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TMI Blog1992 (6) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... pproached the Honourable High Court and the Division Bench of the Hon ble High Court vide Matter No. 434 of 1992 dated 15-4-1992, directed that the appeal be heard without any pre-deposit and the same should be expeditiously disposed of and that preferably within two months. Accordingly, the learned Advocate, Shri G.L. Rawal for the appellants submitted an application for the hearing of the appeal without pre-deposit and that application in M.A. No. 156/92 is allowed. The appeal is accordingly heard without the pre-deposit of the penalty as per the directions of the Hon ble High Court of Calcutta. 3. The brief facts of the case are that the appellants through their Custom House Clearing Agents, M/s. Universal Agency filed a Bill of Entry for clearance of 16 pcs. of Fax Machines imported from Singapore. Along with the Bill of Entry, they submitted the invoice, packing list and the import licences. During the course of examination of the Bill of Entry it was found that the appellants had sought to clear the goods imported against Exim Scrip. The Department, prima facie, felt that the goods would not be covered under the subject Exim Scrips and a query slip dated 22-1-1992 covering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proached the Hon ble High Court and the Hon ble High Court directed that a show cause notice be issued and the appellants filed a reply thereto and thereafter, granting a personal hearing an order be passed by 9-3-1992. In view of the above directions, the Department issued a show cause notice requiring the appellants to show cause as to why the 16 pcs. of Fax Machine imported by them, should not be confiscated and why a penal action should not be taken against them. The appellants filed a reply thereto. A personal hearing was granted to the appellants and thereafter, the impugned order was passed. 8. The learned Adjudicating Officer held that Fax Machines are not capital goods. He was of the view that these Fax Machines being office machines do not fall within the category of capital goods. He was also of the view that para-124 of the relevant policy is more specific than para-195A. He, therefore, came to the conclusion that the goods are not covered by the licence in question. But he held that the charge of misdeclaration is not established. The goods were thus confiscated under Section 111(d) of the Customs Act, 1962. 9. It was contended by the learned Counsel, Shri Rawal th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant policy. He also drew our attention to the statutory notification No. 264/87- CE dated 10-12-1987 as also notification No. 375/87-Cus., dtd. 10-12-1987 and contended that the definition of capital goods mentioned therein includes those goods which are used for rendering service. Therefore, the Fax Machines are capital goods. He also drew our attention to the clarification issued by the Commerce Ministry in this regard, which is found in the paper-book at page-56 which reads as follows : Clarification on electronic equipment import The Commerce Ministry today clarified that the recently amended provision for free import of electronic equipment against Exim Scrips will not be applicable to computer and computer-based systems for consumer electronic items like TV sets, VCRs and VCPs. In all these cases, imports will require a specific import licence as in the past...." It has also mentioned therein that the Government s permission for import against Exim Scrip was only in respect of non-restricted/non-OGL new capital goods, namely those not appearing in Appendix-I, Part-A and B. The public notice in this regard was issued by the Chief Controller of Imports and Exports on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice that in terms of para-7(13) of the present policy, the goods in question are used for rendering communication and therefore, they are capital goods in view of the para-195(A) of the relevant policy. Shri Rawal, therefore, contended that the important points in question to be determined in this appeal, are as follows: (i) whether the subject goods (Fax Machine) is non-OGL capital goods or not? (ii) whether the subject goods can be imported as against Exim Scrips in terms of para-195(A) of the Policy AM 1990-93? It was further contended before us that in any event, the appellants imported the goods in question, bonafide. He also contended that the Adjudicating Officer had brought the charges of misdeclaration against the appellants. The appellants imported the goods bonafide in view of the fact that the Customs Authorities themselves were treating the subject goods as capital goods during the policy period, 1985-88. When the imports are bonafide, the question of confiscation does not arise. He relied on the decision of the Supreme Court in the case of Akbar Baddruddin. In support of his contentions, he also relied on the following decisions :- (i) 1978 (2) E.L.T. (J 552) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be made under the flexibility provisions for registered exporters except to the extent provided for in para-227(3) of the policy. Hence he pointed out that it is clear that under the present policy, office machines are a separate category by itself. 