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TMI Blog1987 (8) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms, Bombay held an enquiry and ordered confiscation but allowed redemption on payment of a fine of Rs. 32,000/- in respect of one consignment, Rs. 19,000/- in respect of another consignment and Rs. 27,000/- in respect of third consignment. Feeling aggrieved by the order, the appellants herein preferred an appeal before the Appellate Collector who however confirmed the order passed by the Deputy Collector. 2. During the hearing of this appeal, Shri Nankani, Advocate submitted that the licence, against which the clearance was sought, was an additional licence issued to the Export House. The licence was endorsed for import of raw materials, components and spares (excluding those covered by Appendix 5) which has been placed on Open General Licence for Actual User in terms of para 176(1) and 172(2) of A.M. 1981 Policy. Shri Nankani contended that para 176(1) of the Policy A.M. 81 read with para 176 (2) of the said Policy permitted import of raw materials, components and spares other than appearing in Appendix 5 which have been placed on Open General Licence for Actual Users. Shri Nankani submitted that in para 176(1)(b) the expression used is Actual Users and not Actual Users I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that item could be imported only by person importing vehicles, agricultural tractors and that too upto a c.i.f. value of Rs. 5,000/- in a financial year and for their own use. Shri Pal further contended that the Policy regarding spares is spelt out in Chapter 9 and paragraph 54(1) permitted import under Open General Licence permissible spares by Actual Users both Industrial and Non-Industrial required by them for operation and maintenance of the capital goods. The spares imported by the appellants are not required for maintenance of their capital goods and further motor vehicle is not a capital goods. Shri Pal also referred to para 55 and 56 which provided for import of non-permissible spares. Shri Pal also contended that OGL items permitted under paragraph 176 of the Policy are items 1, 2, 4 and 5 of Appendix 10 and not item 25 of Appendix 10. It was further submitted by Shri Pal that even though the import was unauthorised, no penalty has been imposed and the fine imposed was reasonable. Any erroneous release made earlier could not confer right on the appellants to claim benefit of such erroneous release. 5. In reply, Shri Nankani contended that the expression permissible i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per provisions of para 176(1) and (2) of A.M. Policy Book, and is valid for import of items in accordance with the provisions made in para 176(1) and (2) of A.M. 1981 Policy Book. This endorsement was made on 15th May, 1980 . 8. Para 176(l)(b) of A.M. 1981 Policy permitted Export Houses to import raw materials, components and spares excluding those covered by Appendix 5 which have been placed on Open General Licence for actual Users against their Additional Licence which was endorsed in terms of para 176. The Additional Licence in question was endorsed in Terms of para 176(1) (2) of A.M. 1981. Thus, the licence in question was valid to import raw materials, components and spares which have been placed on Open General Licence for Actual Users. The objection raised by the Department for clearance of the goods was on the ground that the motor vehicles, spare parts are not placed under Open General Licence for Actual Users Industrial and Non-Industrial. The view of the Department was that spare parts of motor vehicles can be imported only by persons owning imported vehicles and further there is a value restriction, namely, the value cannot exceed Rs. 5,000/- in a financial ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease cited are also different. The order passed by the lower authority is therefore maintainable for reasons stated therein . 10. The contention of Shri Nankani that para 176(1)(b) permitted import of Open General Licence item 25 of Appendix 10 appears not sound. Para 176(1)(b) permitted Export Houses to import raw materials and components and spares which have been placed on Open General Licence for Actual Users. It is true that the words Actual Users is not qualified. It is not stated whether Actual Users Industrial or Non-Industrial . It is also true that in the earlier policy, namely, A.M. 1979 the words Actual Users was qualified, namely, it was stated that Actual Users Industrial, the omission of the word Industrial in the Policy A.M. 1981 had only enlarged the scope namely that the Export Houses under A.M. 81 Policy could import item placed on O.G.L. for Actual Users both Industrial and Non-Industrial. As a matter of fact, this was the view the Department had taken in the show cause notice. That view, according to us, is a correct view to be taken in the context. As far as the policy goes, there are only two categories of Actual Users, namely Actual User Industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce which bear the necessary endorsement. The expression permissible spares could take within its ambit all spares including the spares of motor vehicles and tractor agricultural tractors just because another category of importer is also allowed to import spare parts of motor vehicles and agricultural tractors, it cannot be contended that no other category of importers are permitted to import spare parts of motor vehicles and agricultural tractors. Entry 10(4) permits import of all spares other than those included in Appendix 3 where as entry 25 is restricted to spare parts of motor