1988 (12) TMI 249 - AT - Customs

Summary

Issues Involved:
1. Validity of REP licence for importing Potassium Cyanide.
2. Application of Import Policy and precedence of specific entries over generic entries.
3. Binding nature of Tribunal's decisions on lower authorities.

Detailed Analysis:

1. Validity of REP Licence for Importing Potassium Cyanide:
The appellants, M/s Chirag International, imported consignments of Potassium Cyanide and sought clearance against REP licence No. 313652/C/LL/03/B/86, which was valid for the import of Electroplating Salts and Brighteners. The customs objected, arguing that Potassium Cyanide is specifically listed in Appendix 3 Part A at Serial No. 355(1), whereas Electroplating Salts and Brighteners are listed separately at Serial 131 of the Policy AM 1985-88. The Assistant Collector of Customs held that the licence was not valid for the imported goods and ordered confiscation with an option for redemption on payment of a fine.

2. Application of Import Policy and Precedence of Specific Entries Over Generic Entries:
The Collector (Appeals) upheld the Assistant Collector's decision, emphasizing that a specific entry in the Import Policy takes precedence over a generic entry. The Collector (Appeals) noted that Potassium Cyanide has very scant usage as an electroplating salt and brightener, which was not disputed by the appellants. The Collector (Appeals) concluded that the order of the Tribunal (CEGAT) suffered from infirmities and rejected the appeals based on Paragraph 21(c) of the Import Policy, which indicates that items specifically named in Appendix 3A cannot be imported under a generic entry.

3. Binding Nature of Tribunal's Decisions on Lower Authorities:
During the hearing, the appellants argued that the issues were covered by a previous Tribunal decision (Order No. 71/88-WRB, dated 14-1-1988, reported in 1988 (38) E.L.T. 339). The Tribunal had previously held that Potassium Cyanide could be imported under the generic entry "electroplating salts and brighteners" despite its scant use in electroplating. The Tribunal emphasized that the Import Policy did not restrict items with minor applications in electroplating from being considered electroplating salts. The Tribunal also noted that the licencing authority had the opportunity to disallow Potassium Cyanide but chose not to, implying its acceptance under the generic entry.

The Tribunal criticized the Collector (Appeals) for not adhering to its binding decision and for making uncalled-for remarks about the Tribunal's order. The Tribunal cited the Supreme Court's observation in East India Commercial Co. Ltd. v. Collector of Customs, which emphasized that administrative tribunals must conform to the law declared by superior courts to avoid confusion and ensure respect for the law.

Conclusion:
The Tribunal concluded that the issues in the appeals were fully covered by its previous decision (1988 (38) E.L.T. 339). The Tribunal allowed both appeals, set aside the orders of the lower authorities, and directed that the appellants be granted consequential relief. The Tribunal reiterated that lower authorities are bound by its decisions and must follow them unless overturned by a higher authority.