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TMI Blog1994 (2) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Authority nd dt. of order Redemption fine Penalty M/s. Agro Impex /264/91 C/41 to 43/94 Collector of Customs, Madras Order dt. 8-1-1991 25,00,000 12,00,000 M/s. M.B. Impex C/345/90 Addl. Collector of Customs, Madras Order dt. 11-5-1991 3,84,368 75,000 After having heard the learned Counsel in extenso and the learned SDR for the Department and after going through the entire records and perusal of the relevant policy and the licences etc., since we feel that the appeals of these two appellants will have to be dealt with separately by reason of the specific endorsement in the licences deleting clause numbers (i) to (iii) endorsed on the back of the licences which exclusionary clauses would render the other conditions inapplicable in terms of para 215 of the relevant policy 1988-91 and 1990-93 we record a separate order in respect of these two appellants are concerned. In respect of the other four appeals i.e. C/434/90, C/38 to C/40/94 [Sanwah Micro Systems (P) Ltd.] and C/602/90 (Sevak Ayat Niryat Co. Ltd.) since the licences issued to these appellants do not carry the exclusion clause as in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (3) of the Import (Control) Order, 1955 dated 7th December, 1955 as amended upto and including the date of issue of licence, unless otherwise specified. In the case of the other importers this endorsement regarding deletion of the conditions as above was not there and it was felt that this may have an important bearing on the question of validity of the licences for import of the Fax machines. Arguments in respect of these cases were heard first and the learned Counsel Shri Kasturi Rangan argued the matter on behalf of these two appellants. Common arguments were however made on behalf of other appellants by M/s. Thiagarajan and JC Patel, Advocates along with Shri K.C. Mankani, Advocate. We, therefore, propose to take up the case of appellants M/s. MB Impex and M/s. Agro Impex in Appeal Nos. C/345/90/MAS and C/264/91 for decision separately. 4. The learned Counsel for the appellants pleaded that Fax machines had been imported by these two importers against additional licences which were covered by policy for the year 1988-91 and 1990-93. The import against the additional licences, he pleaded, was governed by para 215 of the Import Policy and the said para for purpose of con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowhere stated that these are not capital goods and non-OGL variety. He pleaded that the Collector has merely gone on to hold against the appellants importation based on his reading of the policy and he has sought to read the provisions of para 118 in para 215(4)(iii). He pleaded that no doubt, in para 118, the policy in regard to Fax machines has been set out but this policy is only with reference to importation of goods by REP licence holders and cannot be made applicable to the case of additional licence holders. He pleaded that REP licence and additional licence granted to the Export House belong to two separate categories and the policy in respect of each is separately laid down in the import and export policy. He pleaded that the conditions applicable to each category of licence should be interpreted in the context of the conditions set out in the paras dealing with that category of licence and there is no scope for reading para 118 in para 215(4)(iii). He pleaded that para 215(4)(iii) of the import policy clearly sets out that importation of the non-OGL capital goods is permissible. He pleaded that as it is, in the order-in-original impugned in Appeal No. C/264/90 by Agro I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from contemporary authority. Further, the provisions under sub-para 220(3)(iii) also makes clear that the office machines cannot be allowed against the Non-OGL capital goods category. Thus, the Fax machine is also a capital goods falling under the sub-category of capital goods for office use and hence cannot be allowed under the category of Non-OGL capital goods against flexibility provisions of Additional licences in view of the specific provisions, under sub-para 118(7) of ITC AM 1988-91 and sub-para 124(7) of ITC AM 1990-93. Such non-permissibility was also confirmed by the CCI E in his letter cited (supra). Thus, the Fax machine is a capital goods for rendering service and cannot be allowed against the category of non-OGL capital goods in view of the specific provisions of the ITC Policy." He pleaded that the Collector in his order impugned in Appeal No. C/264/91 has dealt with extensively on various aspects of the case involved and apart from his findings as above, he has also referred to the relevant import policy applicable and has held that in both 1988-91 and 1990-93 policies in regard to office machines have been set out. He pleaded that the thrust of the Collector s ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e importation will have to be examined only with reference to para 215 of the policy as endorsed on the licence for the reason that the goods imported are non-OGL capital goods. He, therefore, pleaded that confiscation of the goods in the case of the appellants was not maintainable in law. He further referred to para 224(1) of the 1990-93 policy in regard to applicability of any ban in regard to import of office machines will not invalidate the endorsement in regard to deletion of the conditions (i) to (iii) above. He pleaded that this deletion of the conditions has to be given a meaning and the Customs Authorities cannot introduce any conditions when the same have been rendered inapplicable. 5. Shri J.P. Gregory, the learned SDR for the Department pleaded that the Import and Export Policy sets out various restrictions and relaxations in it and all paras have to be read harmoniously so as to carry forward the purpose of the framers of the policy. Any relaxation has to be read in the context of any specific ban which may be there in respect of any specified items or group of items and the eligibility to import certain items will have to be decided after reading various paras of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of office machines and also what would be the implication of the deletion of certain conditions viz. conditions (i) to (iii) on the reverse of the licences as mentioned above, with reference to para 215 of the import policy. We observe that the appellants are holders of additional licence and they are permitted to import non-OGL capital goods in terms of para 215(4)(iii). The plea of the appellants is that import of non-OGL capital goods other than those covered under Appendix 1 Part A B is permissible without any indigenous clearance and since there is no dispute that office machines do not figure under Appendix I Part A B these machines being in the nature of capital goods though useful in the office is covered by the licences produced. We observe that various facilities which are made available to Export and Trading Houses are set out under para 214 of the Policy and under para 215 of the Policy under heading `Additional Licences the policy for the same has been set out and the relevant para is 215(4)(iii) reproduced above. In this context it would be relevant to go into para 215(5) which is reproduced below for convenience of reference : The Export/Trading House ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohibition applicable to all cases where flexibility provisions are there for import against licences. It is seen that against Sl. No. 215(4) the facilities given have been termed as flexibility provisions. Under para 215(5) we see no reason as to why bar set out in para 118(7) of the policy cannot be read into the facility under para 215(4)(iii) reproduced above. The only contingency under which this condition will not apply would be when there is specific mention that the other conditions in the import policy will not apply to the licences in question. In the cases before us we find that the licences carried an endorsement deleting conditions (i) to (iii) endorsed on the back of the licences. By these conditions the licence is subject to conditions relating to the licence as prescribed under the relevant ITC policy. If these conditions had not been deleted what has to be read is that in respect of the goods which are covered by description at Sl. (i) to (iii) of the licence, the relevant provisions given in the policy in respect of office machines would apply amongst other conditions applicable in terms of para 215 of the policy. By the deletion of these conditions, what remains i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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