12. Alternatively, it was contended that even if it is argued that all office machines are capital goods by virtue of the definition in para-7(ll) of the policy, their import will be governed by the provisions of paras 124,124A, 214 and 227 of the policy which are specific for office machines and not by the provisions of paras-156,195 and 195A which are generic in nature. Shri Sarkar, learned J.D.R., therefore, contended that a specific entry will prevail over the generic entry. 13. With respect to the arguments advanced by the learned Advocate, Shri G.L. Rawal that Fax Machines were cleared under REP Licences issued in terms of para- 51(iii) AM 1985-88, he pointed out that these goods are allowed clearance during the earlier policy period and against the specific licences, whereas the present goods have been imported against Exim Scrip Licences (valid for items as per current Import Export Policy for 1990-93). Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. 15. Shri Sarkar, learned J.D.R. also pointed out that no evidence was shown that Fax Machines are treated as capital goods in trade parlance. In that view of the matter, he contended that the goods are not covered by the licences in view of the fact that fax machine is not a capital goods and that they have been treated differently from capital goods in the present policy. He also contended that even if it is assumed that fax machines are capital goods , then also, office machine being more specific would prevail over the generic description - capital goods and accordingly, the present policy provisions relating to office machines will apply to the facts of this case. He, therefore, justified the confiscation of the goods. He also pointed out that the learned Adjudicating Authority had taken into consideration the report of the Department that Fax Machine has a fast selling market and therefore, the quantum of redemption fine of Rs. 5,25,000.00 (Rupees five lakh twenty-five thousand only) is justified on the facts available in the present case. He also justified the imposition of penalty on the appellants and prayed that the appeal may be dismissed. 16. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to different importers. That cannot be permitted by the Constitution which insists on the equality of law as one of its fundamental guarantees. I am therefore inclined to hold that the Customs are bound by their own precedents in administering taxing statutes involving the very basis of taxation in respect of a particular article and not leave it to them to modify their own previous decisions but to leave it to them to apply to Courts or Parliament or Legislatures as the case may be to put the law beyond doubt. In a recent Tariff Ruling of the Department C.B.R. No. 36(221)-Cus. III/55, dated 29-12-1955 T.R. 201/55 it has been said that Armo Nestable Steel Culverts are assessable under Item 63(28). These Rulings are in the nature of administrative directions or guides. This departmental Ruling, however, came after the assessment in this case had been made in July 1955 and cannot either bind or affect this assessment. These departmental instructions, guides or rulings can always be examined by Courts of law and if found wrong in law, can be overruled and set aside by the Courts. Law cannot be finally made by these departmental instruc- tions or what are called department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri B.B. Sarkar contended that the Department is relying on para-124 wherein it has suggested that Fax Machine has to be included in Office Machine and it is to be dealt with as office machine and not capital goods. 21. We have considered the submissions. It is now clear that these Fax machines were allowed clearance during the earlier policy period, 1985-88. The definition of capital goods for the period, 1985-88 and for the period, 1990-93 is the same. But the learned Adjudicating Authority had stated in his order that in the earlier cases there was no occasion to examine whether the Fax machines were capital goods or not since the licences were specific. On the other hand, he was of the opinion that since the import licence has a generic description, it was necessary to examine all the relevant provisions of the current policy and to decide whether the Fax machine could be treated as capital goods permissible against the said licence. The Adjudicating Authority stated that in the relevant policy of 1990-93 under para-124(1) Fax Machines have been specifically included whereas in the import policy, 1985-88 under the relevant para 145(1) regarding office machine, Fax Machine wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exposition to remove any possible ambiguity in the understanding of the language of the relevant statutory instrument : See Varghese v. I.T.O., 1982-1 S.C.R. 629, State of Tamil Nadu v. Mahi Traders - 1989 (40) E.L.T. 266 (S.C.) = 1989-1 S.C.R. 445, C.C.E. v. Andhra Sugar Ltd., 1988 (38) E.L.T. 564 (S.C.) = 1989 (Suppl.) 