JUDGMENT
G.T. Nanavati, J.
1. Mafatlal Industries Limited, petitioner No. 1 (hereinafter referred to as “the petitioner”), imported 525 M.Ts. of “Mono Ethylene Glycol” in March, 1990. The consignment arrived at Kandla Port in a vessel named “m.v. BOW FALCON”. South India Corporation (Agencies) Limited, shipping agent of the vessel, filed a declaration on 12-3-1990 that the vessel was expected to arrive to Kandla on 15-3-1990. On 13-3-1990, the Agent also submitted to the Assistant Collector an Import Manifest. An application for Entry Inwards was also given on that day. As the vessel did not arrive on 15-3-1990, as expected, a fresh declaration was filed, mentioning therein that the vessel was expected to arrive at Kandla Port on 17-3-1990. On 16-3-1990, the petitioner filed a bill of entry for home consumption in respect of the said goods. The vessel actually arrived on 17-3-1990 and berthed at Inner Anchorage of 19-3-1990 and an Arrival Report to that effect was given to the Customs House, at Kandla. Necessary declaration and other required documents were also filed and a request was made to the Assistant Collector of Customs to depute an Officer of Customs on that day, to complete the arrival boarding formalities. All the boarding formalities were over on 19th March, 1990. However, in view of the public notice, dated 20-2-1990, issued by the Collector of Customs and Central Excise, Rajkot, the concerned Customs Officer did not himself grant the entry inwards, but made an endorsement that it will be granted by the Assistant Collector. Moreover, because of the public notice, the Shipping Agent was required to approach the Traffic Department of the Kandla Port Trust for obtaining a certificate to the effect that the vessel was ready for discharging the cargo. The Department did not grant such certificate on 19-3-1990 and instead, granted the same only on 20-3-1990.
2. It is the petitioner’s case that, it was because of the public notice that the Master of the vessel approached the Assistant Collector of Customs on 20-3-1990, with a Certificate of Readiness as regards the vessel’s readiness to unload the cargo, duly confirmed by the Traffic Department of the Kandla Port Trust. Thereafter, the Assistant Collector granted entry inwards to the said vessel. As the entry inwards was granted on 20-3-1990 and not on 13-3-1990, the petitioner became liable to pay customs duty on the said imported goods at the rate of 105% + 45% + 15%, which became effective from 20-3-1990. If the entry inwards had been granted on 19-3-1990, the petitioners would have been required to pay duty at the rate of 45% + 45% + 15%. It is the petitioner’s case that the public notice issued by the Collector was clearly beyond his authority, inasmuch as he had no power to issue such public notice and the notice is also ultra vires Section 31 of the Customs Act. As paid public notice was, thus, illegal and as the vessel was otherwise scheduled to discharge the cargo on 19-3-1990, the petitioners really became liable to pay duty, at the rate prevalent on 19-3-1990 and the action of the respondents in levying duty at the higher rate prevalent on 20-3-1990 is also illegal. The petitioners, therefore, want this Court to quash said public notice and direct the Assistant Collector of Customs, Kandla to pass an order, granting entry inwards to the said vessel as on 19-3-1990 and assess the petitioners’ goods brought by the said vessel at the rate of 45% + 45% + 15%, which was in force on 19-3-1990.
3. The respondents, on the other hand, in their reply affidavit, have come out with a case that, as the Master of the vessel himself had given declaration that the vessel was ready for discharging the cargo at 7.00 hours on 20-3-1990, entry inwards could not have been granted on 19-3-1990 and that it was rightly granted on 20-3-1990. Their case is that entry inwards can be granted to a vessel only when the vessel is found ready to discharge its cargo. As m.v. “BOW FALCON” had not taken berth on 19-3-1990, it was not ready to discharge the cargo on that day and it became ready to discharge the cargo only on 20-3-1990 after it had berthed at 7.00 A.M. on that day. In this case, entry inwards was granted at 8.00 A.M., soon after it was found that the vessel was ready for discharging the cargo.
4. What is contended by the learned counsel for the petitioners is that granting of entry inwards is a statutory function to be performed by the Customs Officer and statutory consequence as regards the rate of duty follows therefrom. It is not only statutory but quasi-judicial in nature inasmuch as his decision not to grant entry inwards when required may lead to adverse consequences. He further submitted that discretion of a quasi-judicial authority cannot be fettered by administrative instructions. The direction which the Collector had given, was not by way of supplementing the statutory provisions, but it added to the statutory conditions, subject to which entry inwards could be granted and thus interfered with the restricted the discretion of the Customs Officer. In the alternative, he submitted that as granting of entry inwards is a statutory function, it was not open to the Collector, in exercise of his administrative powers, to impose conditions not contemplated by the Act and which had the effect of disturbing the statutory consequence. He submitted that under Section 151A of the Customs Act, 1962, only the Board is empowered to issue such orders, instructions an directions to the Officers of the Customs as it may deem fit for the purpose of uniformity in the classification of goods or with respect to the levy of duty thereon. No such power is conferred upon the Collector and, therefore, the public notice issued by him must be regarded as without any authority of law.
