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TMI Blog1986 (8) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... ntravention of Import Trade Control Regulations. 2. Appearing on behalf of the Appellants, Advocate Shri Taleyarkhan submitted that the consignment in question was imported by the Appellants under the licence for brandy concentrate issued to the Appellants associates for the Policy A.M.-1973. The list pasted to the import licences permitted inter alia brandy concentrate as per S.No. G/2.1 on page 134 of the Import Trade Control Policy Volume II. The licences in question were issued to M/s. McDowells and Co. Ltd. account M/s. Herbertsons Ltd. and were transferred to M/s. Kamani Engineering Corporation Ltd. The goods in question were imported from France for blending with Indian made foreign liquor produced from locally made alcohol. The purpose for the blending was to impart the aroma of French brandy to the Indian made foreign liquor. It was necessary to import the alcohol of a higher strength, as this was necessary for the purpose of blending. The goods imported were over-proof as had been admitted in the Board s order. The goods were not meant for direct consumption after diluting with water as held by the Collector or the Board. In fact the Board had conceded that the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The fresh show cause notice issued took into account the description of brandy under the B.T.N. The Collector in the second adjudication order also relied on heading No. 22.09 in Section IV of the B.T.N. Based inter alia on this evidence the Collector held that the import licences were not valid for the goods in question. The Advocate argued that this finding of the Collector was not correct. He added that the B.T.N. was not meant for interpreting the Import Trade Control Schedule. While it was true that the imported goods came within the purview of heading No. 22.09 it was not true as held by the Collector that the brandy concentrate was drinkable as an alcoholic beverage. Referring to the French Customs Certificate, dated 18-3-1974 the Advocate argued that it described the goods as EAV-DE-VIE DEVIN. This meant Water of Life of Grapes . The Advocate stated that if the goods were potable brandy the certificate need not have described them as water of life . For a correct meaning EAV-DE-VIE DEVIN the Advocate referred us to the extract from Drinks and Drinking by John Doxat, a copy of which has been filed with the paper book. According to this authority EAU-DE-VIE wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice a different ground was taken up. However, in an identical case the Government of India had allowed revision petition as reported in 1981 E.L.T. 375 in the case of M/s. Tata Exports Ltd. and Another. A copy of this decision was filed with the Tribunal. Shri Taleyarkhan read para 10 onwards of the Government of India s order. He stated that the present appeal was identical with the case decided by the Government of India and therefore the benefit of that decision should be extended to the present appeal. Finally, the Advocate submitted that the fine in lieu of confiscation was grossly excessive and also against Section 125 of the Customs Act which laid down the limit of the fine. He contended that the c.i.f. value of the goods was Rs. 96,539/- and the duty leviable was Rs. 8,72,364/-. In determining the market value for the purpose of the levy of the fine the import duty was not to be taken into accounts. Therefore the maximum limit for the levy of fine could be Rs. 2,00,000/- only, in the present case. In this behalf the Advocate drew out attention to written submissions made before the first appellate authority, a copy of which has been filed in the paper book. In view of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute. But the volatile acidity was more than that prescribed for brandy vide letter, dated 4-7-1974 of Shri Jha to Shri Castellino of M/s. Herbertsons Ltd., Bombay. Similarly, the requirements of esters was more than the specification as per I.S.I. standard. As regards the C.C.N. Chapter Notes the same were referred by the Appellants during the course of the personal hearing before the Collector and they had claimed that as per these guidelines the goods came within the heading concentrated beverages within the heading 22.09. Shri Pal further referred to the Cegat s decision reported in 1983 E.L.T. 529 which laid down that B.T.N. explanatory notes were a valuable guide for the interpretation of the Customs Tariff. The decision reported in 1983 E.L.T. 1182 was also identical in nature. As regards Shri Chatrapathi s article Shri Pal contended that freshly distilled brandy was 35 to 50% over-proof. Therefore according to this authority the imported goods could be held to be brandy only. Shri Pal further referred to the aging of brandy in the same article which reduced the strength of brandy. Shri Pal further argued that the Appellant s contention that over-proof brandy was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellants with misdeclaration of the goods in the bill of entry. The show cause notices referred to the correspondence exchanged by the Appellants with others. The show cause notice presumed that the goods described in the correspondence were not brandy concentrate . This assumption was not correct. There was no claim in the correspondence that the goods were a finished product. The correspondence therefore does not help the Department in determining the correct nature of the goods. As regards the change in the subsequent Policy for the following year Shri Taleyarkhan submitted that the description of the goods permitted import was further narrowed down. This might be in favour of the Department s interpretation. But for the present import, AH-1973 Policy was relevant. The Appellants had referred to I.S.I. standard regarding alcohol contents for determining the classification of the goods. This was not disputed by the Department. As regards Shri Taleyarkhan s reliance on the Tribunal s decision in E.L.T. 1983 1182, this decision was with reference to the new Customs Tariff introduced by the Customs Tariff Act 1975. Hence this decision was relevant for the purpose of this appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Taleyarkhan requested that the present appeal should be allowed. In the alternative, he submitted that the Collector had violated Section 125 of the Customs Act in levying the amount of redemption fine and therefore the fine should be reduced substantially to come within the statutory limit if not totally set aside. 5. We have examined the submissions made on both the sides. The main point which calls for determination in the appeal is to decide the actual description of the goods imported with the licences produced for their clearance. The licences submitted for the clearances were RE licences permitting import inter alia of brandy concentrate . Therefore, the primary question to decide is whether the imported goods are brandy concentrate . In the show cause notice for de novo proceedings issued on 30-11-1976 the Custom House alleged that the licence was not valid as the importers could not explain the difference between Beehive Bouquet brandy and brandy concentrate . It was further alleged that brandy concentrate would mean a product in the nature of an essence to produce imitation brandy. In this behalf the Custom House relied on the import policy for the subsequent yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsons Ltd. and their sister concern M/s. McDowell Ltd. imported over-proof brandy under established importers licences for brandy. The Board also rejected the appellants contention relying on the fact that the brandy had different strengths in different countries of the world and that the goods did not fall in the category of compound alcoholic preparations for the manufacture of beverages. While both these authorities namely the Collector and the Board held that the imported goods were over-proof brandy, they rejected the licences through implication without specifically deciding the question as to what brandy concentrate is. From this point of view, even the appellants contentions are not to the point. Both the sides have not come forward with authentic definition of brandy concentrate which was permissible for import under the licences issued for the policy period 1972-73. Only during the course of the hearing of the appeal the learned advocate of the appellants referred in this behalf to the Compendium of Classified Opinions. The correct definition of brandy concentrate is only available from the Compendium of Classified Opinions. As per this authority brandy concentrate means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a host of technical opinion against the acceptance of this proposition. Therefore, despite the Board s finding that the brandy is of different strengths in different countries, it cannot be said that the goods are brandy for the purpose of this import. The chemical analysis of the goods shows that the goods were 2 O.P. They also contain certain solids which are not found in brandy as per I.S. specification. The correspondence seized from M/s. Herbertsons Ltd. indicates the purpose for which the goods have been imported viz. for blending with the locally made brandy. Therefore, the goods are covered by heading No. 22.09 of the B.T.N. for alcoholic preparation for the manufacture of beverages. Therefore the goods are not brandy. Nor is it possible to interpret the licences on the basis of the I.T.C. policy for the subsequent year. But this still leaves the question of acceptance of the licences open. The licences are for brandy concentrate. The goods are over-proof brandy and on the basis of evidence adduced by the appellants, they are meant for blending with the locally produced brandy. However, in deciding whether the licences are valid to cover the imports, our task has been f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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