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TMI Blog1992 (2) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... icence under Appendix - 6 of the Import Policy 1985-1988 (hereinafter referred to as the said Import Policy). Under Item No. I of Appendix 6 of the said Import Policy, it is permissible for the actual users (Industrial) to import raw materials, components and consumables (non-iron and steel items) other than those included in Appendices 2,3 Part-A, 5 8 of the said Import Policy. The appellants stated that ABS sheet extrusion granules are not included in any of the aforesaid appendices. The appellants are the actual users (Industrial) of the said ABS sheet extrusion granules and the same were required for use as raw materials for manufacture of the said co-extruded plastic sheets at its factory. In the circumstances, it was stated by the appellants that it was permissible for them to import the said materials under Open General Licence. 3. The Customs Authorities took samples from the said consignment for the purpose of chemical test and the alleged result of the said purported test was as under :- the sample is in the form of cream coloured small cylindrical pigmented granules. It has the characteristics of ABS type of moulding granules. 4. After the said test report the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 111(d) of the Customs Act, 1962 read with Section 3 of the Imports Exports (Control) Act, 1947. By the said order the Collector confiscated the said goods under Section 111(d) of the Customs Act, 1962 (hereinafter referred to as the Customs Act). The Collector, however, gave an option to the appellants to redeem the said goods on payment of a fine of Rs. 2,50,000.00. The Collector also imposed a penalty of Rs. 50,000.00 upon the appellants under Section 112 of the Customs Act. 7. The instant appeal was filed by the appellants against the said order dated November 8,1985 passed by the Collector of Customs, Calcutta. 8. The learned Advocate, Shri S.K. Bagaria appearing for the appellants contended that the Collector failed to appreciate that under Appendix-6, Item No. I of the said Import Policy it is permissible for actual users (Industrial) to import raw materials, components and consumables (non-iron and steel items) other than those included in Appendices 2, 3 Part-A, 5 8. The appellants are actual users (Industrial) of the said ABS sheet extrusion granules imported by them and the same are used as raw materials at their factory for manufacture of co-extruded pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the aforesaid and various other authoritative books, documents and literature on the subject which were duly produced before him by the appellants. 12. He also submitted that the Public Notice No. 113/ITC/P.N./85-88 dated 1st September, 1986 published in the Gazette of India, Extraordinary Part-1, Section-1, amending Appendix-2, Part-B, Entry No. (1) as (I) A.B.S. Resin/Granules/Moulding Powder (all grades) , is only prospective in operation and the subject goods imported before that amendment is not hit by the same. In support of his contention Shri Bagaria relied on the following decisions : (i) AIR 1971 S.C. 704 in the case of M/s. Bharat Barrel and Drum Mfg. Co. (P) Ltd. v. Collector of Customs, Bombay; (ii) AIR 1990 S.C. 2190 in the case of Union of India and Others v. Kanunga Industries; (iii) 1990 1 Supreme Court Cases 411 in the case of P. Mahendran and Others v. State of Karnataka and Others; (iv) AIR 1956 S.C. 614 in the case of Sree Ram Narain v. The Simla Banking Industrial Co. Ltd.; (v) 1991 (51) E.L.T. 185 in the case of Priyanka Overseas Pvt. Ltd. v. Union of India. 13. It was also contended that the construction of a Statute which make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erature property retention and Styrene provides gloss, rigidity and processing. It was, therefore, contended that varying the proportion of these three materials, different grades are obtained with different physical properties. But it was his contention that, that does not mean that a particular grade is different from the other grade as basically they all belong to the same class of A.B.S. Polymer. He also relied on the letters relied on by the Adjudicating Authority in substantiating his contention. Those are the letters of Lucky Goldstar International Corporation and Indian Institute of Technology, Delhi. He, therefore, stated that even though ABS Powder and Extrusion Granules are of different grade, they are basically of ABS Polymer and are used in the process of extrusion and injection. It was also his contention that in Market Parlance both ABS Powder and ABS Extrusion Granules are considered as the same. In this connection, he placed reliance on the opinions furnished by M/s. Polychem Ltd., Calcutta, Indian Plastic Federation and A.B.S. Plastics Limited. He, thus, justified the impugned order and took us through the relevant discussions made in the Adjudication Order in det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch arises for our consideration is whether A.B.S. Moulding Powder and A.B.S. Extrusion Granules are one and the same or different goods for the purposes of import for the relevant policy period -1985-88. 21. The appellants claimed clearance of ABS Moulding Granules under Open General Licence under Appendix-6 of Import Policy, 1985-88. Under Item No. I of the said Import Policy, it is permissible for actual users (Industrial) to import raw materials, components, consumables (non-iron and steel items) other than those included in Appendices-2, 3 Part-A, 5 and 8 of the said Import Policy. In Appendix-2, ABS Moulding Powder was included. The contention of the Department is that A.B.S. Extrusion Granules and A.B.S. Moulding Powder are the same and since ABS Moulding Powder is included in Appendix-2, Part-B, Serial No. 1, the former is not covered under O.G.L. (Appendix-6) and hence the import is unauthorised. 