Writ Petition No.26 of 2003

21st January, 2003

Petitioner Counsel: Mr. C. HARISHANKAR, RAVI HIRANI
Respondent Counsel: Mr. V. M. PARSHURAMI

JUDGMENT

J. P. DEVADHAR, J.:- Rule. Rule returnable forthwith. By consent of the parties, the petition is taken up for final hearing.

2. The Petitioner who arrived by Emirates flight from Dubai at Chhatrapati Shivaji International Airport, Sahar, Mumbai on February 9, 2001 was found to carry 200 pieces of foreign mark gold in his baggage valued at 1.02 crores in the local market. The said gold was concealed in cigarette packets contained in his baggage and the Petitioner wanted to clear the same clandestinely without declaring it. The said goods were sized and in the statement recorded under Section 108 of the Customs Act, the Petitioner admitted his complicity in the smuggling of the seized goods. After issuing show cause notice dated 25th September, 2001, the Commissioner of Customs (Adjudication) by order-in original dated March 7, 2002 confiscated the seized goods and inter alia levied penalty of Rs.5,00,000/- on the Petitioner under Section 112(a) and 112(b) of the Customs Act, 1962 ('Act' for short). Challenging the said order, the Petitioner filed an appeal before the Customs, Excise & Gold Appellate Tribunal, Mumbai and the same is pending. During the pendency of said appeal, the present petition has been filed by the Petitioner challenging the jurisdiction of the Commissioner of Customs (Adjudication) to adjudicate the show cause notice dated 25th September, 2001.

3. Mr. C. Harishankar, learned Counsel appearing on behalf of the Petitioner submitted that in view of para 73-C of the Adjudication Manual of the Bombay Customs House, the jurisdiction of the Commissioner of Customs (Adjudication) to adjudicate upon any goods imported as baggage was expressly barred and, therefore, the adjudication order passed by the Commissioner dated March 7, 2002 was without jurisdiction. He submitted that under para 73-C of the Adjudication Manual, only the Deputy Commissioner of Customs was empowered to adjudicate the show cause notice. He submitted that if the Deputy Commissioner had adjudicated the impugned show cause notice, then the Petitioner would have had a right of appeal before the Commissioner (Appeals) under Section 128 of the Act and thereafter a further right of revision to the Central Government under Section 129-DD of the Act. He submitted that the adjudication of the show cause notice by the Commissioner, in contravention of Para 73-C of the adjudication Manual, has caused serious prejudice to the Petitioner because against the order of the Commissioner, the appellate remedy is to file appeal before C.E.G.A.T. under Section 129-A, because no appeal under Section 128 before Commissioner (Appeals) is permissible against an order passed by the Commissioner. It was submitted that if the matter was adjudicated upon by the Deputy Commissioner then the Petitioner would have had two remedies, that is, the remedy of appeal before Commissioner (Appeals) and thereafter, the remedy of revision before the Central Government. He submitted that in revision there was no requirement of predeposit of the demand, whereas in the appeal before C.E.G.A.T., the Petitioner is required to make predeposit unless waived by the Tribunal. He submitted that although under Section 122 of the Act, the Commissioner had unlimited jurisdiction of adjudication, reading Section 129-A, Section 129-DD of the Act with Para 73-C of the adjudication Manual, it was clear that the jurisdiction of the Commissioner was barred in respect of the goods imported as baggage and in the present case since the Commissioner adjudicated upon the goods imported as baggage, the said order of the Commissioner is liable to be quashed and set aside.

4. The entire case of the Petitioner is based upon Para 73-C of the Adjudication Manual at Mumbai which reads as under : Para 73-C, Adjudication Manual :

"73-C. Enhancement of Adjudication Powers of Deputy Collectors of Customs-

In the Finance Bill 1984, which received assent of President on 11th May, 1984 and enacted as Finance Act, 1984 (21 of 1984) certain categories of cases under the Customs Act, 1962, as spelt out in the clause 40 of the Finance Bill, 1984, amending section 129-A of the Customs Act, 1962 have been taken away from the jurisdiction of the Customs, Excise and Gold Control Appellate Tribunal (CEGAT). Consequent upon the exclusion of the jurisdiction of the Appellate Tribunal, a provision has been made for revision by the Central Government of Orders-in-Appeal passed in such cases. With a view to ensuring that, in all cases pertaining to the excluded categories, the first appeal lies to the Collector (Appeals) and the second to the Revisionary Authority i.e. the Joint Secretary to the Govt. of India, Ministry of Finance, (Dept. of Revenue), New Delhi, it has become necessary to invest the Deputy Collectors with full statutory powers of adjudication in relation to the excluded categories of cases viz.

(a) Any goods imported or exported as baggage;

(b) Any goods loaded in a conveyance for importation into India, but which are not unloaded at their place of destination in India, or so much of the quantity of such goods as has not been unloaded at such destination are short of the quantity required to be unloaded at their destination.

