1988 (8) TMI 194 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the imported goods.
2. Validity of the ITC licences for the importation of the goods.
3. Applicability of Customs Act provisions for confiscation and penalties.

Detailed Analysis:

1. Classification of the Imported Goods:
The appellants imported consignments described as Paraffinic Rubber Plasticizers and Plastic Oil - 350 USP, seeking clearance under Heading 27.10(9) of the Custom Tariff Schedule 1975. The goods were initially assessed under residuary sub-heading 27.10(1) pending test results. The Deputy Chief Chemist's report identified the goods as liquid paraffin of non-pharmacopoeial grade, which was covered under Appendix 9 of the AM 83-84 policy and could only be imported by the Indian Oil Corporation. Upon retesting at the Central Revenues Control Laboratory, the goods were identified as 'White Oil of Technical Grade'. The Chief Chemist's final opinion, after considering the manufacturer's literature, indicated that the goods were Paraffinic Rubber Plasticizers.

2. Validity of the ITC Licences for the Importation of the Goods:
The appellants argued that the goods were covered by entry 254 in Appendix 5 of the Import Trade Control Policy for April 83 to March 84, which included "Paraffinic/Naphthenic/Aromatic Rubber Plasticizers". The Collector held that the goods were White Oil, covered by entry 24 in Appendix 9, and thus not eligible for clearance under the licences produced. However, the Tribunal, after considering the Chief Chemist's final opinion, concluded that the goods were indeed Paraffinic Rubber Plasticizers and should be classified under entry 254 of Appendix 5, making the licences valid for their importation.

3. Applicability of Customs Act Provisions for Confiscation and Penalties:
The Collector had ordered the goods liable to confiscation under Section 111(d) of the Customs Act and imposed a penalty under Section 112, as the goods were not covered by the licences produced. Since the goods were released on a Test-cum-ITC Bond, the terms of the Bonds were enforced to the extent of Rs. 28,96,849.00, and a penalty of Rs. 7,00,000/- was imposed. The Tribunal, however, set aside the Collector's order, concluding that the licences were valid, thus negating the grounds for confiscation and penalties.

Conclusion:
The Tribunal concluded that the imported goods were Paraffinic Rubber Plasticizers, validly covered under entry 254 of Appendix 5 of the AM 83-84 ITC Policy. Consequently, the ITC licences produced were valid for the importation of the goods, and the Collector's order for confiscation and penalties was set aside. The appeal was allowed with consequential relief to the appellants, though the classification under the Customs Tariff Schedule, 1975, was not determined in these proceedings.