Circular No. 502/68/99-Central Excise

F.NO. 389/44/99-JC(BME)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

New Delhi, the 16th, December, 99

Subject: Adjudication order — corrigendum – not to be issued by adjudicating officer

While reviewing an Order-in-Original passed by a Commissioner, it was observed that the said Commissioner made substantive changes in his order by issuing a corrigendum nearly 10 months after issue of the order-in-original. It was felt, prima facie, that the substantive changes brought about by the corrigendum may be beyond the scope of Section 154 of the Customs Act, 1962 and may thus not stand judicial scrutiny by the appellate authorities.

2. The Board, therefore, referred the matter to the Law Ministry and sought their opinion whether the corrigendum issued subsequent to Adjudication Order passed by the Commissioner is legally valid and tenable considering its nature and relevance to the adjudication order as well as the Provisions of Section 21 of the General Clauses Act. The opinion received from the Law Ministry is reproduced below for your information and guidance.

Law Ministry’s Opinion Ministry of Law, Justice & C.A. Department of Legal Affairs

The referring Department has sought our advice whether the corrigendum issued by the Commissioner of Customs, dated 12.8.99 to its earlier order dated 16.10.98 is legally valid and tenable.

2. The Commissioner of Customs, vide his order dated 16.10.98 adjudicated the matter and passed the orders as can be seen at pages 23-24 of his order placed in the file. Subsequently, almost after 10 months, he has issued a corrigendum wherein the rate of duty and penalty indicated in the earlier order were substituted. Now, the question for consideration us whether this is a valid order.

3. Admittedly, Commissioner of Customs is not a court and he exercise only a limited quasi-judicial function. In a number of cases, it has been held that the order of customs authorities imposing confiscation and penalties to quasi-judicial in nature and the customs authorities has the duty to act judiciously in deciding the question of confiscation and penalty. The quasi-judicial decision is subject to some measures of judicial procedure such as the principle of natural justice. In this instant case, the penalty and duty were enhanced without hearing the parties and therefore, prima facie, we are of the view that the principles of natural justice have not been followed.

We, in this regard advert to a Supreme Court judgement in Lala Shri Bhagwan Vs Ram Chand and other (AIR 1965 SC 1767) wherein their Lordship have held that…..

“on the other hand, authorities or bodies which are given jurisdiction by statutory provisions to deal with the rights of citizens, may be required by the relevant statute to act judicially in dealing with matters entrusted to them. An obligation to act judicially may, in some cases, be inferred from the scheme of the relevant statute and its material provisions. In such a case, it is easy to hold that the authority or body must act in accordance with the principles of natural justice before exercising its jurisdiction and its powers, but it is not necessary that the obligation to follow the principles of natural justice must be expressly imposed on such an authority or body. If it appears that the authority or body has been given power to determine questions affecting the rights of citizens, the very nature of the power would inevitably impose and limitation that the power should be exercised in conformity with the principles of natural justice. Whether or not such an authority or body is a tribunal, would depend the nature of the power conferred on the authority or body, the nature of the rights of citizens, the decisions of which falls within the jurisdiction of the said authority or body, the other relevant circumstances……”

4.  Commissioner of Customs is no doubt a quasi-judicial body required to work within the provisions of law. Neither the powers of review nor correction to the order is available under the Customs Act to the Commissioner of Customs to exercise such powers. He becomes functions officio after signing the adjudication order and, therefore, he cannot lay his hands again on the order. The corrigendum is tantamount to review of the decision which is not provided under Law, and therefore, we are of the view that this impugned order is not legally sustainable notwithstanding Section 21 of the General Clauses Act”.

Addl.Legal Advisor

3. The above advice of the law Ministry may please be noted by all concerned for information guidance and necessary action. Where any significant change in the order becomes necessary after the order has been issued which cannot be termed as clerical or arithmetical or typographical mistake, proposals for review may mooted to appropriate authority instead of taking recourse to corrigendum.

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