vehicles and agricultural tractors. From the entries in Appendix 10, it is clear that more than one categories of importers could import same items, spare parts of motor vehicles and agricultural tractors could be imported by Actual Users Industrial and Non-Industrial under item 10(4) and they could also be imported by person owning imported vehicles/agricultural tractors. In this connection, we may refer to item 10(1) and 10(5) of A.M. 1981. Under item 10(1) Actual Users Industrial are permitted to import raw-materials, components, consumables other than those included in the Appendices 3, 5, 8, 9 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an banned items), irrespective of the fact that whether they are spare parts of motor vehicles and agricultural tractors, the Export Houses are entitled to import those spares against their additional licence which has been endorsed as non-transferable as provided in paragraph 176(2). The earlier release of the spare parts of motor vehicles by the Department must have been based on the correct interpretation of the Policy regarding import of spares. 15. On careful consideration of all the aspects, we hold that the order of confiscation of the goods imported is erroneous in law and therefore we set aside the same and direct the appellants be granted consequential relief. 16. [Order per : K.S. Dilipsinhji, Member (T)]. - I have bestowed most careful consideration on Brother Hegde s proposed order but for the reasons which follow, I am unable to agree with his conclusions and hence this differing order. Brother Hegde has incorporated in his draft order the facts of the case and the submissions made by the appellants and the respondent. In the interest of brevity, it is therefore not necessary for me to repeat them hereunder : 17. The short question involved in this appeal is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes this entry at serial No. 25, on which reliance is placed by the appellants, the category of the eligible importer shown there against is not the Actual User but by persons owning imported vehicles. Therefore, in terms of para 176 of the Policy, the spare parts of motor vehicles are not permissible for import to an Actual User. In this interpretation, the import of the motor vehicle parts made under the licence is not covered thereunder and is clearly unauthorised. The Actual Users have been listed against only certain serial numbers in the O.G.L. Similarly, the raw materials, components and spares have also been listed against only certain serial numbers, like, 1, 4, 5 etc. The provisions of para 176 would have to be interpreted to mean that only those raw materials, components and spares can be permitted which are allowed to be imported to Actual Users. In view of the interpretation of the import policy, serial number 25 of Appendix 10 cannot be interpreted to permit import of any spare parts irrespective of the category of the eligible importers. From this point of view, I find that there is a considerable force in the learned S.D.R. s contention that Chapter 9 of the Policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leather trade under specific licences. Hence even this argument of the learned advocate is not tenable. 210. In view of these circumstances, I find that the orders of the Deputy Collector of Customs and the Appellate Collector of Customs are correct in law and in fact. Accordingly, I confirm the same and reject the appeal. 20A. As there is difference of opinion between two Members, the appeal records are submitted to the President in terms of Section 129-C of the Customs Act for referring the following point of difference to one or more other Members of the Tribunal : Whether on the facts and in the circumstances of the case, the order of confiscation of the goods is erroneous in law and, therefore, requires to be set aside as held by Member (Judicial) or whether the orders passed by the Deputy Collector of Customs and the Appellate Collector of Customs are correct in law and are required to be confirmed as held by Member (Technical). 21. [Order per : P.C. Jain]. - Heard the learned Counsel Shri V.S. Nankani for the appellant and learned SDR Shri G.D. Pal for the respondent and I have also gone through the orders passed by two learned brothers Shri K.S. Dilipsinhji and Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endix 10 actual users, where industrial or non-industrial, or actual user simplicitor, i.e. without any qualification of industrial or non-industrial are spelt out, against several of the items. There was nothing to prevent the Policy makers to mention actual users either qualified by the terms non-industrial or actual users simplicitor against Serial No. 25 if theirs intention was to allow this item to be imported by the actual users. According to the scheme of para 176(1)(b) as stated above and that of Appendix 10, only those of the items can be imported by the Export Houses which are covered by the term actual users simplicitor or whether qualified by the term industrial or non-industrial. Therefore claim of the appellant under Serial No. 25 of Appendix 10 read with the REP licences issued to the registered Export Houses is not valid. 25. Next contention of the learned advocate is that Serial No. 4 of Appendix 10 allows actual users (Industrial or Non-Industrial) to import permissible spares, i.e items other than those included in Appendix 3. It is admitted by both the parties that the goods under consideration are not included in Appendix 3. Accordingly, the learned advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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