1996 (3) TMI 201 - AT - Customs

Summary

Issues:
1. Import of Oxytetracycline HCL under open general license (OGL).
2. Interpretation of Import Trade Control Order 1 of 1982 and subsequent amendments.
3. Incorporation by reference of Appendix 4 in the Import Trade Control Order.
4. Valuation discrepancies in import pricing.
5. Allegations of antedating the letter of credit and penalties imposed.

Issue 1: Import of Oxytetracycline HCL under open general license (OGL)
The appellant imported Oxytetracycline HCL under OGL at US $28.30 per kg. The Collector held the import invalid, demanding differential duty, confiscating the goods, and imposing fines and penalties. The appellant challenged this decision, arguing that Oxytetracycline HCL could be imported under OGL as per Import Control Order 1 of 1982. The Department's view was based on an amendment to the Policy that included Oxytetracycline in Appendix 4, thereby restricting its import under OGL.

Issue 2: Interpretation of Import Trade Control Order 1 of 1982 and subsequent amendments
The appellant contended that the Policy and its amendments were executive in nature and could not override the statutory Import Control Order 1 of 1982. They argued that Appendix 4 was incorporated by reference in the Order, and any subsequent changes to Appendix 4 should not affect their rights under the original Order. Citing legal precedents, the appellant claimed that incorporation by reference makes the provision an integral part of the statute, shielding it from subsequent amendments.

Issue 3: Incorporation by reference of Appendix 4 in the Import Trade Control Order
The Tribunal analyzed the effect of incorporating Appendix 4 into the Import Trade Control Order 1 of 1982. While an amendment included Oxytetracycline HCL in Appendix 4, the original version did not cover it. Therefore, the bar on import in the original Order did not apply to Oxytetracycline HCL, allowing its import under OGL.

Issue 4: Valuation discrepancies in import pricing
The Collector compared the import price of Oxytetracycline HCL with a similar product from a different manufacturer, leading to a higher assessed price. However, the Tribunal found the margin between the prices insignificant, especially considering the different manufacturers. Consequently, the Tribunal deemed the price loading unjustified.

Issue 5: Allegations of antedating the letter of credit and penalties imposed
The appellants were accused of antedating the letter of credit to facilitate import under OGL. The Tribunal acknowledged the undesirable nature of this act but, since the import was permissible under OGL, the penalty imposed on the Bank Manager was deemed unjustified. Ultimately, the Tribunal set aside the impugned order and allowed the appeals.