1989 (8) TMI 201 - AT - Customs

Summary

Issues Involved:
1. Mis-declaration of goods
2. Eligibility for exemptions and rates of duty
3. Eligibility for import under OGL (Open General License)
4. Requirement of an industrial license under the IDR Act
5. Applicability of Section 111(d) of the Customs Act
6. Validity of the Collector's order

Detailed Analysis:

1. Mis-declaration of Goods:
The central issue was whether the imported goods were correctly declared. The Respondents described the goods as "Cinematographic Colour Films (unexposed) positive," but Customs found them to be Jumbo Rolls. Customs suspected deliberate mis-declaration to avail a lower duty rate. The Collector initially found no mis-declaration, but the Tribunal noted the goods were indeed Jumbo Rolls, not cinematographic films, as the Respondents themselves admitted the goods were not usable as cinematographic films in their imported form.

2. Eligibility for Exemptions and Rates of Duty:
The Respondents claimed concessional rates under Notification Nos. 52/86-Cus and 50/88-C.E. The Collector found the Respondents ineligible for these concessions. The Tribunal upheld this finding, noting that the goods were Jumbo Rolls and not entitled to the claimed exemptions. The Tribunal emphasized that the classification should be based on the goods' form at the time of import.

3. Eligibility for Import Under OGL:
The Respondents argued they were eligible for OGL based on their SSI Registration Certificate. The Tribunal examined the definition of "actual user (industrial)" under the Import and Export Policy 1988-91, which requires an industrial license for certain activities. The Tribunal concluded that the Respondents needed an industrial license for slitting/confectioning Jumbo Rolls, which they did not possess. Thus, they were not eligible for OGL.

4. Requirement of an Industrial License Under the IDR Act:
The Tribunal analyzed the IDR Act and relevant notifications. It found that the Respondents' activity of slitting/confectioning Jumbo Rolls required an industrial license post-18-7-1986. The Respondents' argument that they were not a factory and thus not an industrial undertaking was dismissed, as it was inconsistent with their claim of being actual users (industrial). The Tribunal held that compliance with the IDR Act was necessary for OGL eligibility.

5. Applicability of Section 111(d) of the Customs Act:
The Tribunal noted that the Collector's order did not invoke Section 111(d) despite discussing licensing issues. The Tribunal found this omission significant, as the goods were imported without the required industrial license, making them liable for confiscation under Section 111(d). The Tribunal criticized the Collector for not applying this section and directed a re-adjudication with a proper show cause notice.

6. Validity of the Collector's Order:
The Tribunal found the Collector's order lacked proper discussion and application of mind. The order was deemed unsustainable due to its vague references and lack of detailed reasoning. The Tribunal set aside the Collector's order and directed a re-adjudication, emphasizing the need for a written show cause notice outlining detailed charges.

Conclusion:
The appeal was allowed by remand, directing the Collector to re-adjudicate the matter with a written show cause notice, considering the Tribunal's observations on licensing, applicability of Section 111(d), and the necessity for detailed discussions and findings.