1997 (5) TMI 248 - AT - Customs

Summary

Issues:
1. Classification of imported goods as consumer goods or industrial raw materials.
2. Interpretation of the term "raw material" under Import Policy 1992-97.
3. Determination of whether the imported goods directly satisfy human needs.
4. Assessment of the nature of the imported goods based on their use in production processes.

Analysis:
The case involved a dispute regarding the classification of imported goods as consumer goods or industrial raw materials. The Respondents imported goods for producing printed books and periodical materials, which were deemed as consumer goods by the Customs authorities, leading to confiscation and penalty. The Commissioner of Customs (Appeals) overturned the decision, stating that the goods were special adhesives used in machines for book production and not consumer goods. The appeal by the Commissioner of Customs, Mumbai, challenged this decision.

The Appellate Tribunal considered the arguments presented by both parties. The Appellant contended that the imported goods could be directly used as adhesives without further processing. On the other hand, the Respondents argued that the goods were raw materials used in machines for producing bound books, falling under the definition of "raw material" in the Import Policy 1992-97.

The Tribunal analyzed the definition of "raw material" under the Import Policy, which includes materials required for the manufacturing process, whether processed or in a natural state. The Respondents provided detailed explanations of how the imported goods were used in various machines for book production, such as case sealing and binding processes. The Tribunal noted that the goods required specific temperatures and machinery for application, indicating their industrial use as raw materials.

Based on the evidence presented and the nature of the imported goods, the Tribunal concluded that the goods were types of glue serving as raw materials for producing printed books. The goods did not directly satisfy human needs and required machinery for application. Therefore, the Tribunal upheld the decision of the Commissioner of Customs (Appeals) and rejected the appeal by the Commissioner of Customs, Mumbai.

In summary, the judgment clarified the classification of the imported goods as industrial raw materials based on their use in production processes, in line with the definition of "raw material" under the Import Policy 1992-97. The decision emphasized that the goods were not consumer goods directly satisfying human needs and required processing through machines for their intended industrial purpose.