Commissioner of Customs v. Sayed ali


There are three main organs of the government in a state – the legislature, the executive and the judiciary. According to the doctrine of separation of power, these three powers and functions of the government in a free democracy, always be kept separate and be exercised by three separate organs of the government. Thus the legislature cannot exercise executive and judicial power, the executive cannot exercise legislative or judicial power, and the judiciary cannot exercise legislative or executive power of the government. The administrative action is the meeting point of the three types of government functions. In the administrative process, all these three functions are vested into singe authority. So, in this case we are going to discuss about the separation of powers between the commissioner of customs and the assistant commissioner of custom in which their power of jurisdiction is decided.



In this case, Sayed Ali and his partner were engaged in a business of manufacturing or export of handloom carpet in a handloom carpet firm situated at Varanasi. They were charged with the misusing of export pass book scheme by selling duty free goods in the open market or selling the passbook on premium which is in contravention of the ITC restriction imposed on the sale of given duty free goods. Investigations and inquiry were operated by the marine and preventive wing of the customs. On august 28, 1991, the assistant collector of customs (preventive), issued to the defendant a show cause notice (show cause notice means a court order that needs a party to a dispute to appear before the court and explain why a certain course of action not required to be taken) charging violation of the provisions of Section 111(d) of customs Act, 1962. On February 3, 1993 the same assistant officer arbitrated upon the given show cause notice, ensuring the demand raised in the show cause notice. Being disturbed, the defendant prefer an appeal before the collector of customs (appeals) who allowed the appeal and holds that “since the matter involved demand of duty beyond a period of six months, the show cause notice was required to be issued by the collector and not by the assistant collector”. But in spite of this, the collector acknowledged the liberty to his department to re-arbitrate the case by issuing another the proper show cause notice. Subsequently he (preventive collector of customs) admitted proper show cause notice by enquiring as to why the seized goods valued at 1.04 lakh should not be annexed and custom duty upto 5.07 lakh be not be extort according to Section 28(1) of the customs act, 1962, by invoking extended limitation period and penalties under Section 112(a) & (b) (1) and (2) of the customs act were also suggested.


As a reaction to the show cause notice, the area of jurisdiction was questionable of the collector of customs (preventive) on the ground of that jurisdiction of commissioners is more limited and specific in nature. The preventive collector of customs contradicts these objection made by defendant party regarding the jurisdiction and hold thus- “the commissioner of customs (preventive) Mumbai is appointed as a commissioner of customs in the areas covering district of Mumbai, thane and kolaba and the jurisdiction is also vested in the Mumbai port as well”. Along with the reply of question of jurisdiction the officer also refer to the definition or meaning of smuggling under the regulation of customs act, 1962. Under this act, smuggling is refer to as “any act or omission which renders the goods to confiscation under the provisions of the act. The manufacturers of handloom carpets were also charged with the trafficking of the imported goods and duty free goods and fake documents to show consumption & receipt of the goods in their company as well which are in violation of the laws. He also stated that his appointment on this position is for the purpose of prevention of smuggling and to detect cases related to commercial frauds. Thus he is eligible to settle and inquire the case. After confirming the demand of duty of rupee’s 5.07 lakh under section 28(1) of the act. And also demanded seize of two products of dyes- Sulphur blue and Sulphur blue green and a fine of 1.5 lakh. In reply, the respondent in last appealed before the CEGAT (Customs, Excise, & Gold (control) Appellate tribunal).



In the judgement, the CEGAT accepts the objection raised by the defendant in regard to jurisdiction of the commissioner. The tribunal stated that the commissioner of customs does not have the jurisdiction to issue the impugned show cause notice and does not have the power to settle the dispute when imports have taken place at Bombay custom house.

In the case of Konia trading co. v. commissioner of customs, the CESTAT (Customs, excise, & service tax Appellate Tribunal) upholds the issue of show cause notice by the collector of customs (preventive) under section 28 of the customs act, set alone the order of adjudication which was passed by the said officer and gives a direction that the case will be determined by the jurisdictional officer or collector of customs. The defendant states that the notice could only be issued by a “proper officer of customs” and not by any other custom officer. The proper officer is defined in section 2(34) of the customs act which means “the officer of customs who is assigned those functions by the board or the collector of customs”.

The defendant also relies on the judgement of Manohar Bros (Capacitors) v. CC in which the tribunal held that “collector of central excise, Bombay does not have jurisdiction to issue show cause notice demanding duty under the customs act even though he was designated as an officer of customs. The said decision referred to the provision of section 4 of the customs act.


Analysis of the case

The given case which we have discussed above is the very good example of separation of roles, powers, jurisdiction between two or more persons in a specific area. The uncertainty between the peoples to decide whom has the power to adjudicate and who has not should not arise. Same happened between the commissioner of customs and Sayed Ali where the collector of customs in acting as an officer to impose charges on the wrong practices of trade by the defendant but there was a dispute regarding the jurisdictional area. This is what the doctrine of separation of power has explained us. This doctrine of is not strictly accepted by number of peoples all over the world due to its rigidity. The doctrine of separation of power is accepted in the Indian Constitution and is the part of the basic structure of the constitution but in my opinion the concept of separation of power but is not at its strict level. Sometimes the power overlaps and sometimes the different powers confers in only one hand. Like Montesquieu in his book stated “if the two types of different powers are united in the same body of magistrate, there can be no liberty because apprehension may arise. Again there will be no liberty if the judicial power be not separated from the legislature and executive power. Many of the countries think that the concept of separation of power is impracticable and undesirable but the consequences can be seen many parts of the world and strictly in India as well. The most important one is the system of checks and balances which means there should be limitation being placed upon government etc. So that basic liberty and freedom can be enjoyed by an individual.



Lastly it has been concluded that there has been no serious separation of powers as we have seen in the discussed case above and it might be exposed to arbitrary control and violence & oppression against anyone.

Author: Raman Saxena,
Delhi metropolitan education affiliated to GGSIPU (2nd year/law student)

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