1988 (9) TMI 222 - AT - Customs

Summary

Issues:
1. Interpretation of licensing period for imported goods.
2. Classification of chemicals imported as laboratory grade or restricted/banned items.
3. Application of Customs House practice in determining import eligibility.
4. Definition of laboratory chemicals under the Customs Tariff Act, 1975.
5. Adherence to ITC classification guidelines for imported chemicals.

Issue 1: Interpretation of licensing period for imported goods
The appeal concerned goods imported by the appellants under a replenishment license for export products. The licensing period specified in the license was April-March 1981, but the goods were imported in April-March 1982. The controversy arose due to this discrepancy in the licensing period.

Issue 2: Classification of chemicals imported as laboratory grade or restricted/banned items
The dispute revolved around the classification of five chemicals imported by the appellants, namely O-Cresol, Benzoyl Peroxide Moistened, Acetaldehyde, Ethyl Acrylate, and Methyl Acrylate. The department contended that these chemicals were either banned or restricted items according to Appendices 3 and 5 of the Import Policy 1981-82, thus not eligible for import under the replenishment license.

Issue 3: Application of Customs House practice in determining import eligibility
The appellants argued that the chemicals were of laboratory grade and not covered by the restrictions in Appendices 3 and 5. They relied on Customs House practice and previous orders to support their claim that laboratory grade chemicals without specific prefixes or suffixes were allowed for importation. The Tribunal acknowledged the Customs House practice and held that the chemicals imported were not covered by the Appendices, thereby permitting import under the license.

Issue 4: Definition of laboratory chemicals under the Customs Tariff Act, 1975
The Sr. Departmental Representative referred to Chapter Note 2 of Chapter 29 of the Customs Tariff Act, 1975, defining laboratory grade chemicals as those imported in packages not exceeding 1/2 kg or 1/2 liter, identifiable by purity, marking, or other features. He argued that the chemicals imported did not meet this definition and were not considered laboratory chemicals.

Issue 5: Adherence to ITC classification guidelines for imported chemicals
The Tribunal considered the ITC classification guidelines and noted that while Appendix 5 listed restricted items, Appendix 3 contained banned items. By analogy, items in Appendix 3 were deemed totally banned, including those in Appendix 5. The Tribunal emphasized that the chemicals imported by the appellants did not carry the required prefixes or suffixes to indicate laboratory grade, thus not falling under the banned or restricted categories.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the appellants based on the absence of specific prohibitions for laboratory grade chemicals in Appendices 3 and 5, supported by Customs House practice and previous orders.