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TMI Blog1989 (8) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Division Bench, dismissed the appeal observing that the petitioner would be at liberty to file a departmental appeal and the appeal may be disposed of not later than six weeks from the date of its presentation and in modification of the direction of the learned Single Judge, the Bench directed that the petitioner would be permitted to clear the goods on payment of redemption fine and furnishing bank guarantee for half of the penalty amount subject to further orders by the appellate Authority after disposal of the appeal. In pursuance of this order, the appellant herein presented an appeal with the stay petition, which was received by the registry of this Bench of the Tribunal 28-6-1989. The stay petition and the appeal were fixed for hearing on 10-7-89. On the stay petition of the appellant, this Bench observed that the High Court have already directed the appellant to furnish Bank Guarantee for 50% of the penalty amount, which has not been complied with. This Bench also did not accept the contention of the appellant that since the goods were not cleared they are not required to comply with the direction of the Hon ble High Court for furnishing the Bank Guarantee towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector held that the import is unauthorised, since the goods imported are marble, whose import requires a specific licence. The Collector ordered enforcement of the bond to the extent of Rs. 4,93,199 in respect of the goods already taken delivery during the pendency of adjudication on a bond executed by them. As regards the goods valued at Rs. 2,44,763.50, which were still with the Customs department, the Collector ordered confiscation but allowed redemption on payment of fine ofRs. 5,00,000/-. The Collector also held that marble is a luxury item and used by persons in higher strata of society and since the import is in violation of the Import Control Policy, the appellant deserves to be penalised and accordingly imposed a penalty of Rs. 10,00,000/-. The present appeal is against the aforesaid order of the Collector of Customs. 4. Shri M.H. Merchant, the learned authorised representative on behalf of the appellant, after narrating the facts of the case, put forth his arguments on the basis of five propositions set out below: l (i) Expression Marble in Customs Tariff Act Entry No. 25.15 is manifestly appearing in Technical nomenclature and hence only technical meaning i.e. geol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in the Tariff heading is to be technically understood and applied. He also contended that other calcareous monumental and building stones referred to in the aforesaid Tariff heading is statutorily comprehending within its scope only those limestones which are similar to marble, travertine, ecaussine but not those stones which are technically neither marble, nor travertine nor ecaussine. According to Shri Merchant, while the entry is comprehending marbles or limestones, the term other than calcareous stone can only be construed to cover such stones other than marble technically known as such. For construing the imported item as marble, only if polishable limestones satisfy the technical definition of marble, it can be said to be construed as marble. It is also urged that sedimentary limestones which are not technically marble, have been statutorily segregated and separated from the expression marble viz. Travertine , Ecaussine Other calcareous monumental and building stones . According to the technical definition, only recrystallised limestones can be technically called marble. Geological meaning of marble refers to metamorphic carbonate rocks and could cover only recrystall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogy Department, Udaipur (Rajasthan) to point out that in the sample forwarded by the department recrystallisation has not taken place and the sample has been identified as fine grained cherty limestone. On the opinion given by the Regional Petrological Laboratory Nagpur, he contended that it is only based on visual observation and his conclusion that it is marble, as per the commercial definition, cannot be accepted. He also pointed out that the author of the report in this case has stated that if opinion is to be obtained regarding technical and scientific basis the department should approach the Director,0re Dressing Laboratory, Indian Bureau of Mines, Civil Lines, Nagpur. This direction has been complied with. 7. As per proposition No. (ii) the learned representative Shri Merchant stated that HSN definition of marble is appearing only in the Explanatory Notes and no such definition is appearing either in the Act or Customs Tariff. Hence the definition given in the Explanatory Notes has no statutory force. Only the technical definition of marble which gives petrological and geological meaning of marble should be adopted. Even assuming that it is lawful to place reliance on HSN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature and non-flaggy stratification. In this context, he referred to the judgment of the Supreme Court reported in 1977 (1) E.L.T. at page J 199, wherein the Supreme Court have held that the views of