5. In support of his submission that the discretion of a quasi-judicial authority cannot be restricted by administrative directions, the learned counsel relied upon the decision of the Supreme Court in S.I. Sachdev and Others v. Union of India and Ors. (AIR 1981 SC 411), decision of the Karnataka High Court in Mangalore Chemicals & Fertilisers Ltd. & Ors. v. Assistant Collector of Central Excise, Mangalore & Ors. [1986 (23) E.L.T. 48], and the decision of the Delhi High Court in Madras Rubber Factory Ltd. v. Union of India & Ors. [1981 (8) E.L.T. 804].
6. It is well settled that decision of judicial and quasi-judicial authorities cannot be fettered by administrative instructions. The learned counsel appearing for the respondents rightly did not dispute the correctness of this proposition. But he submitted that the power vested in the Customs Officer to grant entry inwards is administrative and not quasi-judicial.
22-10-1991
7. By passing an order granting entry inwards, the Customs Officer does not decide any right or liability of the Master of the vessel. What he is required to do is to check the cargo mentioned in the Import Manifest and other goods shown in other lists filed by the Master of a vessel and satisfy himself about correctness of the same. If satisfied, he has to pass an order for granting entry inwards. In pursuance of such an order, an entry in respect of the vessel is made in the Register meant for such purpose, and the said vessel is thereafter permitted to discharge the cargo. Thus, the act performed by the Customs Officer is purely administrative and, therefore, the contention that passing of an order granting entry inwards is a quasi-judicial function cannot be accepted. For this reason, the decision of the Bombay High Court in Cawasji Behramji & Co. v. H. N. Safi, reported in 1990 (49) E.L.T. 161 is also of no help to the petitioners. In that case, it was held that the directions, which were given by the Collector of Customs to the Commissioner, were in respect of his quasi-judicial power and a fetter upon exercise of that quasi-judicial function; and were not merely administrative directions, in that case, the Court examined the power of the Commissioner to grant or not to grant exemption for remission of duty on pilfered, lost or destroyed goods and held that, it is a quasi-judicial power.
8. We will now deal with the contention that, even if the function, which the Customs Officer has to perform while granting entry inwards is regarded as administrative, the Collector had no power to give the direction contained in the public notice dated 20-2-1990 that during the “special period” i.e. from 18-3-1990 to 24-3-1990, a certificate confirming the steamers readiness to unload cargo from the authorised person of the traffic department of Kandla should invariably be attached with the application for granting entry inwards should not be granted by the Officer on board. It was submitted that the direction given by the Collector was dehors the requirement of the Act and the Rules and without any justification, it restricted the power of the proper officer to grant entry inwards before the vessel had actually berthed, even though it was ready to discharge the cargo. He submitted that in view of the unreasonable restriction put upon the power of the proper Officer by the Collector by issuing the public notice, the proper Officer could not grant entry inwards on 19th March, 1990 and it was for that reason that the petitioner was required to pay under protest customs duty at a higher rate.
9. In order to appreciate this contention, it is necessary to refer to the relevant provisions of the Act. Section 29 of the Act prohibits the person-in-charge of a vessel entering India from doing certain things. Section 30 requires the person-in-charge of the vessel carrying imported goods to notify its arrival and to deliver to the proper Officer an Import Manifest within twenty-four hours of its arrival at a customs station. The proviso to that section permits delivery of Import Manifest even before arrival of the vessel. The Import Manifest itself contains an application for granting entry inwards. After the Import Manifest and other documents, including the Lists, are submitted, they are to be scrutinised by the proper Officer and then, as required by Clause 10 of the Central Manual of the Import Department in the Customs House, entry inwards is required to be granted with least possible delay. However, entry inwards is to be granted only when the vessel is ready to discharge cargo. After scrutiny, an endorsement or order is made by the proper Officer. That becomes clear from Clauses 10 and 13 of the Manual. The Rules and Regulations issued under the Act do not throw any further light. “Import Manifest Form” prescribed by the Import Manifest (Vessels) Regulation, 1971 contains a request for permission for entry inwards of the vessel. Normally, the importer of goods is permitted to clear them for home consumption on his presenting a Bill of Entry after the goods are unloaded. Under Section 13 of the Act, the rate of duty and tariff valuation are to be determined according to the rate and valuation in force, in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section, and in the case of any other goods, the relevant date is the date of payment of duty. The section also makes a provision for dealing with a situation where a bill of entry has been presented before the date of entry inwards of the vessels, by which the goods are imported. In such a case, the bill of entry shall be deemed to have been presented on the date of such entry inwards. It is because of this provision that the date of entry inwards assumes importance. In this case, the bill of entry was presented earlier and, therefore, the date of entry inwards is to be deemed to be the date of presentation of the Bill of Entry and it is with reference to that date that liability of the petitioner for payment of customs duty is to be fixed.
