delivering the opinion of the House observed : ...........I hope it will never be necessary to say so again that in the hierarchial system of courts which exists in this country, it is necessary for each lower tier, including the Court of Appeal, to accept ltyally he decisions of the higher tiers. This Court in Kaushalya Devi Bagra v. Land Acquisition Officer has clearly approved this position. There is abundance of authority that quasi-judiciali tribunals too are bound by this rule. 10. As regards the merits of the appellants, it has been urged that they were adopting the same arguments as in M.M. Exports case and the Horticulturist Certificate obtained by the Customs House confirmed that goods imported by them are only seeds capable of germination and that their case should not be decided merely on the basis of Chief Controller of Imports and Exports clarification. However, even without considering the clarification of the Chief Controller of Imports and Exports, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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