the Indian Standard Institute with regard to how a particular product is known to Indian trade should be preferred to views of foreign authors and experts. This ratio of the Supreme Court judgment has been followed by the Delhi High Court in judgment reported in 1980 Vol. 6 E.L.T. page 679. The Tribunal have also adopted the ratio of the Supreme Court judgment in the judgment reported in 1987 (29) E.L.T. page 627. If there is no definition given in the Act or in the Tariff or in the Notification itself, definitions and specifications as laid down by the ISI are to be relied upon as representing the general understanding of the trade and industry. In this context, he cited the judgment reported in E.L.T. 1987 (30) page 942. Hence, adopting definition given in the ISI specification to the imported goods even commercially, they cannot be called as marble because it is not a crystalline product. 9. On the proposition No. (iv) above, Shri Merchant contended that the Collector s finding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce without any fine and penalty. 12. Shri Sethna, the learned Sr. Counsel, on behalf of the department contended as below: The question involved in the appeal is one relating to interpretation of the term Marble figuring against Sr.No. 62 of Appx. 2 Part-B of AM 1988-91. Items listed in Appx. 2 are restricted items, which cannot be imported without a valid licence, particularly marble is an item of luxury consumption used by the affluent people and hence in that context any interpretation of the term marble figuring in the aforesaid appendix should be construed. He urged that the interpretation of the term figuring in the restricted and banned list is to be made in the context of the Policy background viz. utilisation of foreign exchange for the essential purpose. In this context, he also referred to Maxwell on Interpretation of Statutes and contended that it has been clearly stated that any interpretation that aids to carrying out the objective of the legislature rather than the one which may result in enabling evasion of the law should be preferred. It was his submission that the objective of the legislature in including marble under restricted list is to discourage impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there is no justification to suggest that Marble in technical sense goes out of the family of calcareous stones of specific gravity of 2.5 or above. He, therefore, contended that the Tariff Entry does not warrant an interpretation as made out by the learned representative from the other side. Thereafter, Shri Sethna took us through the publication Marmi Italia NI to point out that in narrow sense petrographers and geologists defined the marble as true marbles or pure marbles as a metamorphic, recrystallized calcareous rock. However, commercial definition of marble is wider and has become a part of common usage. He also pointed out that this publication also recognises that the marble is a term with many meanings. Commercial definition of marble as given in the publication covers polishable, decorative rocks, a category which largely comprises those minerals with a hardness. Apart from the true marble, there are numerous other rock types, the calcareous rocks, the dolomites, the polishable, calcareous breccias and the calcareous alabasters, the serpentines and ophicalcites. The Tariff Entry however, only seeks to cover calcareous stones of a specific gravity of 2.5 and above and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pronouncements to support his plea that the entries in the absence of any specific definition are to be understood as they are known in the Trade or Commercial Parlance. He also referred to the decision of the Supreme Court reported in AIR 1967 (SC) page 1454 (Commissioner of Sales Tax v. Shaswanth Singh). He pointed out that the Supreme Court in this case have specifically laid down the criteria for applying the trade parlance. In this case, the question involved is whether coal or charcoal is one and the same. Though coal is technically understood as a mineral product, while charcoal is manufactured by human agency from products like wood and other things, the Supreme Court adopted the popular meaning and held that coal would be covered by the term coal. The conclusion reached by the Supreme Court is that if a statute contains language which is capable of being construed in a popular sense, such statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense i.e. in the sense in which people conversant with the subject matter understand it. He also sought to rely on the judgment reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending precious foreign exchange. The licences issued for the import of such items carry the premium of 200% and the margin of profit is about 300%. Viewed in this context, the quantum of fines and penalty imposed are not excessive and does not call for any interference. He also cited the decision of the Delhi High Court reported in 1987 (29) E.L.T. 753 (Del.) in the case of Jain Exports Pvt. Ltd. to point out that when there is an illegal transaction of import, the fine in lieu of confiscation cannot be so exercised as to give a bonanza of profit. 