Popular Dye Chem vs Union of India and others

Few facts must be stated in order to appreciate the shocking manner in which one Mr. S.K. Malhi, Collector of Customs, Appeals, Bombay, has acted in passing the order dated 31st December, 1986 against the petitioners in this petition.

The petitioners had filed Writ Petition No. 2656 of 1986 for the clearance of certain goods described by them as plastic scrap material. The Assistant Collector of Customs had already passed an order clearing the goods, but the authorities intercepted the goods by contending that what was being cleared was not scrap material but re-usable plastic material. Against this action of the authorities the petitioners filed the aforesaid Writ Petition No. 2656 of 1986.

On 22nd of October 1986, after hearing the Advocates for the petitioners and the respondents and after examining the samples which were produced before me for inspection, I issued a rule making it returnable in the 4th week of March, 1987. Interim relief was also granted in terms of prayer clause (c) of that petition on the condition that the petitioners will clear the goods by pulverising the same at their own cost as mentioned in paragraph 7 of the petitioners'' letter dated 6th October 1986. The effect of that order was that the plastic goods which were in the nature of scrap, according to the petitioners, had to be reduced to a condition which would make them unfit for re-use. In other words, it was to be reduced to scrap.

Against this order the respondents preferred an appeal, being Appeal No. 1026 of 1986. The Appellate Bench by its order dated 5th December, 1986 found no reason to interfere with the order passed by me but, however, directed the authorities to comply with the interim order passed by me on or before 15th December, 1986. From what is mentioned in a subsequent order dated 19th December, 1986 it is seen that the Appellate Bench gave liberty to the Collector of Customs, Appeals, to exercise powers of revision u/s 129D of the Customs Act.

Subsequently on 15th of December 1986, the Collector of Customs, Appeals, passed an order u/s 129D of the Customs Act setting aside the order of release of the goods passed earlier u/s 122 of the Customs Act by the Assistant Collector of customs on 18th of September 1986. It may be recalled that by this order the Assistant Collector had already directed the release of the goods, but the said goods had been intercepted by the authorities.

It was brought to the notice of the Division Bench on 19th of December 1986 that the order dated 15th December 1986 passed by the Collector of Customs, Appeals, was passed without giving notice to the petitioners let alone giving a hearing to them. The Appellate Bench, therefore, was compelled to treat the order of 15th December 1986 as non-est and set aside the same. The counsel for the respondents (appellants before the Appellate Bench) asked for time to comply with the interim order passed by me. The said prayer was refused. It is thus clear that the Collector of Customs, Appeals, had sufficient opportunity to know, if he had already not known, that before passing any order to the detriment of any party, that party must be given an opportunity of being heard.

Subsequently, the present petition had been filed by the petitioners in respect of similar goods which had been imported by them and which had been intercepted again by the authorities. Pendse J., on 12th December 1986, issued rule on this petition. He also directed that the respondents should carry out and complete the examination within four days from Monday the 15th December 1986, and allow the petitioners to clear the scrap material. Liberty was also given to the respondents to get the assessment order reviewed u/s 129D of the Customs Act within two weeks from the completion of the examination.

This petition has been placed before me for directions on the request of the Advocate for the petitioners. Mr. Bulchandani, learned Advocate, appears for the respondents, namely the Customs authorities, Dr. Kantawala points out a position, which has not been disputed by Mr. Bulchandani, that the order dated 31st December 1986 has been passed without issuing a show cause notice to the petitioners and without giving them an opportunity of being heard. In other words, the Collector of Customs, Appeals, Bombay has committed the same jurisdictional blunder which was brought to his pointed attention by the order passed earlier by the Division Bench on a 19th December, 1986. One fails to understand as to how an officer of the status of a Collector of Customs, who has been invested with the appellate powers and who is supposed to be exercising quasi-judicial, if not wholly judicial, powers, can act in such an irresponsible manner. Mr. Bulchandani made an attempt to distinguish the order in this case from the order which had been passed earlier and set aside by the Division Bench. According to Mr. Bulchandani, in the instant case necessary steps for exercising the powers u/s 129D of the Customs Act have been initiated, namely an appeal has been preferred by the department against the order of the Assistant Collector. But Mr. Bulchandani was unable to show that after that appeal has been filed a show cause notice has been given to the petitioners or an opportunity of being heard was afforded to the petitioners. Indeed, he had to admit that no show causes notice was given to the petitioners. Obviously, no opportunity of being heard was afforded to the petitioners. In law such an order is non-est but for the sake of abundant caution I declare that is non-est and is hereby set aside.

The obvious result of this order is to direct the respondents to release the goods forthwith, which shall be done on or before 12th January, 1987. The respondents are also directed to issue detention certificate in respect of the said goods for the period from 12th December, 1986 till clearance.