1992 (6) TMI 125 - AT - Customs

Summary

Issues Involved:

1. Whether the subject goods (Fax Machines) are non-OGL capital goods.
2. Whether the subject goods can be imported against Exim Scrips in terms of para-195(A) of the Policy AM 1990-93.

Detailed Analysis:

Issue 1: Whether the subject goods (Fax Machines) are non-OGL capital goods.

The appellants contended that Fax Machines should be considered capital goods as per the definition found in para-7(11) of the relevant policy. The Department initially treated Fax Machines as capital goods during the policy period of 1985-88, and the definition of capital goods remained identical in both policy periods (1985-88 and 1990-93). The appellants argued that the Customs Authorities had previously allowed the clearance of such goods, and there was no reason to change this classification.

The Department, however, viewed Fax Machines as office machines governed by para-124 of the Policy 1990-93, which restricts the import of office machines to one unit for the registered exporter's own use. The Department also noted that the goods were misdeclared as being of Singapore origin when they were actually made in Japan, leading to the conclusion that the goods were liable for confiscation under Sections 111(d) and (m) of the Customs Act, 1962.

The Tribunal concluded that the definition of capital goods for both policy periods was identical, and the Department's previous treatment of Fax Machines as capital goods should continue. The Tribunal referred to the decision of the Supreme Court in Indian Metals & Ferro Alloys Ltd. v. Collector of Central Excise, which emphasized that a contemporaneous exposition by administrative authorities is a useful and relevant guide for interpreting policy expressions. Therefore, the Tribunal held that Fax Machines imported by the appellants are capital goods.

Issue 2: Whether the subject goods can be imported against Exim Scrips in terms of para-195(A) of the Policy AM 1990-93.

The appellants argued that para-195(A) of the policy, introduced later, should prevail over para-124. Para-195(A) allows the import of permissible non-OGL capital goods without any upper value limit and without the actual user condition. The appellants contended that the restrictions under para-124 and para-214 relate to specific imports and do not apply to imports made under para-195(A).

The Department argued that para-124, which specifically deals with office machines, should prevail over the more generic para-195(A). The Department contended that the import of office machines, including Fax Machines, should be governed by the specific provisions of para-124 and not by the generic provisions of para-195(A).

The Tribunal examined the relevant policy provisions and the amendments brought in by Public Notice No. 250/ITC(B)/90-93, dated 28-11-1991. The Tribunal noted that the amendment to para-220(3)(iii) eliminated the upper limit for the import of permissible non-OGL capital goods, including office machines. The Tribunal concluded that para-195(A) permits the import of such goods without any upper limit and without the actual user condition, independent of the restrictions in para-124.

The Tribunal held that there was no conflict between para-195(A) and para-124. Even if there were a conflict, the later-introduced para-195(A) would prevail over the earlier para-124. The Tribunal found that the import of Fax Machines was in accordance with para-195(A) of the Import Policy 1990-93 and that there was no violation of Section 111(d) of the Customs Act, 1962. Consequently, the confiscation of the goods and the imposition of penalties were set aside.

Conclusion:

The Tribunal allowed the appeal, setting aside the confiscation of the goods and the imposition of penalties, and concluded that Fax Machines are non-OGL capital goods that can be imported under para-195(A) of the Policy AM 1990-93.