1994 (2) TMI 151 - AT - Customs

Summary

Issues:
- Denial of benefit of exemption Notification No. 171/90-Cus.
- Possession of Drug Licence at the time of importation

Detailed Analysis:
The appellants were engaged in manufacturing Intravenous Solution in Asceptic Packing Form and imported a special plastic material, LDPE, under Notification No. 171/90-Cus. The authorities denied the benefit of the notification as the appellants did not possess a Drug Licence at the time of importation, even though they obtained it during the adjudication proceedings. The Assistant Collector and the Collector (Appeals) upheld the denial based on the lack of possession of the Drug Licence at the time of importation.

The appellants argued that they applied for the Drug Licence before importation, as the process of importation begins when the ship enters territorial waters and ends upon customs clearance. They highlighted delays in customs clearance due to disputes, including a machine import in 1990 that was not cleared until January 1991. The appellants contended that they fulfilled all conditions of the Notification and should not be penalized for a technicality regarding the timing of Drug Licence possession.

The Respondent supported the denial of benefits, citing precedents that importation occurs upon goods entering territorial waters and that strict construction of the Notification is required. They emphasized that possession of the Drug Licence at the time of importation is crucial for eligibility under the Notification.

The Tribunal reviewed past cases where benefits were granted despite technicalities regarding timing of document possession. They cited a case where a refund was allowed despite missing certificates at the time of importation. The Tribunal held that the appellants were entitled to the benefit of the exemption Notification, as they fulfilled all conditions despite the timing discrepancy with the Drug Licence possession. The Tribunal emphasized that a highly technical view should not override substantial compliance with Notification requirements.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeal in favor of the appellants, granting them consequential relief according to law. The judgment focused on the substantial compliance with Notification conditions rather than a strict interpretation of the timing of possession of the Drug Licence at the time of importation.