1995 (2) TMI 182 - AT - Customs

Issues Involved:
1. Nature and extent of violation of the terms of the import licence.
2. Quantum of the redemption fines and penalties.
3. Interpretation of the term "copier frame" in the import licence.
4. Valuation of the imported components.
5. Applicability of the Import Policy 1984-85.
6. Assessment of the role of licensing authorities and Customs authorities.

Detailed Analysis:

1. Nature and Extent of Violation of the Terms of the Import Licence:
The Tribunal found that the appellants had imported a number of items in complete assembly with the main frame, which were not listed in the licence. The Collector of Customs concluded that the appellants had virtually imported complete photocopier machines, contrary to the phased development programme (PDP) under which the goods were imported. The Tribunal upheld the Collector's finding that the licence did not cover the goods, leading to confiscation under Section 111(d).

2. Quantum of the Redemption Fines and Penalties:
The Supreme Court remanded the case to the Tribunal to reconsider the fines and penalties, emphasizing the need to determine the nature and extent of the violation and the appropriate fines and penalties. The Tribunal, considering the absence of action by licensing authorities, the demurrage incurred, and the Supreme Court's direction, reduced the fines and penalties significantly.

3. Interpretation of the Term "Copier Frame" in the Import Licence:
The appellants argued that the term "copier frame" referred to a sub-assembly, not just a bare frame, as evidenced by its value being 34% of the total licence value. The Tribunal, however, found that the imported goods included numerous parts not listed in the licence, indicating that the term "copier frame" was not intended to cover such a broad range of components.

4. Valuation of the Imported Components:
The Tribunal had earlier found in favor of the appellants on the question of valuation, agreeing that the appellants and the foreign suppliers were not "related persons." The Supreme Court directed a fresh appraisal of the value of one item, "cover glass," which the Tribunal ultimately valued at Rs. 20, as suggested by the appellants.

5. Applicability of the Import Policy 1984-85:
The Tribunal and the Collector interpreted Serial No. 451 in Appendix 3 Part A of the Import Policy 1984-85, which allowed components of photocopying machines excluding electronic components. The Tribunal found that the imported goods included populated PCBs, which are electronic components, thus not covered by the licence.

6. Assessment of the Role of Licensing Authorities and Customs Authorities:
The Tribunal noted that the customs authorities are required to take the assistance of import trade control authorities in cases of doubt regarding the technical nomenclature of components. However, no action had been taken by the import trade control authorities against the appellants. The Tribunal emphasized that the customs authorities have the jurisdiction to determine whether the goods imported were in accordance with the licence description.

Conclusion:
The Tribunal's detailed analysis affirmed the Collector's findings regarding the nature of the violation of the import licence terms, leading to the confiscation of goods under Section 111(d). The fines and penalties were significantly reduced in light of the Supreme Court's guidance and the circumstances of the case. The interpretation of "copier frame" was restricted to a narrower scope, excluding numerous additional components imported by the appellants. The valuation of the "cover glass" was settled at Rs. 20, and the Tribunal dismissed the Department's appeals for higher penalties, concluding that the appellants' import practices did not align with the licence terms.

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