14. In reply, Shri Merchant referred to the decision of the Tribunal reported in 1987 (29) E.L.T. page 975. He contended that if the expression Marble is construed in the way the other side seeks to envisage then all other expressions viz. travertine, ecaussine, alabaster and all other calcareous stones become nugatory... All the expressions have been spelt out clearly in the explanatory notes giving separate meaning to each of them. If the Heading 25.15 is to be read as a whole, then it would be evident that marble is distinguishable from other calcareous stones inasmuch as all sedimentary limestones and rock are segregated and sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the invoice, it is mentioned that merchandise is of Italian origin, and contents are true and authentic. When questioned by this Bench, with regard to the proforma invoice and the L/C, referred to in the final invoice, the appellants, during the hearing produced the copies of the same. On going through the proforma invoice, the description given therein is found to be slabs of calcareous stone of 2 CMS Thick. On going through the L/C opened through the Union Bank of India for this consignment, it is observed that the same has been opened for the import of slabs of calcareous stone as per the proforma invoice. Thus from the aforesaid documents, goods sought to be imported are found to be of general description of calcareous stone of 2 CMS thick. The goods under import are found to be having the specific gravity of 2.71 as per the chemical examiner s report, which is not disputed. They also agree that the goods are covered by Customs Tariff Entry 25.15 being calcareous stones of specific gravity of 2.5 and above. It is reported that the appellant s firm is a small scale industry engaged in the processing of stone slabs and the stones imported are for manufacture of tiles which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he context of the aforesaid clear factual position, the issues are now required to be considered in greater detail. (i) Whether geological and petrological definition only should be adopted: As seen from the entry in ITC Policy Sr.No. 62 Appx. 2 Part-B reads as below: Marble/granite/onyx. It is observed that onyx is also a variety of marble as seen from the Explanatory Notes given against Heading 25.15, whereas granite and other monumental or building stone is covered by T.I; 25.16 of CTA. It is also observed that the entry in the ITC Policy covers the products occurring in T.I. viz. 25.15,25.16. 19. It is not disputed that marble is a hard clacareous stone of a specific gravity of 2.5 or above. The point of dispute is that Tariff Entry 25.15 specifies marble, travertine, ecaussine and other calcareous monumental or building stone and alabaster, whereas the ITC individually specifies only marble. Hence, what is technically known as marble is geologically and petrologically sought to be restricted. In other words, for interpretting the term marble it is urged that only the technical definition of marble is required to be adopted. According to the technical definition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently crystalline and hence any stone which is not crystalline cannot be called as marble even as per the Explanatory Notes to the Tariff Entry. We have carefully considered this argument which boils down to the interpretation of the words often crystalline . The department have held that the words often crystalline means may or may not or need not always be . The appellants, however, contended that it is reflecting the character of the stone and has to be necessarily crystalline. We observe that the words often crystalline refer to the normal feature of the stone. However, there could be calcareous stones other than crystalline for being termed as marble. If we are to accept the argument of Shri Merchant that it should always crystalline then there is no need for using the word often in the Explanatory Notes before the word crystalline . Hence, we are unable to pursuade ourselves to the argument of Shri Merchant that often crystalline should be construed as always crystalline or repeatedly crystalline . If we go by the Explanatory Notes, it is observed that any hard calcareous stone, homogenous and fine-grained either opaque or translucent can be construed as ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain characteristics, they cannot be construed as different from marble. It is well settled rule of interpretation that any interpretation sought to be made, which would defeat the purpose of the legislation, should be rejected. 