10. In this case, the arrival report and necessary declaration were filed on 19th March 1990. The vessel had arrived on 17th March 1990 and berthed at the inner anchorage in the morning of 19th March, 1990. The shipping agent of the vessel had, on that very day informed Assistant Collector of Customs that the vessel was brought at the inner anchorage and requested him to depute an Officer of Customs at 2.00 P.M. on that day to complete the arrival boarding formalities. On receiving that letter, the Assistant Collector directed the Preventive Officer to board the vessel and complete the boarding formalities. From the file shown to us by the learned counsel appearing for the respondents, it appears that the Preventive Officer boarded the vessel at 3.00 P.M. and completed the formalities on that day. He also made an endorsement in the form that the inward entry would be granted by the Assistant Collector of Customs, Kandla. The form also contained a certificate by the Master, to the effect that discharge berth was given to the vessel at the time and on the date mentioned therein. From that form, it further appears that discharge berth was given to the vessel at 7.00 A.M. and the entry inwards was granted at 8.00 A.M. on 20-3-1990.
11. What is contended by the learned counsel for the petitioners is that, all the boarding formalities were completed on 19th and nothing further was required to be done, the Preventive Officer who was the Proper Officer to pass an order regarding entry inwards, should have passed the order on 19th itself and by not doing so, he committed a wrong an unjustifiably subjected the petitioners to the liability of paying customs duty at a higher rate. He invited our attention to the relevant clauses of the Manual and the forms prescribed by it and submitted that the Preventive Officer is competent to grant entry inwards. By not passing such an order on 19th, the Preventive Officer either abdicated his function or was wrongly prevented from exercising his power by the impugned public notice. Therefore, it should be declared that the entry inwards ought to have been granted on 19th and that the liability of the petitioners to pay customs duty is required to be determined according to the rate of duty applicable on 19th.
12. As disclosed by the Manual, ordinarily, the Preventive Officer passes an order, granting entry inwards. But, as submitted by the learned counsel for the respondents, proper Officer in relation to any duty to be performed under the Act means the Officer of Customs, who is assigned those functions by the Board or the Collector of Customs. For the Special period between 16-3-1990 and 24-3-1990, and for the Kandla Port, the Collector had taken away the power of the Preventive Officer to grant entry inwards and entrusted that power to the Assistant Collector of Customs at Kandla. It is, therefore, not possible to accept the contention that the Preventive Officer could have passed an order for entry inwards even during that special period. Such an order could have been passed during that period only by the Assistant Collector of Customs. This part of the public notice has not been challenged and it is not pointed out that exercise of the power by the Collector in that behalf is, for any reason, bad. We, therefore, cannot say that the Preventive Officer, by not granting entry inwards immediately after he completed the boarding formalities, committed any wrong.
13. Realising this difficulty, the learned counsel submitted that, as the boarding formalities were over on 19th, the Assistant Collector himself should have passed the order on that very day. He also submitted that, there is nothing on record to show and it is not even the respondents’ case that, it was not possible for the Assistant Collector to pass such an order on that day. He drew our attention to the provisions relating to special procedure contained in the Manual and Submitted that these provisions are made for protection of bona fide importers and for having a check on manipulations by the importers or by the subordinate officers of Customs. He also drew our attention to Clause 76 of the Manual which makes it clear that granting of entry inwards is required to be done up to midnight of the Budget Day. He then submitted that but for the requirement of a certificate from the Port Trust Authorities, entry inwards could have been granted on 19th, as no other formality was required to be completed either by the Master of the vessel or by the Customs Authorities.
