2002 (4) TMI 861 - AT - Customs

Summary

Issues:
1. Import of naphtha without a license.
2. Interpretation of import policy regarding naphtha.
3. Validity of letters from authorities regarding import requirements.
4. Commissioner's understanding of the Commerce Secretary's letter.
5. Fulfillment of conditions for import of naphtha.
6. Authority to enforce conditions for import.

Issue 1: Import of naphtha without a license
The appellant imported consignments of naphtha in 1999 under an open general license. The department issued a notice proposing the import as unauthorized due to the lack of an import license. The Commissioner ordered confiscation of the goods, imposing a penalty, leading to the appeal.

Issue 2: Interpretation of import policy regarding naphtha
The Commissioner based the decision on the import policy placing naphtha in the negative list, necessitating a license. The policy allowed import without a license under specific conditions, including selling the return stream to crude oil refineries or for power sector use by actual users.

Issue 3: Validity of letters from authorities regarding import requirements
The appellant corresponded with authorities seeking clarification on importing naphtha for general trade. Letters from the Commerce Secretary and Export Commissioner indicated that the import did not require a license, aligning with the prevailing policy.

Issue 4: Commissioner's understanding of the Commerce Secretary's letter
The Commissioner misinterpreted the Commerce Secretary's letter, incorrectly stating that import of naphtha was restricted to actual users only. However, the letter clarified that import was permissible without a license, subject to specific conditions.

Issue 5: Fulfillment of conditions for import of naphtha
The department contended that the condition of selling the return stream to crude oil refineries was not met. The Tribunal noted that such conditions could only be fulfilled after import permission and enforced by the licensing authority.

Issue 6: Authority to enforce conditions for import
The Tribunal emphasized that the appellant, entitled to import naphtha without a license, was in correspondence with the Ministry and Directorate General of Foreign Trade. The Export Commissioner's clarification supported the appellant's position, and the Tribunal allowed the appeal, setting aside the impugned order.

In conclusion, the Tribunal ruled in favor of the appellant, highlighting the misinterpretation of the import policy and the erroneous understanding of the Commerce Secretary's letter by the Commissioner. The decision emphasized the entitlement of the appellant to import naphtha without a license, based on the prevailing policy and clarifications from relevant authorities.