1993 (3) TMI 209 - AT - Customs

Summary

Issues Involved:
1. Classification of Hypalon 40 under the Customs Tariff and Import Policy.
2. Binding nature of the Chief Controller of Imports and Exports' clarification on Customs Authorities.
3. Co-relation between Customs Tariff and Import Policy classifications.
4. Validity of importation under Open General Licence (OGL) based on prior clarification.

Detailed Analysis:

1. Classification of Hypalon 40 under the Customs Tariff and Import Policy:
The adjudicating authority classified Hypalon 40 as Chloro-sulphonated Polyethylene under Chapter 39 of the Customs Tariff, deeming it a plastic rather than synthetic rubber. This classification was pivotal in determining that Hypalon 40 could not be imported under the Open General Licence (OGL) as synthetic rubber. The appellants argued that Hypalon 40, known in trade and technical parlance as synthetic rubber, should be classified under Chapter 40. They relied on publications like the "Handbook of Rubber Technology" and "Rubber Technology" to substantiate their claim.

2. Binding Nature of the Chief Controller of Imports and Exports' Clarification on Customs Authorities:
The appellants had obtained a clarification from the Chief Controller of Imports and Exports that Hypalon 40 is covered under Serial No. 537 of Appendix 6 List VIII (Part I) of the 1990-93 Import Policy. They argued that this clarification, obtained prior to shipment, should bind the Customs Authorities. The adjudicating authority, however, contended that such individual clarifications are not binding unless there is a dispute on the scope of the entry or product specifications. The Tribunal referenced Paragraph 28 of the Import Policy, which states that the interpretation by the Chief Controller of Imports and Exports shall prevail over any other authority's clarification.

3. Co-relation between Customs Tariff and Import Policy Classifications:
The Additional Collector's reliance on Paragraph 65(2) of the Handbook of Procedures (1990-93) to argue that the classification for Customs Tariff should align with the Import Policy was challenged. The Tribunal clarified that while the schedules are aligned, the purposes of classification under the Customs Tariff (for duty assessment) and the Import Policy (for regulating imports) are distinct. The Tribunal cited the case of National Insulated Cables Co. of India Ltd. v. Collector of Customs, Calcutta, emphasizing that the objectives of the two enactments are different.

4. Validity of Importation under Open General Licence (OGL) Based on Prior Clarification:
The Tribunal found that the appellants had followed the prescribed procedure for obtaining a clarification from the licensing authority before shipment. The Tribunal referenced the case of Southern Sea Foods Private Ltd. v. Collector of Customs, Madras, which upheld that the Chief Controller's interpretation prevails. The Tribunal noted that since the appellants had obtained the necessary clarification before shipment, the import of Hypalon 40 under the OGL was valid. The Tribunal dismissed the Additional Collector's view that an individual clarification is not binding unless there is a doubt about the product's specifications.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellants. The Tribunal emphasized that the interpretation by the Chief Controller of Imports and Exports should prevail, and the distinct purposes of the Customs Tariff and Import Policy classifications should be recognized. The Tribunal concluded that the import of Hypalon 40 under the OGL was valid based on the prior clarification obtained by the appellants.