22. It was contended by Shri S.K. Bagaria, the learned Advocate, that ABS Moulding Powder and ABS Sheet Extrusion Granules are two different items and hence the import is covered by OGL. In this connection, it is necessary to Find out the composition of the two materials in q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same as moulding granule. They have merely said that a variety which is more suitable for extrusion is different from ABS Moulding Powder which is a general variety. In concluding this part of the argument, I may now say that from the point of view of use, we have proved above that both granules and powders are used in both the processes of extrusion and injection although there may be different grades suitable for different processes. But for that matter it cannot be said that only granules are used for extrusion and only powders are used for injection." 23. This, in our view, is not a correct approach. The appellants had produced before the Adjudicating Authority the opinion produced by M/s. Lucky Goldstar International Corporation of Korea dated 10-10-1985, wherein they stated that ABS Extrusion Granules are different from ABS Moulding Powder. In Para-4 it was stated as follows : ABS Moulding Powder and Extrusion Granules are two different commodities required for different end-uses and are known as such commonly in the international market. So also, another foreign suppliers, M/s. Mitsubishi Corporation incorporated in Japan, in their letter to the appellants dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given to the assessee. So also, in the decision reported in 1986 (159) ITR 85 in the case of Commissioner of In come Tax, U.P. v. J.K. Housing Factory, the Supreme Court held as follows : In any event, as has been mentioned, in case of doubt, the assessee is entitled to an interpretation which is favourable to him, though we are of the opinion that in the instant case there is no scope for any doubt. 26. Thus, even if there is any doubt the appellants are entitled for the benefit of doubt and the appeal is to be allowed on that ground. 27. However, on the facts and circumstances of this case, we feel that there is no such doubt also in this case as we are of the opinion that ABS Moulding Powder cannot be the same as ABS extrusion granules for the purposes of import under the relevant policy period of 1985-88. At the relevant time of import at Serial No. 1 of Appendix-2, Part-B it was only mentioned as A.B.S. Moulding Powder . If it was the intention of the Policy-makers to include ABS extrusion granules, it could very well have mentioned therein as ABS of all grades. This becomes very clear in view of the subsequent Public Notice No. 113-I.T.C. (PN)/85-88 dated 1st Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of this case for the purpose of understanding the meaning of the original entry in the relevant policy i.e. ABS Moulding Powder, the amended entry, A.B.S./Resin/Granules/Moulding Powder (all grades) can be looked into. If that is so looked into, it becomes clear that after amendment the legislature included ABS Powder, Granules of all grades as banned which was not the case before the amendment/correction. 29. This view of ours is further supported by the decision of the Supreme Court reported in AIR-1990-SC-2190 in the case of Union of India and Others v. Kanunga Industries. In that case, the respondent firm was nominated by the exporter pursuant to which they obtained import licence for export of raw materials. In accordance with the provisions of paragraph-85 of the Import Trade (Control) Handbook, 1969, which was effective from April, 1969, the respondents imported stainless steel strips which landed at Madras on September 12,1969. A penalty was imposed on them by the Central Board of Excise and Customs under Section 112(a) of the Customs Act, 1962 on the ground that the import of stainless steel strips was unauthorised. A revision preferred against that order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic forms enumerated therein were alone banned. It may also mean that the conjunctive and after the words stainless steel had crept in the entry inadvertently. Such a reading of the entry would be legitimate taking into account its history referred to earlier. We have pointed out that in 1967 the relevant entry was stainless steel of any specifications whereas in 1968 it was stainless steel sheets/plates/strips/circles of any specifications . The erratum only brought the situation to the 1968 position. It is also for this reason that we cannot accept the contention that the erratum only made clear or explicit what was implicit in the entry earlier. This is apart from the settled legal position that taxation statutes have to be construed strictly, and the benefit of doubt, if any has to be given to the assessee." Applying the above principles to the facts of this case it is seen that originally the item included in Appendix-2, Part-B at Serial No. 1 was ABS Moulding Powder . Later, in terms of ITC Public Notice dated 1st September, 1986 the erratum was issued substituting the same as - ABS Resin/Granules/Moulding Powder (all grades) . This shows that originally ABS Resin an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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