1983 (2) TMI 299 - AT - Customs

Summary

Issues:
1. Interpretation of import policy under Appendix 10, Sr. No. 1 regarding the import of Polyester Filament Yarn without a license.
2. Determination of actual user of the imported yarn for manufacturing zip fasteners.
3. Application of definitions of 'manufacture' and 'actual user' in the context of import policy.
4. Consideration of job work basis for processing raw materials.
5. Compliance with OGL regulations for import of immediate raw materials.

Analysis:

The appeal before the Appellate Tribunal CEGAT BOMBAY involved a dispute regarding the penalization of the import of Polyester Filament Yarn by M/s. Kashyap Zip Industries Pvt. Ltd. The Addl. Collector of Customs, Bombay had denied the benefit of import without a license under Appendix 10, Sr. No. 1 to the appellants on the grounds that the yarn was used in the manufacture of final products like tapes and sewing threads, not as a raw material for zip fasteners. The appellants argued that they sent the yarn for processing on job work basis, which was in line with the definition of actual user as per the Policy Book A.M. 1982.

The learned Advocate representing the appellants contended that the interpretation of import policy should not rely on definitions from statutes like the Central Excises and Salt Act, 1944, but should be understood in the ordinary sense. The conversion of yarn into tapes and threads was considered an intermediate process permitted under the policy book, even if done outside the actual user's premises. The departmental representative opposed this, stating that only immediate raw materials could be imported under the OGL, and as the yarn was not an immediate raw material for zip fasteners, the denial of OGL benefits was justified.

Upon consideration, the Tribunal found merit in the departmental representative's argument that the actual user of the yarn was not the importer, as the tape was the component for zip fasteners, not the yarn itself. The definitions of 'actual user' and the requirements under Appendix 10 indicated that the import of yarn was not permissible under the OGL for the appellants. Therefore, the Tribunal upheld the Addl. Collector's order, confirming its legality and correctness, and subsequently rejected the appeal.