1987 (7) TMI 254 - AT - Customs

Summary

Issues:
1. Denial of concessional rate of customs duty under exemption notification No. 232/83-Customs.
2. Imposition of fine and penalty for violation of import trade control restrictions.

Analysis:

Issue 1: Denial of concessional rate of customs duty under exemption notification No. 232/83-Customs.
The appellants had imported goods for manufacturing electronic products after obtaining an SSI Registration Certificate. The lower authorities denied the concessional rate of customs duty and Open General Licence on the grounds that the appellants were not considered Actual Users of the imported goods, their registration was for different electronic gadgets, and the quantity imported exceeded their requirements. However, the Tribunal disagreed with the lower authorities' conclusion. It was noted that there is a time-lag between obtaining an industrial license and starting production, and the appellants were in the process of setting up their factory for production. The appellants provided evidence of using imported components in their end-products, demonstrating their status as Actual Users. The Tribunal emphasized the objective of the import/export policy to encourage local production and value addition, supporting the appellants' eligibility for the exemption.

Issue 2: Imposition of fine and penalty for violation of import trade control restrictions.
The lower authorities imposed a fine and penalty on the appellants for allegedly violating import trade control restrictions by importing goods in excess of their requirements. However, the Tribunal found no basis for this allegation. It was highlighted that the Open General Licence did not specify quantity restrictions for Actual Users, and any post-importation violation fell under the jurisdiction of the Chief Controller of Imports and Exports, not customs. The Tribunal ruled that the appellants, as Actual Users, were eligible for the Open General Licence and the exemption notification, overturning the lower authorities' decision and granting consequential relief to the appellants.

In conclusion, the Appellate Tribunal CEGAT, New Delhi, allowed the appeals filed by the appellants against the denial of concessional rate of customs duty and the imposition of fines and penalties, declaring them as Actual Users eligible for the exemption notification and Open General Licence.