1984 (8) TMI 335 - AT - Customs

Summary

Issues Involved:
1. Whether the licence issued to the appellants covered the imports in question and if so, is the Customs not entitled to object to the import?
2. Whether the goods imported are canalised items and the import of which is impermissible under OGL under item No. 1 of Appendix 10 of the Policy?

Issue-wise Detailed Analysis:

Issue 1: Whether the licence issued to the appellants covered the imports in question and if so, is the Customs not entitled to object to the import?

The appellants sought clearance against two REP licences acquired by them as Registered Exporters. The licences permitted import of OGL items as per Appendix 10, List 8, item 52, which relates to "Drugs/Drug Intermediates covered under OGL." However, the Customs objected on the grounds that the imported goods are canalised items under Appendix 9. The Tribunal noted that the import of raw materials, components, and consumables under OGL is subject to the conditions specified in Appendix 10. Actual Users (Industrial) could import these items, provided they are not included in Appendices 3, 4, 5, 8, 9, and 15. The Tribunal rejected the appellants' contention that their licences permitted the import of canalised items, emphasizing that the appellants were aware of the limitations and restrictions placed on them.

Issue 2: Whether the goods imported are canalised items and the import of which is impermissible under OGL under item No. 1 of Appendix 10 of the Policy?

The Tribunal considered whether the goods imported by the appellants are canalised items. The Customs argued that the imported goods contained Piperazine, an active ingredient, and thus should be treated as canalised items. The appellants contended that the imported goods were Diethylene Diamine Technical, a chemical or drug intermediate, and not Piperazine Anhydrous or Hexahydrate. The Tribunal examined various analytical reports and found that the imported goods contained significant percentages of Piperazine. The Chief Chemist's report indicated that the samples were free from impurities and could be used in the preparation of medicines. The Tribunal concluded that the imported goods were not a chemical, drug intermediate, or chemical compound but were Piperazine Anhydrous, a canalised item. Consequently, the Tribunal upheld the confiscation ordered by the Additional Collector but reduced the fine from Rs. 2,00,000 to Rs. 75,000 for each consignment, considering the past clearance of similar goods by Customs.

Conclusion:

The Tribunal concluded that the REP licences did not permit the import of canalised items and that the imported goods were indeed canalised items, specifically Piperazine Anhydrous. The confiscation was upheld, but the fine was reduced due to the past clearance of similar goods by Customs. The appeals were rejected subject to the modification in the amount of fine.