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Issues:
- Validity of import licences under Appendix 17 (A. 82 category) for consignment of Hydroquinone against REP licence. - Interpretation of the ITC Policy 1985-88, specifically para 21(c) regarding inter se interpretation of entries in various Appendices. - Predominant use of the imported goods as a determining factor for classification under the Customs Act, 1962. - Consideration of expert opinions and technical literature in determining the classification of the imported goods. - Review of previous consignments and decisions by the Collector (Appeals) regarding acceptance of REP licences. Analysis: The judgment by the Appellate Tribunal CEGAT, Madras dealt with two appeals against orders passed by the Collector of Customs, Madras, concerning the import of Hydroquinone against REP licences issued under Appendix 17 (A. 82 category) of the import policy period 1985-88. The Collector held that the import licences were not valid to cover the goods imported, leading to confiscation and fines in both cases. The appellants argued that the goods were covered by Appendix 3 and permissible for import under Appendix 17, citing technical opinions and expert literature supporting the use of Hydroquinone as an electroplating salt and brightener. The learned Consultant for the appellants contended that Appendix 17 was not subject to Appendix 3 and that the goods fell under the permissible import category. He referenced previous consignments and decisions by the Collector (Appeals) supporting the acceptance of REP licences for similar goods. On the other hand, the Department argued that para 21(c) of the ITC Policy 1985-88 should prevail, emphasizing the specific description in Appendix 3 Part A over generic descriptions in other Appendices. The Collector relied on the Supreme Court's criterion of predominant use to classify the goods, considering the limited application of Hydroquinone as an electroplating salt and brightener. The Tribunal analyzed the submissions and technical evidence presented. It noted that Hydroquinone was used as a grain refiner and brightener in the electroplating process, contrary to the Customs House's view. Referring to a previous decision by the West Regional Bench of the Tribunal, the Tribunal agreed that items not specifically mentioned in Appendix 2 Part B did not have overriding force over Appendix 17. It also highlighted the importance of para 5 in Appendix 17 as the prime criterion for assessing licence validity. The Tribunal concluded that the appellants' contentions were valid, considering the expert opinions, previous decisions, and the parameters of the Import Policy, ultimately allowing the appeals and overturning the impugned orders.
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