1994 (11) TMI 226 - AT - Customs

Summary

Issues Involved:
1. Validity of the import licence for spares.
2. Retrospective application of the amended licence.
3. Compliance with customs procedures.
4. Eligibility for benefits under Notification No. 69/87-Cus.

Detailed Analysis:

1. Validity of the Import Licence for Spares
The appellants, engaged in manufacturing polyester chips, film, and filament yarn, imported a second-hand plant from the USA and applied for a supplementary licence for importing spares worth Rs. 87,89,707/-. The licence, dated 30th October 1986, did not bifurcate products covered under Open General Licence (OGL) and those not covered. The appellants requested bifurcation on 30th April 1987, specifying Rs. 2,00,000/- for scientific instruments, Rs. 20,00,000/- for restricted spares, and Rs. 65,89,707/- for spares under OGL.

2. Retrospective Application of the Amended Licence
The Department alleged the imports were unauthorized as the initial licence did not specifically cover restricted spares. The Assistant Collector imposed fines and penalties under Sections 111(d) & 112 of the Customs Act, 1962. The appellants' contention for retrospective application of the amended licence was rejected by the Collector of Customs (Appeals), who held that a valid licence or an ITC bond should have been furnished at the time of importation. The Collector emphasized that allowing retrospective application would lead to a "manageable and messy situation, not permitted under the law."

3. Compliance with Customs Procedures
The appellants argued they were prepared to provide an undertaking, which customs did not accept. The Collector of Customs (Appeals) found that customs rightly did not accept a mere undertaking and that the appellants did not ask for clearance on furnishing a proper ITC bond. Consequently, the imports were deemed unauthorized at the time of importation.

4. Eligibility for Benefits under Notification No. 69/87-Cus
The tribunal did not pronounce on the eligibility of the imports for benefits under Notification No. 69/87-Cus., dated 1-3-1987, as this issue was not raised before the adjudicating or appellate authorities.

Conclusion:
The tribunal reviewed the relevant correspondence and the licence endorsements, concluding that the disputed spare parts were covered by the endorsement, which retrospectively validated the prior imports. The tribunal accepted the appellants' submissions that the imported spares were covered by a valid licence, set aside the impugned order, and allowed the appeals with consequential relief. The tribunal clarified that it did not address the eligibility for benefits under Notification No. 69/87-Cus.