1989 (7) TMI 308 - AT - Customs

Issues Involved:
1. Entitlement to the benefit of 'OGL' Appendix 6 List 8 Part I of ITC Policy 1985-88 AM.
2. Entitlement to the benefit of concessional rate of duty under Notification No. 386/86 dated 29-7-1986.
3. Liability of goods to confiscation under Section 111(d) and 111(m) of the Customs Act, 1962.
4. Liability of importers to penal action under Section 112(a) of the Customs Act, 1962.

Detailed Analysis:

1. Entitlement to the Benefit of 'OGL' Appendix 6 List 8 Part I of ITC Policy 1985-88 AM:
The Collector held that the appellant did not satisfy the conditions for importing items under OGL (Appendix 6 List 8 Part I), thus invalidating the import under Para 24 of the Import Policy 1985-88. However, the appellant produced a certificate of registration as an industrial unit, issued by the Deputy Director of Industries, Delhi, which confirmed their status as a small-scale industry for manufacturing A.R. grade of tartaric acid and polishing salt. The Tribunal found that the appellant was indeed a manufacturer and an actual user, thus entitled to import the goods under OGL provisions without an import license.

2. Entitlement to the Benefit of Concessional Rate of Duty under Notification No. 386/86:
The Collector denied the benefit of concessional duty, questioning the validity of the certificate issued by the Industrial Adviser. The Tribunal emphasized that the only condition for the concessional rate was obtaining a certificate from the Industrial Adviser, which the appellant had duly obtained and submitted. The Tribunal cited precedents, including Union of India v. Tara Chand Gupta and Bros., asserting that the Customs authorities must accept the certificate and cannot question its validity. Thus, the appellant was entitled to the concessional rate of duty.

3. Liability of Goods to Confiscation under Section 111(d) and 111(m) of the Customs Act, 1962:
The Collector's order for confiscation was based on the assumption that the appellant might not use the imported tartaric acid as declared. The Tribunal found this presumption unfounded, noting that the appellant had complied with all conditions and was engaged in manufacturing. The Tribunal clarified that if the appellant failed to fulfill the conditions later, appropriate action could be taken, but for the present, confiscation was unwarranted.

4. Liability of Importers to Penal Action under Section 112(a) of the Customs Act, 1962:
Given the findings on the first two points, the Tribunal concluded that penal action against the appellant was not justified. The Tribunal highlighted that the Customs authorities have adequate powers under Sections 111(o) and 112 to deal with any future violations of the conditions of exemption.

Final Order:
The appeal was allowed, the impugned order passed by the Collector (Customs), New Delhi was set aside, and all consequential relief was granted to the appellant.

Additional Remarks:
The Senior Vice President concurred with the decision but added that the Collector erred in concluding that the imported tartaric acid was of AR grade based solely on its purity. The Vice President emphasized the need for a comprehensive analysis of all parameters specified for AR grade, which was not conducted. The Customs authorities were reminded of their powers under Sections 111(o) and 112 to address any future non-compliance.

Conclusion:
The Tribunal allowed the appeal, setting aside the Collector's order and granting the appellant all consequential relief, emphasizing the necessity for Customs authorities to adhere to the conditions specified in exemption notifications and certificates issued by competent authorities.

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