14. This factual position has not been disputed by the respondent. Appreciating the consequences likely to follow in case it is held that, that part of the impugned public notice, whereby the Master of the Vessel was required to produce a certificate from the Port Authorities during that special period, is bad. The learned counsel for the respondents submitted that, no order for granting entry inwards could have been made on 19th, as the vessel was not ready to discharge the cargo, inasmuch as it had not berthed on 19th. According to him, the vessel had arrived at the discharge berth at 7.00 A.M. on 20th. Even though the vessel had arrived at the Customs Station on 17th, and had berthed at the inner anchorage on 19th, it was not ready to discharge the cargo till 20th and, therefore, the Assistant Collector was justified in not granting entry inwards till that time. It was also submitted that the Shipping Agent of the Vessel had, on 13-3-1990, intimated to the Assistant Collector of Customs that the vessel was to arrive at Kandla on 15-3-1990. It was also stated therein that, the vessel was expected to commence unloading of the cargo on 15-3-1990. It was further stated that, they would intimate without any delay any change in the arrival of the vessel, or any alteration in the unloading programme. Even though the vessel did not arrive on 15-3-1990, no change or alteration in the unloading programme was notified to the Assistant Collector and, therefore, also the Assistant Collector was justified in not granting entry inwards on 19-3-1990.
15. While it is true that the vessel had not arrived as expected, it is not true that no intimation regarding arrival of the vessel was given, as an arrival report was filed on 19-3-1990. Not only that but a request was also made to the Customs Authorities to compete the boarding formalities. The Competent Officer, having verified the documents and completed the other boarding formalities, ought to have verified the readiness of the vessel to discharge cargo on that very day. No further intimation was required to be given by the Master of the Vessel in that behalf. Moreover, as pointed out above, it is not the case of the respondents in their reply affidavit that, they did not consider the vessel ready for discharging the cargo, because, no intimation in that behalf was given to the Customs Authorities. Only ground put forward by the respondents in their reply affidavit is that, the vessel had not taken position on the berth, which was allotted to it for discharging the cargo and it was, for that reason, considered not ready to discharge the cargo. Therefore, it is not possible to accept the contention that the respondents were justified in treating the vessel as unready for discharging the cargo and not granting entry inwards on 19th as no fresh intimation in that behalf was given by the Master of the Vessel on that day.
16. Next thing to be considered is whether there is any substance in the contention that the vessel was not ready to discharge the cargo. Though the vessel had not berthed on 19-3-1990, the shipping agent of the vessel had issued a notice of readiness, informing the petitioner’s Clearing Agents that the vessel was ready to discharge the petitioner’s cargo. That is not disputed by the respondents. The fact that the vessel was also allotted berth on 18th is also not is dispute. Therefore, the question, which arises for consideration, is, whether the vessel was ready to discharge the cargo on 19th. The learned counsel for the petitioners drew our attention to Payne and Ivamy’s “Carriage of Goods by Sea”, Thirteen Edition and submitted that, the vessel can be said to be ready to discharge the cargo when she is ready in all her holds to give the charterer complete control of every part of her which his available for cargo. It is submitted that what is to be seen is the readiness of the vessel to discharge the cargo and for that purpose, is not necessary, unless it is specifically so stipulated, that the vessel should also be securely moored at the discharging place. The learned counsel also relied upon the decision in Shipping Developments Corporation. v. V/o Sojuzneftexport The Delian Spirit [(1992) 1 Q.B. 103]. But the question with which we are concerned did not arise for consideration in that case. In that case, what arose for consideration was, when the vessel can be said to be “an arrived ship.”. It was held that : “when the vessel anchored in the appointed anchorage as near as circumstances permitted to the actual loading spot and the notice of readiness had been accepted, she was an arrived ship in the ….. and commercial sense, for she had been effectively placed, ready to load, at the disposal of the character….”. It was submitted that, as soon as the notice of readiness is given and the vessel is found to be ready to unload, it can be said that the vessel was ready for discharging cargo. In our opinion, the contention raised on behalf of the petitioners is right. What is required to be seen is the readiness of the vessel to discharge cargo. The respondents have not produced any materials on the basis of which it can be said that unless the vessel takes berth, it cannot be said to be ready to discharge cargo. The learned counsel for the respondents merely relied upon Clause 13 of the Manual, which reads as under :
“13. Immediately on arrival of the vessel, the agents shall submit the store list signed by the Master to the Preventive Section Officer in whose jurisdiction the ship is berthed for discharging the import cargo brought by her, alongwith the two copies of the aforesaid certificates obtained from the Import Department. The Preventive Officer concerned shall complete the endorsement in the certificate as in Appendix “I” and return one copy of the certificate to the agents, and retain another in the section. The endorsement will permit inward entry of the vessel from the moment the vessel is ready to discharge import cargo.”