(c) Payment of Drawback as provided in Chapter X and the rules made thereunder.

2. Under section 122 of the Customs Act, 1962, Deputy Collectors are empowered to adjudicate cases without any value limit, although by issue of executive instructions their adjudication powers have been restricted to monetary ceilings.

3. In the context of the new provisions as contained in the Finance Act, 1984, it has, therefore, been decided by the Government that, in partial modification of Board's earlier instructions on the subject, the Deputy Collectors may exercise full statutory powers vested in them under section 122 of the Customs Act, 1962, in adjudicating cases pertaining to the excluded categories only. Powers of adjudication of the Deputy Collectors in respect of cases other than the aforementioned excluded categories of cases however, would remain unchanged.

It should be ensured that the cases falling in the excluded categories which have been taken away from the jurisdiction of the Tribunal are adjudicated at the level of the Deputy Collectors and that the preamble to the orders contain clear directions that first appeal against that order will lie with the concerned Collectors (Appeals) and the second appeal will lie with the Revisionary Authority, i.e., the Joint Secretary to the Govt. of India, Ministry of Finance, (Dept. of Revenue), New Delhi. Additional Collector is also, basically a Deputy Collector and while adjudicating baggage cases he should adjudicate it as Deputy Collector."

(emphasis supplied)

5. Section 122 of the Customs Act reads as under :

"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 Commissioner of Customs or a Deputy Commissioner of Customs;

(b) where the value of the goods liable to confiscation does not exceed fifty thousand rupees, by an Assistant Commissioner of Customs;

(c) where the value of the goods liable to confiscation does not exceed two thousand five hundred rupees, by a Gazetted Officer of Customs lower in rank than an Assistant Commissioner of Customs."

6. From Section 122 of the Act and Para 73-C of the adjudication Manual, it is clear that although under Section 122 of the Act the powers of the Commissioner and the Deputy Commissioner are unlimited, by executive instructions the powers of the Deputy Commissioner were restricted to monetary ceilings. Thus, under para 73-C of the adjudication Manual, the adjudication powers of the Deputy Commissioner are restricted and not the adjudication powers of the Commissioner.

7. By Finance Act 21 of 1984, Section 129-A was amended and Section 129-DD was introduced to the Act with effect from 11-05-1984. Prior to amendment of Section 129-A, appeal against the adjudication order in respect of imported baggage passed by the Commissioner as well as the Commissioner (Appeals) were maintainable before C.E.G.A.T. However, by amendment to Section 129-A, appeal against the order of Commissioner (Appeals) before the C.E.G.A.T. pertaining to goods imported as baggage was barred and by inserting Section 129-DD it was provided that against the order of Commissioner (Appeals) pertaining to goods imported as baggage, a revision application would lie to the Central Government. In other words, by 1984 amendment, in respect of the goods imported as baggage, the appellate remedy under Section 129-A of the Act was restricted to appeals arising out of the order passed by the Commissioner and not against the Commissioner (Appeals) and Section 129-DD provided that in respect of goods imported as baggage, against the order of the Commissioner (Appeals), a revision application would lie to the Central Government.

8. In the light of amendment to Section 129-A and introduction of Section 129-DD by Finance Act, 1984, in para 73-C of adjudication manual of the Customs House it was provided that the powers of Deputy Commissioner which was hitherto administratively restricted to monetary ceilings, stands enhanced so as to empower the Deputy Commissioner to adjudicate upon the categories which were excluded from the purview of Section 129-A of the Act. In other words, para 73-C of the adjudication Manual merely enhances the powers of Deputy Commissioner. Para 73 of the adjudication Manual does not deal with the jurisdiction of the Commissioner to adjudicate upon the goods imported as baggage. Para 73-C does not seek to curtail the powers of the Commissioner. Therefore, the entire case of the Petitioner that para 73-C of the adjudication Manual prohibits the Commissioner from adjudicating the goods imported as baggage is totally misconceived.

9. It is true that in view of enhancement of the adjudication powers, the Deputy Commissioner can now adjudicate upon any goods imported or exported as baggage but that does not in any way curtail or restrict the unlimited power of adjudication conferred upon the Commissioner. Even after amendment to Section 129-B and insertion of Section 129-DD, the unlimited power conferred upon the Commissioner to adjudicate the matter under Section 122 of the Act remains unaltered. Even para 73-C of the adjudication Manual does not seek to administratively curtail the unlimited adjudication powers conferred upon the Commissioner under Section 122 of the Act. Under the circumstances, it is not open to the Petitioner to contend that the Commissioner had no jurisdiction to adjudicate upon the show cause notice dated 25-09-2001.

10. In this view of the matter, we see no merit in the contention raised on behalf of the Petitioner.

11. Accordingly, the petition fails and the Rule is discharged with no order as to costs.

Petition dismissed.