2006 (3) TMI 54 - HC - Customs

EXIM Electronic games and toys Common parlance test not covered the goods fall under Tariff heading 9503.90 - Revenue argued that goods were consumer goods and not importable under (Special Import License) SIL but needed another licence Importer have sufficient ground to bona fide belief that impugned goods import under SIL

Summary

Issues:
1. Interpretation of Import Trade Control Licence for goods not listed in the Handbook of Procedure.
2. Application of common parlance test for identifying goods under a specific Tariff Heading.
3. Scope of forming a bona fide belief for importability against a special import licence.
4. Validity of judicial pronouncement based on assumption or presumption.

Analysis:

Issue 1:
The case involved determining the eligibility of an Import Trade Control Licence for goods not listed in the Handbook of Procedure. The respondent imported battery-operated toys under a special import licence. The Commissioner of Customs confiscated the goods, alleging misclassification as consumer goods falling under a different Tariff Heading. However, the Tribunal found that the licence allowed import of electronic games/toys under a specific description in the Handbook of Procedure. The Tribunal concluded that the goods were importable under the special import licence, as per the Appendix XXXV of the Handbook.

Issue 2:
Regarding the application of the common parlance test for identifying goods, the Tribunal considered the classification by the Commissioner under Tariff Heading 9503.90. The Tribunal found that the goods fell under electronic games/toys, which were importable against the special import licence. The Tribunal emphasized that the goods' description in the licence aligned with the permissible items in the Handbook of Procedure, allowing for import under the specified exim code.

Issue 3:
The issue of forming a bona fide belief on the part of the importers was crucial in this case. The Tribunal noted that the importers acted in good faith based on the licence obtained, which specifically mentioned eligibility for items listed in the Handbook of Procedure. Despite the discrepancy in classification, the Tribunal held that the importers had a reasonable doubt about the goods' importability under the special import licence, supporting a bona fide belief.

Issue 4:
Lastly, the validity of a judicial pronouncement based on assumption or presumption was addressed. The Tribunal's decision was grounded in the lack of evidence proving any violation by the importers. The High Court concurred with the Tribunal's findings, emphasizing that the decision was not speculative but based on the lack of proof of any wrongdoing by the importers. The High Court ultimately ruled in favor of the importers, disposing of the reference against the Revenue without costs.

In conclusion, the judgment clarified the interpretation of the Import Trade Control Licence, the application of the common parlance test, the importance of bona fide belief in import transactions, and the necessity of evidence in legal pronouncements.