2000 (3) TMI 281 - AT - Customs

Summary

Issues Involved:
1. Validity of Import Licence for Alloy Steel Bars
2. Classification of Imported Goods under Appendices
3. Confiscation and Penalty under Customs Act
4. Established Practice and Abrupt Changes in Classification

Detailed Analysis:

1. Validity of Import Licence for Alloy Steel Bars:
The appellant sought to clear alloy steel bars under specific import licences. In the first case, the goods were valued at Rs. 11,02,469/- under Bill of Entry No. 1604/95, and in the second case, the goods were valued at Rs. 3,03,634/- under Bill of Entry No. 2860/152. The import licences in question were scrutinized against the Appendices of the AM Policy 1984-85. The appellant argued that the licences were valid for the import of the items listed in Appendix 4. However, the authorities contended that the goods fell under Appendix 3B, which required a different import licence. The Tribunal found that the import licences did not cover the imported goods as they were classified under a specific entry in Appendix 3B, which prevailed over the general description in Appendix 4.

2. Classification of Imported Goods under Appendices:
The main contention was whether the imported alloy steel bars fell under Appendix 3B or Appendix 4C. The authorities classified the goods under serial No. 9(b) of Appendix 3B, which pertains to specific tool and die steel. The appellant argued that the goods were covered under the general description of alloy steel in Appendix 4C. The Tribunal referred to previous judgments and established that specific descriptions in Appendix 3B prevail over general descriptions in Appendix 4C. Thus, the goods were rightfully classified under Appendix 3B.

3. Confiscation and Penalty under Customs Act:
The authorities confiscated the goods under Section 111(d) of the Customs Act, 1962, with a redemption fine imposed on the appellant. In the first case, the fine was Rs. 80,000/-, and in the second case, Rs. 3 lakhs. The Tribunal upheld the confiscation and penalties, citing that the import was unauthorized as it did not comply with the valid import licence requirements. The appellant's claim that previous clearances justified the current import was rejected, as the earlier allowances did not set a precedent for exceeding the stipulated import limits.

4. Established Practice and Abrupt Changes in Classification:
The appellant argued that the Customs Department had previously allowed similar imports under the same licence conditions and that any abrupt change in classification was unjustified. The Tribunal acknowledged that established practices should not be changed abruptly. However, it emphasized that the correct classification under the law must prevail. The Tribunal found that the goods were correctly classified under Appendix 3B, and any previous errors in classification did not justify continuing the incorrect practice.

Conclusion:
The appeals were allowed, and the impugned orders were set aside. The Tribunal concluded that the goods were rightfully classified under Appendix 3B, and the import licences did not cover the imported goods. The confiscation and penalties imposed under the Customs Act were upheld, but the appeals were allowed with consequential relief according to law.