2002 (5) TMI 447 - AT - Customs

Summary

Issues:
1. Interpretation of the term "industrial stapling machine" under the Customs Act, 1962.
2. Compliance with the relevant policy on import of stapling machines.
3. Application of the REP license and its exceptions.
4. Determination of the main criteria for considering a stapling machine as industrial.

Issue 1 - Interpretation of the term "industrial stapling machine":
The Tribunal referred questions to the High Court regarding the classification of a stapling machine as industrial. The High Court analyzed the term "industrial" in the context of its usage and concluded that an industrial stapling machine is one used by manufacturers in garment production. The court emphasized that the machine's usage in the industry is crucial for classification.

Issue 2 - Compliance with relevant policy on import of stapling machines:
The High Court examined the prohibition on importing stapling machines under Appendix I and the exception for industrial stapling machines under the REP license. It clarified that the term "industrial" implies usage in the industry or capability for industrial use. The court highlighted that the import must align with the purpose of the REP license and the manufacturing process.

Issue 3 - Application of the REP license and its exceptions:
The court scrutinized the provisions of the REP license and the Customs Tariff Act to determine the eligibility of a stapling machine for import. It emphasized that the use of the machine in manufacturing garments and packaging was a significant factor in considering it as an industrial stapling machine under the policy.

Issue 4 - Determination of main criteria for considering a stapling machine as industrial:
The High Court deliberated on the main criteria for categorizing a stapling machine as industrial. It highlighted the importance of the machine's usage in garment manufacturing, specifically in packaging garments for export. The court emphasized that the manufacturer's need for the machine in the production process was a key factor in classifying it as industrial.

In conclusion, the High Court ruled in favor of the importer, stating that the decision of the Tribunal regarding the stapling machine being industrial was justified. The court upheld the manufacturer's right to import the stapling machine for garment production, emphasizing the machine's integral role in the manufacturing process. The Revenue was directed to pay costs to the importer as per the court's decision.