22. In the adjudication proceedings, the Collector has taken into consideration the opinions given on the samples by the Indian Bureau of Mines, Udaipur, Geological Survey of India, Nagpur and Director, Mines and Geology Department, Government of Rajasthan, Udaipur. According to the appellants, the report from the Geological Survey of India, Nagpur categorically says that the sample cannot be termed as marble. It is observed from the discussion in the report that the analysis has been done only on the basis of scientific and petrological consideration. This is evident from the report, which reads as follows: The Section of the rock shows typically bimodal, particularate texture. The packing is mud supported. The allochem components include mainly polistal material and spares, well preserved shell (gastropod?), fragments, polletal matter shows elliptical to subsphercidal shapes and lack of internal organisation with submicroscopic calcitic (2) granules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the report by the Director, Mines Geology Department, the appellants contended that recrystallisation has not taken place and the opinion given by the aforesaid authority is that the rock sample has been identified as fine grained cherty limestone . On going through the report, it is also observed that it takes good polish and can be used as marble. He also states that technically marble is a product of thermal metamorphism of limestone in which recrystallisation takes place and silicate minerals are also produced. He also gives the petrological definition of marble as given in IBM publication Marble in India 1983. He, however, contends that in commercial parlance the term marble has a wider application. Commercial marble is any crystalline rock composed predominantly of calcite. He also refers to ISI-1130-1969. 25. From this report, we observe that the author is positive that in the sample recrystallisation has not taken place. All the same he observes that it takes good polish and can be used as marble. He also observes that commercially the term marble has been applied to any stone, other than those known in trade as granite, that has a pleasing appearance and will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lection in the procurement of marble. The object of the ISI is also laid down in para 0.5 as below: This standard has, therefore, been formulated to provide guidance with respect to quality and dimensions of marble (slabs,blocks and tiles) (Emphasis supplied) From the aforesaid object of ISI, it is evident that the definition formulated is with regard to the quality marble where the marble can be marketed as a product conforming to the ISI specification. In this view of the matter, we are of the view that merely going by the definition given in the ISI specification would not lead to correct commercial understanding of the term marble , especially when Experts in their view have identified this product commercially known as marble. Normally, we would have gone by the definition given by the ISI, but for the fact that a note under this definition has been given to the effect that serpentine are also polished and used in trade as marble and also the standard is formulated with respect to quality marble. In this context, we seek to rely on the decision of the Tribunal reported in 1985 (21) E.L.T. p. 532 (Tri), wherein it has been held that even if the product is not manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready indicated, is the commercial parlance. In the absence of specific definition given in the Customs Tariff or in the ITC Policy, if we go by the commercial parlance, as expressed by the Experts, the item passes the test of marble as per the commercial parlance. We are also unable to appreciate how the goods can be imported with a generic description of calcareous rocks. The specific variety of rock normally would also have been mentioned. The appellants claim is that Botticino variety of sedimentary rock is imported. But this is not supported by the import documents, as we have already observed earlier. The burden is on the appellants to establish that the Botticino variety is imported and it is not commercially known as marble. This burden has not been discharged. Moreover, no literature or documentary evidences giving the detailed specification of Botticino variety have been produced by the appellants. In the circumstances, we have no other alternative but to conclude that the goods imported have been given general description of calcareous stones slabs, which are marble known in the commercial parlance. In this case admittedly, the calcareous nature of stones are used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial parlance as marble, that finding cannot be construed as perverse or malafide calling for interference by us, so long as we are clear about the object and purport of the Import Policy in specifying the item marble in the restricted list. 30. In this view of the matter, we reject the contention of the appellants that the impugned item could be imported under OGL and could be allowed clearance. 31. Now coming to the question of the quantum of redemption fine and the penalty imposed, it was argued by Shri Merchant that the appellants have taken reasonable precautions to ensure that the imported item is permissible under OGL and is not figuring in the restricted list. We have carefully considered this argument. It is observed that when the appellants have chosen to get the sample tested beforehand by Dr. Sethna and also claimed to have taken precautions to get the confirmation and certificate from the foreign supplier that the item imported is not marble they have not chosen to go to the Chief Controller of Imports Exports, New Delhi for obtaining the authentic clarification, which even as per the provisions of the Import Policy, is binding on the departmental authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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