TaxTMI 
TaxTMI 
1978 (4) TMI 97
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....hed, as many as 23 wrist watches on which no customs duty was paid were recovered from his person. Thereafter, adjudication proceedings under section 122 of the Act were commenced by the Assistant Collector of Customs which culminated in the order of the Assistant Collector dated 30th June, 1969, by which the watches were seized and ordered to be confiscated. A penalty of Rs. 250 was levied on the respondent under section 112 of the Act. The respondent then carried an appeal to the Appellate Collector under section 128 of the Act against the order of the Assistant Collector. The Appellate Collector by his order dated 22nd February, 1972, vacated the order of the Assistant Collector mainly on the ground that the Assistant Collector had not complied with the rules of natural justice. The fate of this case depends on the interpretation of the order passed by the Appellate Collector. In order to appreciate the point in issue it may be necessary to extract the relevant portion of the order of the Appellate Collector which runs thus : " The adjudication, therefore, suffers for lack of principle of natural justice, inasmuch as adequate opportunities were not given to the appellant t....
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....tor in his order dated 30th June, 1969, had directed confiscation of the watches and imposed a penalty of Rs. 250 and if the Appellate Collector intended to set aside this order completely and irrevocably then he should have passed a consequential order for refund of the amount of the penalty and release of the property confiscated. the fact that no such order was passed by the Appellate Collector clearly shows that he never intended to bar fresh adjudicatory proceedings provided they were conducted according to the principles of natural justice. It seems to us that whenever an order is struck down as invalid being in violation of the principles of natural justice there is no final decision of the cause and fresh proceedings are left open. All that is done is that the order assailed by virtue of its inherent defect is vacated but the proceedings are not terminated. In the case of Thimmasamudram Tobacco Co. v. Assistant Collector of Central Excise, Nellore Dn., AIR 1961 AP 324, 325, while construing the provisions of the Central Excises and Salt Act which was almost on identical terms as the Customs Act, a Division Bench of the Andhra Pradesh High Court observed as follows : "....
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.... that nothing written or said ' without prejudice ' can be considered at the trial without the consent of both parties--not even by a judge in determining whether or not there is good cause for depriving a successful litigant of costs ...... The word is also frequently used without the foregoing implications in statutes and inter partes to exclude or save transactions, acts and rights from the consequences of a stated proposition and so as to mean ' not affecting ', ' saving 'or' excepting'." In short, therefore, the implication of the term " without prejudice " means, (1) that the cause or the matter has not been decided on merits, (2) that fresh proceedings according to law were not barred. It is true that the Appellate Collector does not say in so many words that the case is remanded to the Assistant Collector but the tenor and the spirit of the order clearly shows that what he intended was that fresh proceedings should be started against the respondent after complying with the rules of natural justice. Thus, in our view, a true interpretation of the order of the Appellate Collector would be that the order of the Assistant Collector was a nullity having violated the rules of ....
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.... & Co. Ltd., ILR [1965] Guj 240, is also clearly distinguishable. In that case the impugned order was extracted thus : " Having regard to all the facts of the case and taking into account the contentions put forth by the appellants, I hereby order that the decision of the Superintendent, Central Excise (Tax), Ahmedabad, shall be set aside. 2. The amounts of excise duty and penalty recovered from the appellants in pursuance thereof shall be refunded to them." Construing this order the High Court observed as follows : " If the appellate order merely annulled the original order without containing any other directions there was no power in the original Tribunal to initiate de novo proceedings and impose a fresh penalty." It appears that the Gujarat High Court practically adopted the reasonings of the Madras High Court in the case mentioned above, but the order impugned in the Gujarat case was clear and explicit and was final and irrevocable. The order clearly shows that it was passed on the merits of the case after taking into account the contentions put forth by the appellant. Secondly, the consequential order, viz., that the amount of excise duty and penalty recovered ....