2005 (5) TMI 453 - AT - Customs

Summary

Issues:
1. Validity of import licence for HCFC.
2. Confiscation of imported goods under Section 111(d) of the Customs Act, 1962.
3. Interpretation of brand names Solkane and Forane.
4. Revalidation of import licence by the Licensing authority.
5. Compliance with the Montreal Protocol on Substances that Deplete the Ozone Layer.
6. Applicability of EXIM Policy transitional provisions and General Clauses Act, 1897.

Analysis:

The judgment by the Appellate Tribunal CESTAT, Mumbai involves appeals against an order by the Commissioner of Customs (Imports) confiscating imported goods under Section 111(d) of the Customs Act, 1962, due to alleged invalidity of the import licence for Hydro Chloro Fluro Carbon (HCFC) used in refrigerator manufacturing. The appellants, engaged in refrigerator production, imported HCFC under the brand names Forane and Solkane. The licence initially described HCFC as Forance but was later amended to Forane, a brand of HCFC manufactured by Pacific Chemical Industries Pty. Ltd.

The Tribunal noted that technical data sheets confirmed Forane 141b and Solkane 141b are identical HCFC products. Despite the licence expiry, the Directorate General of Foreign Trade (DGFT) extended its validity until 24-2-2002. The appellants imported HCFC consignments before this date, with one shipment under Solkane brand. The Commissioner's order proposed confiscation due to the brand name discrepancy, but the Tribunal found both brand names refer to the same HCFC composition, thus rejecting the confiscation.

Furthermore, the Tribunal referenced the Customs Appraising Manual provision stating revalidated licences remain valid from the original expiry date, covering imports made during the intervening period. As the imports complied with the Montreal Protocol, the Tribunal concluded the confiscation order was unfounded. The Tribunal also critiqued the Commissioner's disregard for transitional provisions under the EXIM Policy and the General Clauses Act, emphasizing the necessity to honor the revalidated licence and overturn the confiscation decision, along with associated penalties.

In conclusion, the Tribunal allowed the appeal, setting aside the confiscation and penalties, emphasizing the importance of upholding a valid revalidated licence and ensuring compliance with relevant international agreements and legal provisions.

Judgment:
The Appellate Tribunal CESTAT, Mumbai, comprising S/Shri S.S. Sekhon and T. Anjaneyulu, allowed the appeal, setting aside the confiscation and penalties imposed on the appellants for importing HCFC under the brand names Forane and Solkane. The Tribunal emphasized the validity of the revalidated import licence, the equivalence of the brand names, and compliance with international protocols and legal provisions, ultimately rejecting the confiscation under Section 111(d) of the Customs Act, 1962.