1995 (8) TMI 128 - AT - Customs

Summary

Issues Involved:
1. Validity of the import licence for Populated Printed Circuit Boards (PPCBs).
2. Classification of PPCBs as capital goods.
3. Jurisdiction of Customs authorities to question the endorsement on the import licence.
4. Consistency in the application of import policies by Customs authorities.
5. Appropriateness of the redemption fine imposed.

Issue-wise Detailed Analysis:

1. Validity of the Import Licence for PPCBs:
The primary contention revolves around whether the import licence produced by the appellant was valid for the importation of PPCBs. The appellant argued that the licence covered PPCBs as per the list attached to it, and therefore, it should be considered valid for the importation of the goods. The lower authority, however, held that the licence was invalid for the import of PPCBs during its extended validity period, as the extension was specifically for capital goods alone. The tribunal observed that the appellant had not made any plea regarding the validity of the licence and argued solely on the merits that the list attached to the licence covered the imported goods. The tribunal concluded that the order of the lower authority was maintainable in law, as the extended validity period was for capital goods alone, and PPCBs could not be considered as such.

2. Classification of PPCBs as Capital Goods:
The lower authority classified PPCBs as non-capital goods, stating that according to the ITC policy for 1985-88, capital goods are defined as "any plant, machinery, equipment or accessories required by an investor for production of goods or for rendering services including those required for replacement or expansion." The tribunal agreed with this classification, noting that PPCBs could not be considered capital goods in normal commercial parlance. Therefore, the endorsement extending the validity of the licence for capital goods alone precluded the importation of PPCBs during the extended validity period.

3. Jurisdiction of Customs Authorities to Question the Endorsement:
The appellant contended that the endorsement on the licence for the import of PPCBs was made on the recommendation of the DGTD, and it was outside the jurisdiction of the Customs authorities to question the correctness or propriety of the same. The appellant cited judgments from the Madras and Bombay High Courts, which held that the recommendations of the DGTD were binding on the Customs authorities. The Vice President, in his separate judgment, agreed with this contention, stating that the Customs authorities could not sit in judgment over the power exercised by the office of the Controller of Imports and Exports.

4. Consistency in the Application of Import Policies by Customs Authorities:
The appellant argued that the past practice of the Customs was to permit the clearance of similar goods against such licences. The Vice President noted that the adjudicating authority had not considered the rulings of the Madras and Bombay High Courts, nor the effect of the recommendation of the DGTD. He emphasized that if the Department allowed clearances of identical goods under identical licences in the past, it should not reject similar licences in the present case, as this would lead to an anomalous situation and arbitrary decisions, offending the spirit of Article 14 of the Constitution of India.

5. Appropriateness of the Redemption Fine Imposed:
The tribunal observed that no case was made out for the reduction of the redemption fine fixed by the lower authority. The Vice President, however, noted that the adjudicating authority had not levied any penalty on the appellant and had observed that there was no intention to contravene any legal provisions. He concluded that the impugned order should be set aside, and the matter should be remitted to the adjudicating authority for reconsideration, specifically considering the licence of the appellant and the points set out by him.

Final Order:
In light of the majority view, the impugned order was set aside, and the matter was remanded to the adjudicating authority for de novo adjudication. The tribunal emphasized the need for the adjudicating authority to specifically consider the licence of the appellant in the context of the pleas put forth and the points set out before the Tribunal.