1991 (8) TMI 215 - AT - Customs

Summary

Issues:
Interpretation of the description 'evaporators' in the REP Licence for import clearance against specific export product category A-46.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Bombay involved a dispute regarding the import clearance of evaporators for car air-conditioners against a REP Licence issued for export product A-46 category. The appellants claimed that the licence specifically endorsed the import of evaporators, while the customs department contended that the licence only covered evaporators for machine tools, not air-conditioners.

The appellants argued that the customs authorities should not question the end-use of the imported goods as long as they match the description in the licence. They relied on a Bombay High Court decision to support their position and emphasized that the licensing authorities had endorsed the import of evaporators, making it impermissible for customs to go beyond the licence's description.

On the other hand, the respondent contended that the description 'evaporators' in the licence referred specifically to evaporators for machine tools, as per Para 8 of Appendix 17. They cited Tribunal decisions in similar cases to support their interpretation.

The Tribunal, after hearing both sides, concluded that the description 'evaporators' in the licence pertained to export product 'machine tools' and not air-conditioners. The Tribunal highlighted Para 8 of Appendix 17, which clarified the endorsement process for items in the shopping list of the licence. It was established that the licensing authorities could not have endorsed evaporators meant for air-conditioners under the export product A-46 category.

Referring to a previous decision by the CEGAT Special Bench in a similar case, the Tribunal held that the licence description must align with the intended use of the imported goods. Consequently, the Tribunal upheld the order of confiscation but reduced the fine imposed on the appellants due to their misunderstanding and the incurred demurrage costs.

In conclusion, the Tribunal ruled in favor of the revenue, emphasizing that the description in the licence must correspond to the intended use of the imported goods, leading to the rejection of the appeal with a reduced fine of Rs. 30,000.