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Issues Involved:
1. Classification of imported goods as 'Seeds' or consumer items. 2. Maintainability of the appeals filed by the Collector of Customs (Appeals) under Section 129D(2) of the Customs Act. Issue-wise Detailed Analysis: 1. Classification of Imported Goods as 'Seeds' or Consumer Items: The petitioners imported inshell almond seeds and sought clearance under an R.E.P. Licence, claiming the goods as 'Seeds' under Appendix 17 of the Import Trade Control Policy. The Customs Department, however, classified the almonds as dry fruits under Serial No. 121 of Appendix 2B. The Deputy Collector of Customs ordered the confiscation of the consignment, levying a redemption fine, and the Collector of Customs (Appeals) increased the fine and imposed a penalty. The Court examined whether the goods fell under the category of 'Seeds' or consumer items. Appendix 17 allowed the import of "Seeds/Bulbs/mother plant germ plasm" without excluding dry fruits. The subsequent policy explicitly excluded dry fruits from the definition of seeds, indicating that dry fruits were initially included. The Horticulturist, consulted by the Customs Department, certified that the goods were seeds fit for germination. The Court held that the Department was estopped from claiming otherwise, as they had sought and received expert opinion confirming the goods as seeds. The Tribunal's reasoning that the large quantity of imports and the lack of commercial almond cultivation in India negated the classification as seeds was found baseless. The Court emphasized that the quantity imported and the extent of commercial cultivation were irrelevant to the classification. The Tribunal's reliance on a previous case (M.M. Exports v. Collector of Customs) was also misplaced, as it was based on admissions not applicable to the present case. The Court upheld the principle that in cases of ambiguity in fiscal law, the interpretation favoring the taxpayer should prevail, citing precedents like Tamil Nadu Papers Ltd. v. Appraiser, Madras Customs. 2. Maintainability of Appeals Filed by the Collector of Customs (Appeals): The petitioners challenged the maintainability of the appeals filed by the Collector of Customs (Appeals) on several grounds. Firstly, the appeal was filed on 18-11-1987, while the Deputy Collector's order was dispatched only on 11-12-1987. According to Section 153 of the Customs Act, an order takes effect only upon communication. Thus, there was no effective order when the appeal was filed. The Court referenced the Supreme Court's decision in Bachhittar Singh v. State of Punjab, which held that an order must be communicated to be effective. The appeal filed before communication was therefore premature and invalid. Additionally, the appeals did not comply with Rule 4 of the Customs (Appeals) Rules, 1982, which requires the appeal to be filed in duplicate with a certified copy of the decision. The absence of the Deputy Collector's order with the appeal further invalidated it. The Court cited Ramachandra v. Govind, emphasizing that statutory procedures must be strictly followed. The Collector's order under Section 129D(2) did not specify any illegality or impropriety in the Deputy Collector's decision, merely stating that the order needed revision for public interest and revenue reasons. This did not meet the statutory requirement for a valid appeal under Section 129D(2). The Court also noted that the Assistant Collector had no jurisdiction to file an appeal and incorporate points not mentioned by the Collector. The grounds of appeal were prepared before the Collector's order, indicating a lack of proper application of mind. The Tribunal's reliance on internal files to justify the Collector's order was improper. The Court held that an order must stand on its own merits and cannot be supplemented by external documents. Conclusion: The Court allowed the writ petitions, quashing the order of the Customs, Excise and Gold (Control) Appellate Tribunal dated 2-12-1988. The Collector of Customs, Madras, was directed to refund the redemption fine and personal penalty already paid by the petitioners. No order as to costs was made.
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