The power to correct errors under Section 154 of the Customs Act, 1962 includes the power to correct errors arising from accidental slips or omissions, such as the omission to make a finding against a party in an adjudication order.

Headnote:
CUSTOMS ACT, 1962 - SECTION 154 - CORRECTION OF CLERICAL ERRORS - SCOPE AND PURPOSE - INTERPRETATION - APPLICATION TO ADDENDUM ORDER RECTIFYING OMISSION IN ADJUDICATION ORDER - VALIDITY.
Fact of the Case:

The Customs Authorities seized goods of foreign origin from the respondent's house. Show cause notices were issued to the respondent and others, but the Adjudicating Authority's initial order omitted to make a finding against the respondent or impose a penalty on him. Subsequently, the Adjudicating Authority issued an addendum order rectifying this omission, relying on Section 154 of the Customs Act, 1962. The Tribunal held that the addendum order was not justified under Section 154. The Collector of Customs and Central Excise filed a reference to the High Court for determination of the question of law.
Finding of the Court:

The High Court held that the addendum order was valid and within the scope of Section 154 of the Customs Act, 1962. The Court interpreted Section 154 to allow for the correction of errors arising from accidental slips or omissions, including the omission to make a finding against the respondent in the initial order. The Court found that the Adjudicating Authority had intended to impose a penalty on the respondent but had accidentally omitted to do so, and that the addendum order was therefore a valid exercise of the power to correct errors under Section 154.
Issues: 1. Whether the addendum order passed by the Adjudicating Authority was within the scope of Section 154 of the Customs Act, 1962? 2. Whether the omission to make a finding against the respondent in the initial order was an error arising from an accidental slip or omission?
Ratio Decidendi: 1. Section 154 of the Customs Act, 1962 allows for the correction of clerical or arithmetical mistakes or errors arising from accidental slips or omissions in decisions or orders passed under the Act. 2. The power to correct errors under Section 154 can be exercised at any time. 3. The omission to make a finding against the respondent in the initial order was an error arising from an accidental slip or omission, as the Adjudicating Authority had intended to impose a penalty on the respondent but had accidentally omitted to do so. 4. The addendum order was therefore a valid exercise of the power to correct errors under Section 154.
Final Decision: The High Court answered the question of law in the affirmative, holding that the addendum order was valid and within the scope of Section 154 of the Customs Act, 1962.

Judgment :-

RAJU, J.

This is reference made to this Court by the Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench at Madras, at the instance and on an application from the Collector of Central Excise and Customs, Madurai, under Section 130(1) of the Customs Act, 1962 (hereinafter referred to as the Act) for the determination of the following question of law :-

"Whether in the facts and circumstances of the case, the" addendum order' dated 23-9-1983 passed by the Adjudicating Authority can be considered to be one within the scope of Section 154 of the Customs Act, 1962'.

2.The relevant facts necessary to appreciate the question of law referred to the determination of this Court are that on 12-6-1981 the Customs Authorities have apprehended some of the persons found involved in smuggling activities and as a sequel thereof, search of the house of the respondent herein was also made resulting in the seizure of goods of foreign origin valued in all Rs. 1, 31, 587.50 in the shape of following items of goods :-

1. SANYO Radio Cassette Tape Recorders M 6400 H (made in Japan) ... 36 Nos.

2. MECCA Car Stereo Cassette Tape Players ... 20 Nos.

3. OCEAN Stereo Car Cassette Tape Players ... 54 Nos.

4. Car Cassette Speakers ... 45 pairs

5. Textiles (Pant Pieces) ... 16.75 Metres

The respondent could not produce any Customs paid receipts, import licence or any bill or voucher to prove his lawful possession of the goods of the foreign origin and therefore the seizure was effected under a mahazar on the reasonable belief that the goods were imported illicitly into India from foreign country without payment of duty and without the requisite I.T.C. Licence. Statements were also said to have been recorded and thereafter adjudication proceedings were initiated by the Additional Collector of Central Excise and Customs, Madurai.

3.The Adjudicating Authority appears to have as found noticed in the order of adjudication, issued show cause notices dated 13-11-1981 to eight persons including the respondent herein calling upon them to show cause within 30 days from the date of receipt of the notice as to why the goods seized should not be confiscated to the Government under Sections 111(d) and 111(p) of the Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 and why penalty should not be imposed on them under Section 112 of the Act. It also transpires that the show cause notices issued were received by one Innasimuthu, Michael Raj, Francis and A. Pushparaj, on 21-11-1981 and one Mani on 23-11-1981. Since the show cause notices intended for the respondent herein by name Samudram, Dalsingh and Gurunathan were returned undelivered by the postal authorities, they were got served under Section 153 (b) of the Act by pasting them on the doors of their residences under mahazar on 2-12-1981. It may also be noticed at this stage that on 13-6-1981, the respondent herein also gave a statement before the Superintendent of Central Excise, Customs Preventive Party, Tuticorin, about the whole affairs pertaining to the possession of goods in his house and the circumstances under which they were found in his house. After according a personal hearing to one Innasimuthu, who sought for the same, the Additional Collector passed orders dated 30-10-1982, the operative portion of which is contained in paragraph 18 and it runs as follows :-

"The said seized goods as described in the mahazar are hereby absolutely confiscated to the Central Government under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Imports and Exports (Control) Act, 1947.

I hereby levy the penalties on the persons as shown below under Section 112 of the Customs Act.

(1) Dalsingh ... Rs. 50, 000/-

(2) Innasimuthu ... Rs. 5, 000/-

(3) Gurunathan ... Rs. 200/-

(4) Pushparaj ... Rs. 200/-

(5) Maichael Raj ... Rs. 200/-

(6) Francis ... Rs. 200/-

(7) Mani ... Rs. 200/-'

4.Subsequently, the Adjudicating Authority by his order dated 23-9-1983 has passed a

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Judicial Analysis

1997 Supreme(Mad) 106

High Court of Judicature at MadrasTHE HONOURABLE MR. JUSTICE RAJU AND THE HONOURABLE MR. JUSTICE S.M. ABDUL WAHABCollector of Customs and Central Excise, Madurai - AppellantVersusSamudram - RespondentsR.C. No. 1 of 1985Decided On : 28 January 1997

The power to correct errors under Section 154 of the Customs Act, 1962 includes the power to correct errors arising from accidental slips or omissions, such as the omission to make a finding against a party in an adjudication order.

Judicial Analysis

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE RAJU AND THE HONOURABLE MR. JUSTICE S.M. ABDUL WAHAB
Collector of Customs and Central Excise, Madurai - Appellant
Versus
Samudram - Respondents
R.C. No. 1 of 1985
Decided On : 28 January 1997