1995 (8) TMI 123 - AT - Customs

Summary

Issues Involved:
1. Propriety of the importation under OGL (Open General License).
2. Validity of the firm contract and its registration.
3. Eligibility of the importer as an actual user.
4. Compliance with the SSI (Small Scale Industry) registration requirements.

Detailed Analysis:

1. Propriety of the importation under OGL:

The appellant imported a two-color sheet-fed offset printing machine and sought clearance under OGL during the policy period April-March 1983. The department issued a show-cause notice alleging contravention of Clause 3(1) of the Import (Control) Order, 1955, read with Section 3 of the Imports & Exports (Control) Act, 1947. It was alleged that the importation of two-color offset machines was not permitted under OGL during the policy period AM '84, as only four-color machines were allowed. The department also questioned the eligibility of the importer as an actual user.

2. Validity of the firm contract and its registration:

The department contended that the firm contract for import should have been registered with the foreign exchange dealer (bank) before 28-2-1983. The show-cause notice highlighted discrepancies in the dates of sale confirmations and the registration of the contract. The appellant argued that the proforma invoice dated 24-1-1983 and the letter of credit dated 19-2-1983 constituted a firm contract. The Collector accepted the plea of registration of the contract with the banker but found that the contract was not registered before 28-2-1983, thus not meeting the required conditions.

3. Eligibility of the importer as an actual user:

The department alleged that the importer did not qualify as an actual user (industrial) as per the definition in the policy book. The appellant provided various certificates, including registration with the Registrar of Newspapers for India and CAPEXIL, and a municipal license for running a light industrial unit. However, the Collector held that the importer needed an SSI Registration Certificate from the State Director of Industries to qualify as an actual user. The Collector concluded that the importer was not an eligible actual user for importation under OGL during the relevant policy period.

4. Compliance with the SSI registration requirements:

The Collector found that the SSI Registration Certificate was issued on 24-4-1983, after the relevant date of importation. The appellant argued that they were eligible actual users based on their provisional SSI registration and other documentation. The Collector, however, held that the importation was unauthorized without a specific ITC license and ordered confiscation of the goods under Section 111(d) of the Customs Act, 1962. The Collector granted an option to redeem the goods on payment of a fine of Rs. 1,00,000/- but reduced it to Rs. 50,000/- considering the value of the imported goods.

Conclusion:

The Tribunal upheld the Collector's decision, emphasizing that the importer did not meet the criteria for actual user (industrial) as they did not have an SSI unit at the time of importation. The Tribunal found the redemption fine excessive and reduced it to Rs. 50,000/-. The appeal was otherwise dismissed, affirming the confiscation of the goods and the requirement of a specific ITC license for clearance.