1992 (7) TMI 235 - AT - Customs

Summary

Issues Involved:
1. Whether the goods imported by the appellants are covered by the licence produced.
2. Whether the confiscation of the goods in question is in accordance with law in view of the fact that there were past clearances of similar goods by the Customs Department.

Detailed Analysis:

1. Coverage of Imported Goods by the Licence:

The primary issue to be determined was whether the goods imported by the appellants, specifically Dial Indicators, were covered under the licence that described the goods as "Special Production Aids for Electronics Industry."

Upon examination, it was found that the imported goods, as per the catalogue furnished by the exporters, were precision measuring instruments used for linear measurement or comparison of linear measurements, rather than aligning tools specialized for use in the electronic industry. The expert opinion from Dr. (Mrs.) Jayasri Chaudhri, Joint Director of Electronics Commissions, NIC, Eastern Regional Cell, indicated that alignment tools for electronic industry are required for adjusting tuned circuits or synchronization of components, which was not a function of the Dial Indicators in question. Consequently, it was concluded that the imported goods were not covered by the licence produced by the appellants. Therefore, point (a) was answered in the negative.

2. Legality of Confiscation in Light of Past Clearances:

The second issue was whether the confiscation of the goods was lawful, considering that similar goods had been cleared by the Customs Department in the past. The appellants argued that there existed a past practice of clearing such goods, which led them to believe that their imports were legitimate. This was supported by the fact that the Customs Authorities had previously allowed the clearance of similar aligning tools, as admitted by the Adjudicating Officer.

The appellants relied on the precedent set by the Hon'ble High Court of Calcutta in the case of Collector of Customs, Calcutta and Others v. Uday Engineering Enterprises and Others. In that case, the court held that if similar goods were released earlier due to errors by the appraisers, the importers could not be penalized for subsequent imports until the error was identified and notified. The court emphasized that the earlier releases might have misled the importers and that no penalty should be imposed without a public notice indicating that such imports would not be allowed in the future.

In the present case, no such public notice was issued by the Customs Authorities. Therefore, the appellants had a bona fide belief that their imports were covered by the licence, based on past clearances. The Tribunal concluded that the confiscation of the goods was not in accordance with law, given the absence of any notification correcting the past practice.

Conclusion:

The Tribunal held that although the goods were not covered by the licence, the confiscation was not justified due to the past practice of allowing similar imports and the lack of a public notice informing importers of any change. Consequently, the appeal was allowed, the confiscation was set aside, and the appellants were entitled to consequential reliefs.