1988 (3) TMI 196 - AT - Central Excise

Summary

Issues:
1. Interpretation of the note in para 5 of appendix-5/Pt.B regarding importation of Khaskhas (Poppy Seeds) under OGL.
2. Application of the principle of ejusdem generis in interpreting the said note.
3. Consideration of previous decisions and their impact on the current case.
4. Assessment of the imposition of fine in lieu of confiscation.

Interpretation of the Note in Para 5 of Appendix-5/Pt.B:
The case involved the appellant-importer claiming the import of Khaskhas under OGL S.No.1 as raw material under appendix-6, while the department contended that the seeds were covered by the note in para 5 of appendix-5/Pt.B of the Policy. The note specified that all other oils/seeds not specifically mentioned elsewhere in the Policy would be imported only by the canalising agency. The appellant's advocate argued for a restrictive interpretation based on the principle of ejusdem generis, citing various court rulings. However, the tribunal held that the note clearly intended to cover all other seeds not elsewhere specified in the Policy, thus Khaskhas seeds fell under this provision and could not be imported under OGL.

Application of the Principle of Ejusdem Generis:
The appellant's argument relied on the principle of ejusdem generis to interpret the note in para 5 of the Policy. The tribunal acknowledged the principle but emphasized that it was a secondary principle and should only be applied when there was an absurdity arising from literal construction. The tribunal concluded that the note unambiguously required all other seeds not specifically mentioned in the Policy to be imported by the canalising agency, rejecting the appellant's argument that this interpretation would render other provisions of the Policy nugatory.

Consideration of Previous Decisions:
The appellant cited a previous decision where similar goods were treated under OGL by the Collector (Appeals) Customs, arguing for consistency in treatment. However, the tribunal held that the previous decision was not binding in the current case and emphasized that the note in the Policy clearly dictated the importation requirements. The tribunal also dismissed the relevance of a clarification from the State Trading Corporation (STC) in interpreting the Policy, stating that STC was not the competent authority for such interpretations.

Assessment of Imposition of Fine:
Regarding the imposition of a heavy fine in lieu of confiscation, the tribunal considered various factors such as the importer being an actual user of the goods as raw material for drug manufacturing. The tribunal also noted that similar goods were treated differently in a previous decision. Consequently, the tribunal reduced the fine to Rs. 8000 in each case, considering the importer's circumstances and the need for justice.

In conclusion, the tribunal upheld the department's contention regarding the importation of Khaskhas seeds under the specified note in the Policy, applying legal principles and disregarding inconsistent interpretations from previous decisions. The fine imposed was reduced based on the importer's status and previous treatment of similar goods.