1995 (6) TMI 114 - AT - Customs

Summary

Issues:
1. Validity of provisional registration certificate for import of machinery.
2. Confiscation of imported machinery.
3. Legal status of Import Policy.
4. Option to redeem confiscated goods.
5. Determination of value of imported machinery.

Analysis:

Issue 1: Validity of provisional registration certificate for import of machinery
The appellant, a small scale industry, imported machinery under a provisional registration certificate. The Director of Industries canceled the certificate as the appellant failed to take necessary steps for establishing the unit. The appellant argued that possession of the certificate made them an Actual User entitled to import machinery. However, the Tribunal held that the cancellation was due to the appellant's inaction despite possessing the certificate, indicating a lack of qualification for regular registration. The Tribunal concluded that the appellant's status on the date of import did not meet the criteria for an Actual User, as the machinery was detained by Customs and not utilized for establishing the unit.

Issue 2: Confiscation of imported machinery
The Collector of Customs confiscated the imported machinery, citing non-entitlement under the Open General Licence due to the appellant's non-existent or non-functional status. The Tribunal upheld the confiscation, emphasizing that the provisional certificate did not guarantee entitlement to import machinery if the unit was not operational. The Tribunal reasoned that treating the appellant as an Actual User would defeat the policy's purpose, considering the lack of substantial progress towards unit establishment.

Issue 3: Legal status of Import Policy
The appellant argued that the Import Policy was an executive instruction and not legally binding. However, the Tribunal differentiated the case from precedent, stating that the policy's applicability was crucial to determining the appellant's entitlement as an Actual User. The Tribunal highlighted that the appellant's lack of a functional factory, as found by the licensing authority and Customs, rendered them ineligible for importing goods under the policy.

Issue 4: Option to redeem confiscated goods
The appellant contended that unequal treatment was given regarding the option to redeem confiscated goods. The Tribunal acknowledged the necessity of offering the appellant an option to redeem the machinery and modified the order to provide such an option upon payment of a fine. The Tribunal also clarified that the redemption option should be exercised by the proprietor of the firm.

Issue 5: Determination of value of imported machinery
Regarding the valuation of the imported machinery, discrepancies arose between the appellant's claimed value and the Collector's assessment. The Tribunal recalculated the value based on specific items in the consignment, reducing the redemption fine and penalty accordingly. The Tribunal considered additional evidence submitted by the appellant but deemed it inconsequential to the decision-making process.

In conclusion, the Tribunal dismissed the penalty imposed on the appellant, citing a lack of evidence indicating the import was solely for selling the machinery. The appeals were disposed of accordingly, with modifications to the redemption fine and penalty amount.