ORDER
S. Kalyanam, Member (J)
1. This appeal, filed by the Collector of Customs & Central Excise, Trichy, is directed against the order of the Collector of Customs (Appeals), Madras, dated 1-2-1985 setting aside the order of the Assistant Collector of Central Excise, Customs Division, Nagapattinam dated 31-8-1982 exonerating the respondent herein of the charge under Section 113 (d) of the Customs Act, 1962 hereinafter referred to as the Act.
2. The respondent herein were proceeded against as per law in respect of a seizure of a consignment of 540 numbers of sarees valued at Rs. 21.600/-, effected on 5-12-1981 at about 7.30 P.M. at the Office of Southern Roadways Limited, Pattukottai (Thanjavur Dist). The Assistant Collector of Central Excise, Nagapattinam, who originally adjudicated the matter, absolutely confiscated the goods under seizure and imposed a penalty of Rs. 10.000/- under Section 114 of the Act by his order dated 31-8-1982 against which the respondent herein preferred an appeal to the Collector of Customs (Appeals), Madras, which was allowed by order dated 22-12-1981 in No. C24S/127/82 as against which the Department preferred an appeal before the Tribunal in Appeal No. CD/267/83. The Tribunal by order dated 19-8-1983 remitted the matter back to the Collector of Customs (Appeals) for disposal in the light of the observations contained in the order of the Tribunal and particularly with reference to the applicability of the first part of Section 113(d) of the Act referring to “any goods attempted to be exported”. On remand the Collector of Customs (Appeals) allowed the same in favour of the respondent herein against which the Department has again come by way of appeal before the Tribunal.
3. Shri K. K. Bhatia, the learned SDR appearing for the appellant submits that under the impugned order the Collector of Customs (Appeals) has placed reliance on books and accounts of Ashiq Trust and the respondents relating to the supply of textiles to Maharani Silk Palace, Pattukottai and Ragini Silk Palace on regular basis, besides delivery memo books and way bills and books of accounts showing the pattern of sale. The learned SDR urged that under the impugned order not only the above said evidence has been received by the appellate authority at the request of respondent herein but reliance has also been placed without the Department being afforded an opportunity of being heard. The learned SDR drew my attention to Rule 5 of the Customs (Appeals) Rules, 1982 and contended that the Collector of Customs (Appeals) shall not take any evidence produced under Sub-rule 1 of Rule 5 of the Customs (Appeals) Rules, 1982 unless the adjudicating authority or the officer authorised in his behalf by the said authority has been allowed a reasonable opportunity to examine the evidence and produce any evidence in rebuttal thereof. Therefore the SDR urged that non-compliance with the mandatory provisions of Rule 5(3) of the Customs (Appeal) Rules, 1982 would vitiate the impugned order appealed against.
4. Shri Kothari, the learned counsel for the respondent herein contended that the additional evidence relied upon under the impugned order cannot be said to cause any prejudice to the department and at any rate the appellate authority even in terms of Sub-rule 4 of Rule 5 of the Customs (Appeal) Rules, 1982 would be entitled to direct production of any documents or examination of any witness for just and proper disposal of the appeal before him. The learned counsel further submitted that the only issue that had to be decided by the appellate authority consequent on the order of the remand by the Tribunal was to consider the scope of first part of Section 113(d)of the Act and reach a finding as to whether the circumstances would bring the respondent within the mischief and ambit of the expression “attempted to export” under Section 113 (a) and (b) of the Act. Therefore even if reliance had been placed under the impugned order on the evidence tendered by the respondents the same would be relevant only for the limited purpose of ascertaining the bona fides of the respondent and will in no way affect the legality of the finding reached on other evidence as well.
5. I have considered the submissions of the parties herein. The short question that arises for my determination in the appeal is whether the Collector of Customs (Appeals) has conformed to Rule 5 of the Customs (Appeals) Rules, 1982. For the purposes of convenience I set out the relevant Rule 5 hereunder:-
5 Production of additional evidence before the Collector (Appeals)-
(1) The appellant shall not be entitled to produce before the Collector (Appeals) any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the adjudicating authority, except in the following circumstances, namely :
(a) where the adjudicating authority has refused to admit evidence which ought to have been admitted; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the authority; or (c) where the appellant was prevented by sufficient cause from producing before the authority any evidence which is relevant to any ground of appeal; or (d) where the adjudicating authority has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under Sub-rule (1) unless the Collector (Appeals) records in writing the reasons for its admission. (3) The Collector (Appeals) shall not take any evidence produced under Sub-rule (1) unless the adjudicating authority or an officer authorised or an officer authorised in this behalf by the said authority has been allowed a reasonable opportunity- (a) to examine the evidence or documents or to cross-examine any witness produced by the appellant; or (b) to produce any evidence or any witness in rebuttal of the evidence produced by the appellant under Sub-rule (1). (4) Nothing contained in this rule shall affect the powers of the Collector (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal.
The fact remains that the respondent herein has tendered additional evidence referred to supra before the Collector of Customs (Appeals) as evidenced by the observations of the impugned order itself and the impugned order would indicate that the appeal was also adjourned on more than one occasion to enable the respondent herein to produce certain documents. In the order it is observed.
“From the evidence cited by the appellant’s counsel that a similar transaction of despatch of goods to Maharani Silk Palace from their associates concerned which was also sent by Southern Roadways only and seized earlier in February, 1982 were released to by the Additional Collector holding that it was a genuine and legal transaction also established the credentials of the claim. The description of the goods involved in the alleged said offence is also of the same type of goods currently involved.”
Admittedly in respect of the additional evidence tendered by the respondent herein before the Collector of Customs (Appeals) no opportunity at all was afforded either to the adjudicating authority or to the officer authorised in this behalf by the said authority to examine the evidence or documents or to produce any evidence or witness in rebuttal of the evidence produced by the respondent as prescribed under Rule 5(3) extracted above. It need hardly be emphasised that Rule 5(3) referred to supra only incorporates the quintessence of the principles of natural justice and the non-compliance of the same in the impugned order would render it legally unsustainable. The plea of the learned counsel for the respondent that the Collector of Customs (Appeals) would have power suo moto to direct production of any document or examination of any witness and therefore no opportunity need be given to the Department is legally untenable. Even if the Collector of Customs (Appeals) were to direct production of any document suo moto, the party against whom the said document is directed to be produced should be afforded a reasonable opportunity of being heard. In the instant case admittedly the power vested in the appellate authority under Sub-clause 4 of Rule 5 was not exercised. The plea of the learned counsel for the respondent that the additional evidence tendered by him was only to prove the bona fides and status of the respondents would not in any way detract from the mandatory requirement of affording an opportunity to the other party as envisaged and enjoined by Rule 5(3) aforesaid. Finally the learned counsel for the respondent urged that this Rule 5(3) cited above is beyond the rule making power provided for by Section 156 of the Act. I am afraid this statutory Tribunal has no jurisdiction under law to traverse beyond the confines of law and consider the vires of a rule. I therefore reject this submission of the learned Counsel.
6. I therefore set aside the impugned order appealed against, allow the appeal and remit the matter back for reconsideration by the Collector of Customs (Appeals) as per law after affording the Department an opportunity of being heard in respect of the additional evidence produced and relied upon by the respondent herein as indicated above. Since the goods namely textiles under seizure are lying with the Department since 5-12-1981 it would be just and proper to dispose of the appeal at the earliest opportunity preferably within 2 months from the receipt of the records. In the peculiar, facts and circumstances of the case the respondent need not be insisted to make a prior deposit of penalty imposed on him under the original adjudication order as the same was already waived and dispensed with by the appellate authority.