It is difficult to appreciate how the said clause can support the contention raised on behalf of the respondents. Therefore, the contention now raised before us that even otherwise also the vessels was not ready to discharge cargo on 19-3-1990 cannot be accepted.
Next thing to be considered is, whether it was within the powers of the Collector to direct that Steamer Agents and other concerned parties should attach a certificate confirming the steamer’s readiness to unload cargo from the authorised person of the Traffic Department of the Kandla Port Trust alongwith the application for granting entry inwards. It was submitted on behalf of the petitioners that neither the Act nor the Rules provide for any such certificate. In absence of such a provision subjecting a Master of the Vessel to obtain a certificate from an authority not concerned with the customs Act was beyond the powers of the Collector and, therefore, the part of the public notice should be regarded as void. Neither in the reply affidavit, nor during the course of hearing, the respondents could point out any provision in the Act, authorising the Collector to impose such a condition. Even the Manual, which contains administrative directions with regard to the procedure to be followed during “special periods”, does not provide for such a requirement. The only provision in the Act which permits giving of directions and instructions is Section 151A. It authorises the Board to issue such orders, instructions and directions to Officers of Customs, as it may deem fit, if that is considered necessary and expedient for the purpose of uniformity in the classification of goods or with respect to the levy of duty thereon. Assuming that the instruction contained in the public notice could have been issued under Section 151A of the Act, that could have been done only by the Board. The Collector could not have exercised that power. Considering the scheme of the Act and the consequences likely to follow in cases like this, it will have to be held that imposition of such a condition was not consistent with the provisions of the Act and the Rules. As pointed out earlier, entry inwards has to be granted with least possible delay, after the boarding formalities are over and the vessel is found to be ready to discharge the cargo. Any condition, which has the effect of delaying granting of entry inwards cannot be regarded as one contemplated by the Act, Rules or even the Manual. It is also difficult to appreciate how the Collector could insist upon confirmation by the Port Trust Authority, which, in a sense, can be regarded as an outside authority. Readiness to discharge cargo is to be judged by the proper officer. What the Collector did by issuing the public notice was to subject the satisfaction of the proper officer regarding readiness of the vessel to discharge cargo by the satisfaction of the Traffic Department of the Kandla Port Trust. We are of the opinion that the Collector had no power to impose such a condition and, therefore, we hold that part of the public notice, whereby the steamer’s agent and other concerned parties were required to obtain a certificate, confirming the steamer’s readiness to unload cargo from the authorised person of the Traffic Department of the Kandla Port Trust, as invalid and without any authority of law.
17. The next thing to be considered is, what would have been the position, if such a requirement was not there on 19th March 1990. As stated earlier, the Master of the vessel had already declared his readiness to unload cargo before 19-3-1990. The Vessel had already berthed at the inner anchorage on 19th and all the boarding formalities were over on that day. But for the requirement of the certificate from the Traffic Department of the Kandla Port Trust, the Proper Officer would have passed an order, granting entry inwards on 19th. In that case, the petitioners’ liability to pay customs duty would have been determined at the rate, which was applicable on 19th. It was only because of this unauthorised requirement of obtaining a certificate of steamer’s readiness to unload from the authorised person of the Traffic Department of the Kandla Port Trust that the entry inwards was not granted to the vessel on 19th. It is no doubt true that, the Master of the Vessel had subjected himself to that condition and had not protested. The petitioners had no control over the same and we see no justification for subjecting the petitioner to a higher rate of duty, merely because the Customs Authorities unjustifiably insisted upon a certificate and the Master of the vessel having no option subjected himself to that condition. In fairness to the petitioners, it will have to be held that the vessel in question was entitled to entry inwards on 19-3-1990 and that the liability of the petitioners to pay customs duty in respect of the goods imported through that vessel shall have to be determined at the rate, which was applicable on 19-3-1990.
18. In the result, this petition is allowed. It is hereby declared that the vessel “Bow Falcon” was wrongly denied entry inwards on 19-3-1990. For that reason, the respondents are directed to proceed on the basis that the said vessel was granted entry inwards on 19-3-1990 and to assess the petitioners’ goods and recover customs duty from the petitioners at the rate, which was in force on 19-3-1990. Rule is made absolute accordingly with no order as to cost.
19. The learned counsel for the respondents submitted that the operation and implementation of this judgment be stayed for a period of ten weeks, as the respondents intend to approach the Supreme Court against this judgment. Having heard the learned Advocates, we think it proper to pass such an order and, therefore, operation and implementation of this judgment is stayed for a period of 10 weeks from today.