COLLECTOR OF CUSTOMS Vs. COMPUTER GRAPHICS (P) LTD.

JUDGEMENT

(1.) THIS appeal of the department is against an order passed by the Collector of Customs (Judicial) on 6.7.90. The respondents were a SSI unit registered for slitting and cutting of graphic art films. As actual users (industrial), they imported graphic art films and filed Bill of Entry (warehousing) dated 1.6.90 for clearance of the goods under OGL in terms of the Import Policy 1990 -93. In terms of Notification dated 18.7.1986 issued by the Central Government under Section 29B(2) of the Industries (Development and Regulation) Act 1951, the respondents had to have a licence issued by the Central Government for the purpose of carrying on their business. It appears from the records that they applied to the Central Government for grant of such licence, otherwise called 'COB' (carry -on -business) licence, in respect of confectioning /slitting of photographic colour paper and that such licence was issued to them in December, 1988. At the time of filing of the above Bill of Entry, any COB licence for the activity of confectioning/slitting of graphic art films was not available with the importer. Hence, the Collector of Customs did not permit clearance of the goods under OGL. He confiscated the goods under Section 111 (d) of the Customs Act, with option for redemption on payment of fine of Rs. 20 lakhs. A personal penalty of Rs. 1 lakh was also imposed on the party. That order was passed on 22.6.90. The respondents did not choose to challenge it. However, they approached the Collector with an "additional licence" (20.4.90) purchased from the market. In terms of that licence (issued by the Joint Chief Controller of Imports and Exports), the subject goods could be imported. Ld. Collector accepted this licence and allowed clearance of the goods by dispensing with actual (industrial) user condition. This order was issued on 6.7.90 and was in the nature of review of the earlier order dated 22.6.90. CBEC reviewed the Collector's second order on the ground that he had no power of review. Hence the present appeal.

(2.) LD . SDR submits that ld. Collector had no power of review and hence could not have validly passed the impugned order. The earlier order dated 22.6.90 could have been appealed against by the party and, in such proceedings, they could have sought appropriate relief on the strength of the additional licence. Ld. Counsel for the respondents argues that the impugned order cannot be strictly said to be a review of the earlier order of the Collector and that it should be treated as an order rectifying an error apparent from the record. Ld. Counsel has proceeded to point out other infirmities of the order dated 22.6.90. The argument is that the Collector, being a statutory authority, had inherent power to rectify his own mistakes. In this context, support is claimed from the Supreme Court's judgment in ITO v. M.K. Mohammed Kunhi [71 ITR 815]. Ld. Counsel has focussed on the following observations contained in the apex Court's judgment. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effect (Sutherland's Statutory Construction, third edition, Articles 5401 and 5402). The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective. In her rejoinder, ld. SDR refers to the issue considered by the apex Court and submits that their Lordships were considering the question whether the Income tax Appellate Tribunal had the power under Income tax Act to stay recovery of an amount of penalty during the pendency of an appeal before it. It is submitted that what was being considered was the scope of an existing provision of the Income tax Act and not whether the Tribunal had inherent power or not. Reference has also been made to a judgment of the Madras High Court passed in the appellant's own case vide Computer Graphics Pvt. Ltd. v. CCE [1999 (110) ELT 511 (MAD)]. Ld. SDR has particularly referred to para 13 of the High Court's judgment which contains an extract of a letter written to the assessee by one Shri K.C. Kapoor, Desk Officer, Department of Industries.

(3.) WE have given careful consideration to the submissions made by both sides. The Collector's first order is not under challenge before us. It was against the assessee and they did not challenge the same. Ld. Collector appears to have reviewed that order within 15 days after taking on record the additional licence produced by the party. This licence was not on record before the Collector when he passed the first order. When he passed that order, what was placed before him was a letter of Shri K.C. Kapoor, Desk Officer in the Ministry of Industries, Government of India and it was urged that the letter be treated as interim 'COB' licence. That very letter, later on, came to be examined by the High Court and the Court refused to accept it as an interim COB licence vide para 13 and 14 of the High Court's judgment. We have also perused the regular COB licence ["additional licence"] produced by the party before the Collector. That was a licence issued in respect of photographic colour paper and not in respect of graphic art film. Ld. Collector chose to allow clearance of graphic art film on the basis of COB licence pertaining to a different commodity.