1 S.C.C. 144 and C.C.E. v. Parle Exports P. Ltd., 1988 (38) E.L.T. 741 (S.C.) = 1988-1 S.C.C. 345. Applying the principle of these decisions, that a contemporaneous exposition by the administrative authorities is a very useful and relevant guide to the interpretation of the expressions used in a statutory instrument, we think the assessee s contention that its products fall within the purview of Item 26AA should be upheld. It is thus seen that a contemporaneous exposition by the Customs Authorities treating the Fax Machines as capital goods and allowing clearance for the policy period 1985-88 is a very useful and relevant guide to the interpretation of the same expression for the period, 1990-93 in view of the fact that the definition of capital goods in both the policy periods is identical. Therefore, we think that the appellants contention that these Fax Mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Houses. But after amendment in terms of public notice dated 28-11-1991 para-220(3)(iii) reads as follows :- Within its overall value, the Additional Exim Scrips can also be utilised, without any upper value limit, for import of permissible Non-OGL capital goods including instruments and accessories thereof and balancing equipment, without the recommendation of the sponsoring authority, without indigenous clearance and without the advertisement procedure. This facility is available against own and/or acquired Additional EXIM Scrips. For this purpose, clubbing of Scrips is also permissible. The imports are not subject to Actual User condition. In this connection, the learned Advocate, Shri Rawal also relied on the clarification issued from Ministry of Commerce by means of a Public Notice dated 28-11-1991, wherein it was clarified that electronic non-OGL capital goods which do not appear in Appendix-1, Part-A and Part-B can be imported against Exim Scrips in terms of Public Notice No. 250/ITC, dated 28-11-1991. In order to appreciate the contention it is necessary for us to quote the above clarification which reads as follows : Clarification on electronic equipment import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice machines. In this connection, it will be relevant to mention that Fax Machine is one of the office machines in terms of para-124(1). 26. In terms of the amendment as was brought into, by means of public notice dated 28-11-1991, the bracketed marked portion as originally stood in para-220(3)(iii), (excluding office machine) was deleted meaning thereby that the restriction which was placed on the import of Fax Machines to its upper limit and restriction to the number of machines which can be imported, was eliminated. The purpose of deleting the abovesaid bracketed words was not appreciated by the Additional Collector. This particular amendment was required to be made as pari materia with para-195(A) which permitted the clearance of Fax Machines against Exim Scrips without any upper limit or to its number though initially para-220(3)(iii) was subjected to limitation and the same was deleted in view of the amendment dated 28-11-1991. That being the position, para-195A offers rights to the Exim Scrip holder to import any number of Fax Machines and that too, without actual user condition. 27. It is further relevant to mention that wherever such non-OGL capital goods/machines w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he policy which was brought into at a later point of time as that of 195A, shall prevail over the earlier part of the policy as contained in para-124. 29. It was contended by the learned Advocate, Shri Rawal that there was liberal thinking on the part of the Government for permitting the import of such like goods in modernised society and as such, the Public Notice dated 28-11-1991 was issued removing all doubts, specifically in view of the fact that the bracketted portion of para-220(3)(iii), i.e. (excluding office machines) , was deleted. In that view of the matter, we are of opinion that the import of the subject goods is in accordance with the para-195A of the Import Policy, 1990-93 and it cannot be said that there is any violation of Section 111(d) of the Customs Act, 1962. In that view of the matter, the confiscation of the goods in question and the order of redemption on payment of a Redemption Fine and the imposition of penalty, are not in accordance with law. Accordingly, we set aside the impugned order. Consequently, the confiscation of the goods in question and the imposition of penalty on the appellants are hereby set aside. The appeal is thus allowed with consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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