1987 (6) TMI 219 - AT - Customs

Tribunal clarifies letter of credit commitment date, rejects High Court reference

The Tribunal concluded that the Third Member overstepped his jurisdiction by addressing issues where there was no initial disagreement between the two ... Rectification of mistake Issues Involved:1. Jurisdiction of the Third Member under Section 129C(5) of the Customs Act.2. Determination of the firm commitment date for the letter of credit.3. Interpretation of ITC Public Notice No. 66/77.4. Validity of evidence regarding the date of opening of the letter of credit.Issue-wise Detailed Analysis:1. Jurisdiction of the Third Member under Section 129C(5) of the Customs Act:The Collector of Customs questioned whether the Third Member had the authority to interfere in matters where there was no difference of opinion between the two Members of the Tribunal. The Tribunal clarified that the Third Member's role is limited to resolving points of difference as per Section 129C(5). The Tribunal concluded that the Third Member had overstepped his jurisdiction by addressing issues where there was no initial disagreement between the two Members. This was considered a matter for rectification rather than a reference to the High Court.2. Determination of the Firm Commitment Date for the Letter of Credit:The core issue was whether the firm commitment for the letter of credit (L/C) was established on 1-9-1977, when the application for opening the L/C was submitted, or on 5-9-1977, when the L/C was actually issued. The Tribunal noted that the original Members agreed that the L/C document came into existence on 5-9-1977. However, the Third Member concluded that the firm commitment was made on 1-9-1977, based on the application date, which contradicted the original Members' findings. The Tribunal emphasized that the Supreme Court's judgment in United Commercial Bank, A.I.R. 1981 S.C. 1426, established that a firm commitment is made when the L/C is issued, not when the application is submitted.3. Interpretation of ITC Public Notice No. 66/77:The Collector questioned whether the Tribunal was correct in holding that the firm commitment came into existence on 1-9-1977 under ITC Public Notice No. 66/77. The Tribunal found that the Third Member's interpretation was incorrect and that the firm commitment should be considered as established only when the L/C was issued on 5-9-1977. The Tribunal highlighted that the Supreme Court's judgment had already clarified this point, making further reference to the High Court unnecessary.4. Validity of Evidence Regarding the Date of Opening of the Letter of Credit:The Collector argued that the Tribunal ignored evidence indicating that the L/C was opened on 5-9-1977, not 1-9-1977. The Tribunal reaffirmed that the original Members had unanimously agreed on the L/C's issuance date as 5-9-1977. The Tribunal concluded that the Third Member had no jurisdiction to overturn this agreed finding. The Tribunal also noted that the Collector's application for referring this question to the High Court was based on a misunderstanding of the facts and legal principles involved.Conclusion:The Tribunal rejected the Collector's application for referring the questions to the High Court. It held that the issues raised had already been resolved by the Supreme Court's judgment, and any further clarification from the High Court was unnecessary. The Tribunal emphasized that the Third Member had exceeded his jurisdiction by addressing issues where there was no initial disagreement, and any correction needed should be through rectification of the Tribunal's order, not a High Court reference.